After decades of military downsizing, German military spending is woefully inadequate to meet the new strategic challenge posed by Russia—as both a new report by the Kiel Institute for the World Economy and the new Kiel Military Procurement Tracker show. In combination with a cumbersome national procurement system and depending on weapon systems it would take Germany as much as a century to bring its military inventory up to the level of 20 years ago. In contrast, Russia is radically increasing its capacity to produce armaments, including advanced systems, and is now in a position to produce as many weapons in six months as all of Germany’s armed forces currently field.
“Russia is becoming an ever greater security threat to NATO,” says Guntram Wolff, Fellow at the Kiel Institute and lead author of the report “Fit for war in decades: Europe's and Germany’s slow rearmament vis-à-vis Russia” (https://www.ifw-kiel.de/publications/fit-for-war-in-decades-europes-and-germanys...).
“At the same time, we in Germany are making slow progress in committing to rearmament needed for deterrence. What Europe needs now is a permanent, substantial, and immediate increase in Germany’s regular defense spending to at least 2 percent of GDP, in addition to the special fund. Let's be clear—any ‘business as usual’ approach would be negligent and irresponsible in the face of Russian aggression.”
The German government is currently barely managing to replace the weapons it is sending to Ukraine–the Bundeswehr's stockpile of air defense systems and howitzers has even plummeted. It was not until 2023, a good year after Russia attacked Ukraine, that Germany began to raise regular defense spending in any significant way, finally pushing annual spending above the NATO target of 2 percent of GDP. The coalition has since awarded military contracts worth some 90 billion euros (the Kiel Military Procurement Tracker/https://www.ifw-kiel.de/publications/kiel-military-procurement-tracker-33232/?AD... documents all German defense purchases announced since 2020).
But Wolff and his co-authors criticize the government’s military spending goals for not being ambitious enough. They estimate it would currently take Germany nearly a hundred years to restore the Bundeswehr's military capacity to 2004 levels—the result of drastic downsizing by successive preceding governments and overly slow and modest rearmament by the current administration.
At current rates of procurement, Germany would re-establish its 2004 capabilities in combat aircraft in about 15 years, in tanks in roughly 40 years—and in howitzers in only about one hundred years.
Russia's fighting power is increasing steadily
At the same time, the Kiel Institute report notes, Russia would be able to supply a similar volume of weapons in a much shorter time. The country's manufacturing capacity has grown to the point where it can produce the equivalent of the Bundeswehr's entire arsenal in just over half a year. Since the attack on Ukraine, Russia has significantly increased its capacity to produce key weapons systems—by a factor of two for long-range air defense systems, for example, and by a factor of three for tanks.
Thanks to support from North Korea, Russia can currently expend around 10,000 rounds of ammunition (shells and rockets) per day with no fear of depleting its stockpiles. At a similar rate of fire, Germany would use up a year’s worth of its entire ammunition production within 70 days.
The authors also note that Russia has made great strides in modern combat systems. Its capacity to produce unmanned drones has increased more than sixfold, and its expertise in and arsenal of supersonic and hypersonic missiles—highly destructive and hard to intercept—pose a major risk to NATO.
A ceasefire in Ukraine would allow Russia to replenish its military stocks at an unprecedented rate.
Lack of incentives for defense industry
The authors are particularly critical of German budget planning, noting it does not provide sufficient long-term clarity for the defense industry to expand production capacity as it´s not clear how much money the government will be willing and able to spend once its 100-billion-euro special defense fund is exhausted. This has also led to long delivery times and high manufacturing costs. “Long-term planning and an efficient procurement system are essential to build industrial capacity,” says Wolff.
Military procurement is also unnecessarily expensive because order volumes are relatively small and unit prices higher than for larger orders, says the report. Germany is preferring to do business mainly with domestic producers, regardless of the costs. The authors recommend more joint European defense procurement as a more efficient alternative.
Moritz Schularick, President of the Kiel Institute, says: “The ‘Zeitenwende’, or epochal shift, in military spending promised by the German government in 2022 has so far proved to be empty rhetoric. Peace will come when the regime in Moscow understands that it cannot win wars of aggression in Europe militarily. For this, Germany and Europe need credible military capabilities. Germany must have an adequate annual defense budget to at least 100 billion euros per year.”
The report makes six concrete policy recommendations and calls for a coordinated European armaments strategy.
Read the Kiel Report here: “Fit for war in decades: Europe's and Germany’s slow rearmament vis-à-vis Russia”/https://www.ifw-kiel.de/publications/fit-for-war-in-decades-europes-and-germanys...
Discover the database here: Kiel Military Procurement Tracker/https://www.ifw-kiel.de/publications/kiel-military-procurement-tracker-33232/?AD...
Media Contact:
Mathias Rauck
Press Officer
T +49 431 8814-411
mathias.rauck@ifw-kiel.de
Kiel Institute for the World Economy
Kiellinie 66 | 24105 Kiel | Germany
Chausseestraße 111 | 10115 Berlin | Germany
T +49 431 8814-1
E info@ifw-kiel.de
www.ifw-kiel.de
Prof. Dr. Guntram Wolff
Visiting Scholar
T +49 151 59905505
guntram.wolff@bruegel.org
Major weapon types: theoretical year of replenishment of 2004 stocks in Germany
Kiel Institute, Source: Kiel Report Wolff et al.
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