Scholz’s €100 billion surprise: A paradigm shift in Germany’s security policy?

3 March 2022

Until 27 February 2022, a deluge of social media posts, memes, and articles in Germany were asking: Where is Olaf Scholz ? During his first months in office, observers quipped that the new German chancellor was missing from the national and international stages. He was accused of lacking profile, charisma, and a visible political agenda.

Then, on 28 February, in response to Putin’s invasion of Ukraine, Scholz achieved a “Ka-boom” in foreign policy (a phrase Scholz himself coined in light of the COVID-19 pandemic). In his speech to the German Bundestag, the chancellor cleared the air on German foreign and security policy in an unprecedented manner: the Bundeswehr (federal armed forces) will receive €100 billion as special assets for investments and armaments projects. In addition, Germany will not only meet NATO’s two per cent defence investment guideline but even exceed it.

In 2019, Olaf Scholz himself — then finance minister — prevented an explicit commitment to boost the defence budget as the then defence minister Annegret Kramp-Karrenbauer had demanded. According to Spiegel, back then, his ministry called an increase in defence funding to two per cent of GDP rather unrealistic. What was unrealistic then has become reality now.

But this was not the only surprise in Scholz’s 28 February speech: the chancellor called to anchor the special fund in the German constitution. Given the balanced budget provision enshrined in the German constitution, a special fund in the announced amount would hardly be justifiable. By anchoring it in the constitution, Scholz is taking precautions against potential accusations that the €100 billion fund is unconstitutional.

Due to the complexity of weapon systems and personnel requirements, a financial injection alone is not enough to solve the Bundeswehr’s structural challenges.

Moreover, the chancellor pledged greater development cooperation, improved cyber resilience and critical infrastructure, closer cooperation with France, the promotion of climate neutrality and a climate-friendly energy policy, and the acquisition of the Heron armed drone. These plans indicate another political change: only last year, Scholz was criticised by Kramp-Karrenbauer for dithering on drone procurement. His Social Democratic Party (SPD) was among the most adamant sceptics of drone weaponisation, even after the governing coalition decided in principle to procure weaponised drones. Does Olaf Scholz's speech mark not only a personal but also a broader turning point in German foreign and security policy?

Normalisation not militarisation

As early as 1962, Der Spiegel published a contentious article highlighting that Germany’s military was only partially capable of defending the country. Even 60 years after the so-called ‘Spiegel affair’, Germany’s Bundeswehr is still struggling with an equipment shortage. The operational readiness of the main weapon systems is officially at 77 per cent, according to the German Defence Ministry. In recent years, material readiness has gradually improved. The political target of an average of 70 per cent has been exceeded, but a closer look at individual systems reveals major challenges.

For example, the readiness of the NH90 NTH Sea Lion is only about 19 per cent, while the average readiness of Bundeswehr helicopters is 40 per cent. The inspector general of the Bundeswehr, Eberhard Zorn, recently noted that rapid mobilisation is rather poor and that operational readiness also requires more than just materially ready weapon systems. Due to the complexity of weapon systems and personnel requirements, a financial injection alone is not enough to solve the Bundeswehr’s structural challenges, although it certainly provides a monetary basis. Consequently, the one-time sum of €100 billion does not represent a militarisation trend, but necessary investment to plug serious holes in its equipment.

Scholz’s speech underlined that Germany will not give up its deeply ingrained role as a civilian power. According to political scientist Hanns W. Maull, Germany’s foreign policy relies on three pillars: “never again”, “never alone”, and “politics before force”. This means that Berlin’s foreign policy is based on the principles of multilateralism, Western values, and the rejection of the use of military means except as a last resort. Scholz’s speech clearly referred to all these pillars of civilian power. He emphasised that: “We will never resign ourselves to violence as a means of politics. We will always stand up for the peaceful resolution of conflicts. And we will not rest until peace is secured in Europe”.

For many, it came as a surprise that Germany, contrary to its long-standing basic political stance, has decided to supply weapons to Ukraine (1,000 hand-held anti-tank weapons and 500 Stinger ground-to-air missiles). However, partners in the EU and NATO had recently sharply increased their pressure on Germany to supply weapons and so the decision can be explained by the first principle of multilateralism, which includes alliance solidarity. The issue of arms deliveries shows that the principle of diplomatic primacy, combined with military restraint, must be constantly balanced with the expectations of allies. Although these principles are indispensable for understanding German foreign policy, they are in a very tense relationship with each other.

The Kosovo war, Germany’s most famous example of the deployment question, helps illustrate this tension. At the Green Party’s Special Conference on Kosovo on 13 May 1999, then foreign minister Joschka Fischer said: "Auschwitz is incomparable. But I stand on two principles, never again war, never again Auschwitz, never again genocide, never again fascism". At the time, Fischer triggered a general debate on German war operations and foreign policy, leading to a reinterpretation of the original rejection of any military force under "never again" to legitimise the deployment of the Bundeswehr.

Even today, the principle’s interpretation as well as its relationship to the principle of alliance solidarity are controversial, especially among supporters of the Left Party and left wings of other parties. However, since the Kosovo war, Berlin has repeatedly shown itself willing to deploy the Bundeswehr abroad. While Germany is still more militarily reluctant than other states, the deployment debate is no longer as strongly ideologically polarised as it was at the time of the first Kosovo mandate.

Still, Germany’s number one security instrument continues to be diplomacy. For example, Germany is ranked 7th in the Lowy Global Diplomacy Index. This reflects the power of the "politics before force" principle. However, we too often forget that defence institutions also play a role in diplomacy. Not in the sense of coercion, but as mediating forums for security interests and international confidence building. Accordingly, instead of a turnaround in German foreign and defence policy or even militarisation, we should understand Scholz’s announcement of 28 February as a catalytic moment within an ongoing normalisation process.

A stronger ally in Europe

Overall, Scholz’s announcements will strengthen Germany’s security role in the EU and NATO. Since these are collective security systems, strengthening Germany also improves the security of all other members, and reduces their uncertainty and concerns about Berlin’s reliability and solidarity with partner states. This solidifies trust in multilateral security systems and reduces the risk of national go-it-alone actions as a result of disappointment or insecurity. As one of the most powerful countries in Europe, Germany has often been accused of not living up to its allies' expectations, be it on defence spending, cancelling Nord Stream 2 or allowing SWIFT sanctions. The fresh adjustments in all these matters are therefore a sign of clear dedication to multilateral solutions.

If Germany is to become a stronger ally in Europe, it must also seek a change in bureaucracy and mentality. Anyone who has ever tried to gain insight into the Bundeswehr’s regulatory apparatus, its hierarchies or its procurement system, knows what German “bureau-crazy” means. As Defence Minister Christine Lambrecht points out, there is still a lot of work to be done in this area.

Given Scholz's pronounced commitment to France, Germany’s closest ally in Europe, a renewal of the Franco-German engine on EU security issues is to be expected. However, we can also detect potential tensions here: France remains the guiding figure of the European strategic autonomy idea and an Indo-Pacific agenda. Germany, on the other hand, envisions both Europe’s security policy and Indo-Pacific strategy in strong collaboration with the United States. Nevertheless, the Berlin-Paris axis in particular has significantly advanced both political issues at the EU level and deepened cooperation.

Implications for the Indo-Pacific

Still, despite the announced investments, Germany should not be expected to change its previous economic approach to countries in the Asia-Pacific region, particularly China, any time soon. The German government’s 2020 Indo-Pacific Guidelines illustrate the multifaceted civil, economic, and governmental cooperation channels with Asian countries. The document also states that Germany is working with NATO to expand partnerships with Indo-Pacific countries such as Australia or Japan, in order to promote security in various areas including cyber security, maritime security, humanitarian assistance, counterterrorism or arms control.

If Berlin upgrades its armed forces, partners in the region will certainly confront it with questions region about its future security role in the Indo-Pacific. However, at present, both Germany’s defence priorities, due to the war in Ukraine, and its capacities are in Europe. Germany does not currently, nor will it in the foreseeable future, have the military capabilities of France or the US for robust operations in the Indo-Pacific. Even after the €100 billion have been spent, human resource capacity will still need to be built. Both in the use of funds and the development of personnel, one must consider the time horizon until an operational capability is achieved.

Germany’s strengths lie elsewhere: It enjoys a high standing in the world, both economically and diplomatically. It can boast of close relations with Asian partner states — particularly with China — that are unique in their form, scope, and depth. NATO and the EU already benefit from Germany’s soft security capabilities. Accordingly, it will remain necessary to discuss strategic priorities and the distribution of tasks not only within NATO but also within the EU, to adequately incorporate the strengths of each country. Olaf Scholz's €100 billion surprise is an important milestone in the development of Germany's foreign and defence policy. However, to become a true, lasting paradigm shift, it now requires further measures to compensate for the Bundeswehr's previous structural weaknesses.

DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.

Author biography

Christiane Heidbrink is a research fellow at the Center for Global Studies (CGS) at the University of Bonn. As project manager of the Bonn Power Shift Monitor (BPSM), she explores the political implications of global power shifts, especially China's international rise. She is now pursuing a PhD on security discourses about China's BRI and conducts research in the field of security policy. Image credit: Flickr/Valsts kanceleja/ State Chancellery.