Germany's budget hole casts doubt over defense spending goals

Germany is reportedly expected to collect less tax revenue over the next five years. The shortfall casts doubt on whether the government can meet NATO defense spending goals and avoid the ire of its allies.

Germany will meet its pledge to boost military spending to 1.5 percent of economic output by 2025, Defense Minister Ursula von der Leyen said Monday, following reports that a budget gap could undermine that goal.

The Finance Ministry estimates that Germany would need to allocate far more money to defense spending than it already has in order to raise the defense budget to 1.5 percent of economic output by 2024, according to an ministry analysis seen by Reuters and DPA news agency.

The analysis reportedly also predicts a €25 billion ($28.6 billion) shortfall in tax revenues up until 2023 due to a slowing economy.

Germany is under pressure from the United States and other NATO allies to increase spending to 2 percent of GDP in line with an alliance agreement struck in 2014. Last year, the government promised NATO allies that it would meet 1.5 percent by 2024.

Read more: German army forms sixth tank battalion 

Germany's NATO missions

Germany's role in NATO

West Germany officially joined the trans-Atlantic alliance in 1955. However, it wasn't until after reunification in 1990 that the German government considered "out of area" missions led by NATO. From peacekeeping to deterrence, Germany's Bundeswehr has since been deployed in several countries across the globe in defense of its allies.

Germany's NATO missions

Bosnia: Germany's first NATO mission

In 1995, Germany participated in its first "out of area" NATO mission as part of a UN-mandated peacekeeping mission in Bosnia and Herzegovina. During the deployment, German soldiers joined other NATO member forces to provide security in the wake of the Bosnian War. The peacekeeping mission included more than 60,000 troops from NATO's member states and partners.

Germany's NATO missions

Keeping the peace in Kosovo

Since the beginning of the NATO-led peacekeeping mission in Kosovo, some 8,500 German soldiers have been deployed in the young country. In 1999, NATO launched an air assault against Serbian forces accused of carrying out a brutal crackdown against ethnic Albanian separatists and their civilian supporters. Approximately 550 Bundeswehr troops are still stationed in Kosovo.

Germany's NATO missions

Patrolling the Aegean Sea

In 2016, Germany deployed its combat support ship "Bonn" to lead a NATO mission backed by the EU in the Aegean Sea. The mission included conducting "reconnaissance, monitoring and surveillance of illegal crossings" in Greek and Turkish territorial waters at the height of the migration crisis. Germany, Greece and Turkey had requested assistance from the trans-Atlantic alliance.

Germany's NATO missions

More than a decade in Afghanistan

In 2003, Germany's parliament voted to send Bundeswehr troops to Afghanistan in support of the NATO-led International Security Assistance Force (ISAF). Germany became the third-largest contributor of troops and led the Regional Command North. More than 50 German troops were killed during the mission. Nearly a thousand soldiers are still deployed in Afghanistan as part of Resolute Support.

Germany's NATO missions

German tanks in Lithuania

Forming part of NATO's "enhanced forward presence" in the Baltic states, 450 Bundeswehr soldiers have been deployed to Lithuania so far in 2017. The battalion-size battlegroups there are led by Germany, Canada, the UK and US to reinforce collective defense on the alliance's eastern flank. It forms the "biggest reinforcement of Alliance collective defence in a generation," according to NATO.

Germany's NATO missions

Taking over the leadership

The Bundeswehr is due to take over leadership of NATO's multinational Very High Readiness Joint Task Force (VJTF) at the start of 2019. The rapid reaction force has been set up to counter potential Russian aggression on the alliance's eastern flank.

Spending on the military has been a source of tension between Germany's ruling coalition, with Scholz's Social Democrats (SPD) opposing demands from Chancellor Angela Merkel's conservatives (CDU/CSU) for a rapid rise in the defense budget.

Coalition agreement

Defense Minister Ursula von der Leyen, a CDU member, said during a visit to Latvia that coalition partners had been "clear" in their commitment to boost military spending to 1.5 percent of GDP.

Read more: German military lacks equipment and recruits, says damning report 

Budget talks had just begun and would be completed by March, she added.

Military spending rose to 1.24 percent of GDP in 2018 from 1.18 percent the year before. However, current budget plans have defense spending reaching only 1.23 by 2022.

Reaching the 1.5 percent target could prove politically difficult because it would likely require shifting money from other government programs to the military.

The German government maintains a policy known as the "schwarze Null" ("black zero"), which requires a balanced budget and no new net borrowing.

Trump's NATO debut does little to assure allies

America first!

US President Donald Trump welcomes Montenegro to the military alliance by appearing to shove Prime Minister Dusko Markovic in order to secure a front row berth. Montenegro will formally join NATO next month, although it may already feel pressured to increase its military spending, which currently stands at 1.6 percent of GDP.

Trump's NATO debut does little to assure allies

Trump berates allies' spending

The president was invited to unveil NATO's new 9/11 memorial. However, instead of using his speech to play up unity, Trump scolded allies for owing "massive amounts of money" to the US and NATO. Members have set a 2 percent of GDP defense spending "guideline," although the contributions are supposed to be voluntary.

Trump's NATO debut does little to assure allies

Leaders struggle to keep a straight face

Trump's 10-minute tirade on defense spending appeared to be greeted with snickering and eye-rolling. An illustration of America's new standing in the world?

Trump's NATO debut does little to assure allies

Slamming the brakes on German car sales

Leaked comments obtained by German media reveal that Trump told European leaders that Germany was being unfair with its trade arrangements and decried its surplus. "The Germans are bad, very bad," German weekly Der Spiegel quoted Trump as saying. "Look at the millions of cars they sell in the US. Terrible! We'll stop that."

Trump's NATO debut does little to assure allies

Handshake diplomacy

Trump met with France's newly elected president, Emmanuel Macron, at the US ambassador's Brussels residence. As a life-long businessman, Trump's handshakes are seen as one of his key power moves. Palms dried and jaws clenched, Macron didn't appear prepared to grant him that victory as the leaders embarked on what's been coined "the world's longest handshake."

Trump's NATO debut does little to assure allies

Not-so-special relationship

British Prime Minister Theresa May is reported to have voiced her anger and dismay after US officials leaked details over the identity of the Manchester suicide bomber. The leak led British authorities to halt intelligence-sharing with the US for around 24 hours. The breech also comes just weeks after Trump himself divulged secret intelligence to senior Russian emissaries.

Trump's NATO debut does little to assure allies

Glaring omission

If Trump had sought to assure allies of his commitment to NATO, neglecting to affirm Article 5 of the North Atlantic Treaty - which stipulates that members treat an attack against one ally as an attack against all - wouldn't have helped. Perhaps surprisingly, however, the president did mention the Russian threat on NATO's eastern border.

cw/amp (dpa, Reuters)

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