NATO's 28 member states vowed to to lift defense spending toward a target of 2 percent of gross domestic product. Germany's spending is currently at 1.3 percent.
(Bloomberg) -- Germany will boost defense spending from next year as NATO members respond to Russia’s involvement in the Ukrainian crisis and increased military exercises ordered by the Kremlin along the alliance’s borders.
In a revision of mid-term spending plans, Chancellor Angela Merkel’s cabinet on Wednesday approved raising defense outlays by about 2 billion euros ($2.1 billion) per year from 2016. This will boost spending on Germany’s armed forces to 35 billion euros annually by 2019 and will pay for equipment and a “widened NATO engagement,” according to the draft budget.
More spending is “urgently needed amid global crises and sends a strong signal to our soldiers,” Andreas Scheuer, general secretary of Merkel’s Christian Social Union allies, said by e-mail. Germany “more than ever needs a modern and efficient army.”
Forecast budget surpluses allow Germany to ratchet up defense spending without borrowing cash to pay for it. Merkel has taken the lead in pushing forward with European Union sanctions that have been imposed on Russia and she’s warned the crisis over Ukraine may take a long time to resolve.
Still, the spending increase won’t allow Germany to reach the level it pledged along with fellow North Atlantic Treaty Organization members last year. The alliance’s 28 states vowed to to lift defense spending toward a target of 2 percent of gross domestic product. Germany spent 1.3 percent of GDP on defense in 2013, according to the World Bank.
More military spending is a success for Defense Minister Ursula von der Leyen, who’s struggled to improve pay and conditions for soldiers and speed up the replacement of aging equipment from protective clothing to helicopters.
Germany switched to a professional army in 2011 after ending military conscription.