Financial Imperatives for Germany's Security and Defence Policy

By Dr Henrik Heidenkamp, Research Fellow for the Defence, Industries and Society Programme

Whatever course the Euro crisis is going to take over the coming months and years the pressure on politicians across Europe to reduce their budget deficits will increase significantly. In Germany, the defence budget will likely be at the centre of the political and public debate about federal spending reductions for two main reasons:

First, with a share of 10.4 per cent on the planned federal budget in 2012, the defence budget will still rank number three within the federal spending structure and therefore offers, at least in theory, a sizeable potential for quick spending reductions in absolute terms. As an illustration, a reduction of the defence budget's share on the federal budget by 1 per cent would equal savings of around €3 billion in 2012. Second, defence spending is in general a controversial topic in the German political and wider public debate, which saw the support for rising and even constant German defence expenditures sharply fading away since the first notion of the global economic and financial crisis. This trend is likely going to continue.

Accordingly, the financial imperatives - especially after the withdrawal of the German Armed Forces from Afghanistan - can be regarded as the dominating drivers of German security and defence policy. Of course, the changes in the strategic environment, the experiences from operations in Afghanistan and the developments within Germany's alliance framework will also significantly shape the German approach to security and defence. However, the lens through which the assessment of these aspects is conducted and political decisions are taken seems to be the lack of sufficient financial resources.

The implications of this highly complex and uncertain situation for Germany's security and defence policy - its purpose, ambition, capability to act as well as its structures and process - are far reaching and potentially fundamental in its nature. This is especially the case for the German Federal Armed Forces, which will undergo their most fundamental reform since their establishment in 1955. The cornerstones of this reform, which will be described briefly below, are on the one hand a necessary reaction to the changing security and defence context but on the other hand also a clear indicator of the pressure to rationalize and reduce the defence budget.

Implications for the Reform of the Federal Armed Forces

The Federal Armed Forces strength will be reduced from the current figure of over 222,000 troops to a maximum of 185,000 (comprising 170,000 regular soldiers and temporary-career volunteers, including reservists, and between 5,000 and 15,000 military service volunteers). For the five single services this means a reduction in the Army from 80,000 troops to around 61,320, in the Air Force from 38,000 troops to around 23,000, in the Navy from 17,000 troops to 13,850, in the Joint Support Service from 63,000 troops to 38,750 and in the Joint Medical Service from 21,990 troops to 15,120. The new force structure aims to make a pool of forces of at least 10,000 military personnel available for deployment on stabilisation operations. The number of people working in the German Ministry of Defence (BMVg) will be reduced from 3,500 to approximately 2,000. The civilian personnel will see cuts by 25,000 to 55,000.

The key challenge for the Federal Armed Forces and the BMVg will be to realise these reductions in a reasonable timeframe and as far as possible in collaboration with the military and civilian personnel. Both tasks are difficult to achieve, since on the one hand the natural reduction of personnel through the suspension of compulsory service and the regular retirement of personnel is likely not to do the job. On the other hand the incentives offered to redundant personnel to leave the Armed Forces and the BMVg, especially in times of high uncertainty on the job market, are not always convincing. Furthermore, generating effective and sustainable professional forces will require major initial investments that may significantly reduce savings through the suspension of compulsory service or result into even higher spending requirements.

The procurement of defence equipment will also see major changes, although the actual scope of reform in this area, which features long-standing contractual commitments, is critically dependent on a constructive agreement between the BMVg and the defence industry. The 'wish-list' of the Minister of Defence Dr Thomas de Maizière encompasses both a reduction of in-service equipment and equipment to be procured in the future. The major reductions are as follows:

In the Army the stock of the Leopard 2 main battle tank will be reduced from 350 to 225 and the numbers of the new Infantry Fighting Vehicle Puma will be reduced from 410 to 350. Further, the Air Force will only receive 80 NH90 Light Transport Helicopters (instead of 122 initially ordered), 40 Tiger Combat Support Helicopters (instead of 80 initially ordered), 140 Typhoon Multirole Combat Aircraft (instead of 177 initially ordered) and 40 A400M Transport Aircraft (instead of 60 initially ordered). The stock of the Tornado Multirole Combat Aircraft will be reduced from 185 to 85 and of the C-160 Transall Transport Aircraft from 80 to 60. In the Navy, the biggest reductions will be seen with the eight F122 frigates put out of service and only six instead of the initially planned eight Multirole Combat Ships 180 being procured. In addition, the number of Marine Helicopters will be reduced from 43 to 30.

Since the process of negotiations has just been initiated with the first meeting between the Minister of Defence and industry representatives on October 19, it is too early to make predictions on the potential outcome. For the industry it will be difficult to judge the sustainability of the Minister's promise to reinvest resources freed from old contracts instead of using them as savings.

Moreover, faced with potential further cuts in the defence budget, industry may consider the financial risks too high and revenues too low in order to sustain its current way to market. Many companies in the defence sector also have significant activities in the civilian sector, which they may choose to expand to compensate for reductions in the defence business. Obviously, such a development would have consequences for the overall defence industrial base and the availability of necessary defence equipment for the Armed Forces.

Of course, the political stakeholders are more or less aware of such a potential development and also perceive further cuts in the defence budget as an actual possibility. Against this background, senior policy makers, industrialists, military officers and commentators often promote a deepened European integration of German security and defence policy.

Multinational Integration of German Security and Defence Policy

The demands circle around issues like increased pooling and sharing efforts, the prioritising and specialisation of capabilities between allies, institutional reform and streamlining of command structures and processes as well as an improved co-ordination of national defence budgets.

However, multinational integration - independent of its concrete shape - is not an easy backup option for Germany's security and defence policy and presents it with a multitude of challenges, as could be seen during the Libya campaign. On the one hand German crews were withdrawn from NATO's Awacs-fleet - a decision that may likely affect the willingness of Germany's allies to further pool and share - and on the other hand German NATO staff officers played an important role in the planning of air assaults - a contribution that received broad recognition from the allies but also led to legal charges from the German opposition against the German government.

This example highlights that a true multinational integration of Germany's security and defence policy does not come free of charge. It requires, first and foremost, far-reaching changes to the way decision makers in the German government, parliament and Federal Armed Forces conceptualise, implement and communicate German security and defence policy. Such an ambitious change programme would include the following points:

First, a comprehensive assessment of the actual implications of the changing strategic environment, combined with an honest account of the multiple deficits within German security and defence policy and an unbiased identification of solutions that can actually and accountably be realised. Germany needs to define the purpose of its security and defence policy understanding that whereas there are no problems, which can only be solved by military force, there are indeed problems, which cannot be solved without the utilisation of military force.

Second, a reliable and applicable definition and communication of Germany's level of ambition. Based on a majority political consensus (but not neccesarily a full consensus), German security and defence policy has to transparently formulate where and how it is going to contribute in the field of security and defence. It has to clearly answer the questions, which type of operations it can and is willing to conduct and where the political, societal and military limits of its security and defence policy are. These fundamental cornerstones need to be communicated to the German public and to Germany's allies and partners.

Third, the long-overdue implementation of a cross-departmental approach that effectively integrates political, economic, development aid, humanitarian and military instruments. Hereto, fundamental institutional reforms within the German government and parliament system are required, which are capable of overcoming departmental barriers of co-operation, increasing the open flow of information between stakeholders and streamlining the political decision making process.

Fourth, a reform of the parliamentary control mechanism for the deployment of the Federal Armed Forces outside of Germany. The current form of the parliamentary control mechanism significantly limits Germany's capability to contribute to multinational operations and to shape multinational decision making processes. A revised form could tear down these barriers and at the same time safeguard the character of the German Armed Forces as a parliamentary controlled force.

Fifth, the creation of new formats and arenas for public debate on security and defence issues in Germany. In the past political actors from all parties have failed to initiate a necessary public debate on Germany's approach to security and defence. In combination with a stronger profile of security and defence policy within the German government, parliament and party system; new formats and arenas for debate could trigger a wider public debate on security and defence.

Sixth, a major investment into the qualification of human capital in the security and defence field. Compared to its key allies the USA, the UK and France, Germany has only very limited institutional capacities to educate and train civilians outside and inside the political system and the military on security and defence related topics. Accordingly, the capability of the German decision makers to think and make decisions strategically is significantly constrained. Therefore, new institutions to conduct evidence-based research and provide unbiased advice on security and defence policy, new university courses to offer basic and advanced academic training in security and defence studies and open post-graduate training formats within the political system to bridge the gap between governmental and civilian expertise need to be created.

Outlook for German Security and Defence Policy

The argument in this article shows that the economic and financial crisis affects all levels of German security and defence policy. The Federal Armed Forces have to implement a far reaching reform process that is inherently driven by the lack of financial resources.

However, even if the Federal Armed Forces under the Minister of Defence Dr Thomas de Maizière succeed in their endeavours to balance the available resources with the requirements of the strategic context, this may turn out to be insufficient in the end. In order to contribute to an advanced integration of European military capabilities as well as security and defence policy, Germany's military capabilities need to be embedded into a truly comprehensive, effective and sustainable German policy that clearly identifies its purpose, ambitions and limitations, provides its capacities accordingly in a reliable manner and in this way generates trust with its allies and partners.

Whereas the Federal Armed Forces appear to be on track - a success that should not be underestimated given the difficult circumstances, in which the reform process takes place - the reform of German security and defence policy still has a long way to go. It seems fair to raise significant doubts on the political stakeholder's capacity to initiate a change process as described above in the short-term and shape it into a mid- and long-term strategy. If one acknowledges the limited security and defence policy expertise in the German political system, the current focus of political attention on economic and fiscal issues and the low relevance of security and defence policy for German domestic politics. That said the task for policy makers is clear: they have to generate enough political will and societal support and translate it into sustainable commitment to the reform of Germany's security and defence policy.

The alternative of an even greater reduction in Germany's security and defence policy ambition would fundamentally contradict with its positioning in the international system and alliance framework. It would also contradict the challenges, risks and dangers faced by Germany in the strategic environment and the core function of the state in security and defence. Of course, experience in the past shows that political decision makers do not necessarily have to follow such an assessment and may come to their own conclusions.

The views expressed here are the author's own and do not necessarily reflect those of RUSI.