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Thursday, March 23, 2023

Defense: Two percent target would correspond to a budget of 65 billion

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As a result of the “turning point” proclaimed by Chancellor Scholz, significantly larger sums are to flow into Germany’s defence. Per NATO target, these are high billions.

Germany would have to increase its defense budget by an additional 15 billion euros in the current year to achieve the two percent target for defense spending agreed in NATO. This amount only applies to the so-called individual plan 14 in the federal budget, i.e. the defense budget, was explained to the German Press Agency from government circles in Berlin.

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The agreed goal of NATO is that by 2024 all allied states approach the benchmark of spending at least two percent of their gross domestic product on defense. Chancellor Olaf Scholz (SPD) declared in the Bundestag on February 27 last year that from now on Germany will invest more than two percent of its gross domestic product in its defense every year – a reaction to the Russian attack on Ukraine.

The law introduces a kind of accounting

For this purpose, a so-called special fund was set up as part of the “Zeitenwende”. “With the help of the special fund, two percent of the gross domestic product will be made available on a multi-year average of a maximum of five years based on the current government forecast for defense spending according to NATO criteria,” says the law for the credit authorization. The law specified the government’s goals and introduced a kind of overall accounting for several years.

According to NATO criteria, the two percent target also includes some expenditures that are not paid for in Germany from the defense budget (sectoral plan 14). The expenditure of the respective year from the 100 billion pot is also included in the calculation. Last year, defense spending accounted for around 1.5 percent of gross domestic product. According to internal government calculations, a rate of around 1.6 percent is expected for the current year.

Source: Stern

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