German defence budget boost still short of Nato goal

Merkel announces £4.4bn increase following Trump pressure but fails to meet 2pc of GDP commitment

GERMANY is to increase defence spending by more than €5 billion (£4.4billion) this year, Angela Merkel’s government informed Nato yesterday.

It is the biggest rise in the German military budget since the end of the Cold War but will still leave the country short of Nato’s target of spending 2 per cent of GDP on defence.

It comes after months of US pressure for Germany and other European countries to contribute more to the cost of the alliance and will be seen as a victory for Donald Trump.

But it remains to be seen whether the US president will be satisfied with military spending that still only equates to 1.35 per cent of Germany’s GDP.

There is also growing concern among Germany’s allies about equipment shortages and breakdowns that led a German military watchdog to warn last year that it could not meet its Nato commitments.

Only four of the country’s 128 Eurofighters were said to be operational at one point last year, while all six of its submarines were out of commission at the end of 2017.

In 2014, German soldiers taking part in a Nato exercise had to use broomsticks instead of guns.

Mrs Merkel’s government yesterday announced a defence budget of €47billion (£41 billion) for this year, an increase of 10 per cent on 2018.

It also promised a further increase to €50billion (£44 billion) next year – the equivalent of 1.38 per cent of GDP.

That is still short of Mrs Merkel’s pledge that Germany would meet 1.5 per cent by 2024 and hit the 2 per cent target beyond that.

It is also well below the €12billion (£10.5billion) increase called for by Ursula von der Leyen, the defence minister, who warned that joint defence projects with European allies could be at risk without more spending.

Olaf Scholz, the finance minister, is opposed to increased defence spending and at one point was offering a rise of only €2billion (£1.7billion) next year.

Hans-peter Bartels, the German parliament’s military watchdog, then warned in March that the projected budget was not enough for “fully equipped” armed forces. “The troops expect that the Nato pledge be reliably implemented,” he said.

The issue has pitched Mrs Merkel’s Christian Democrat party, which favours higher defence spending, against its Social Democrat (SPD) coalition partner, which is opposed.

Falling tax revenues amid an economic slowdown have left the government facing a €124billion budget hole over the next four years, and Mr Scholz, of the SPD, is opposed to government borrowing to cover the shortfall.

The UK is one of only seven Nato members currently to meet the alliance’s spending target of 2 per cent of GDP.