Germany's rearmament calls for vigilance

On Feb. 24, 2022, Russia launched its special military operation in Ukraine. Even today it is not easy to pinpoint what triggered this still ongoing warfare taking a heavy toll on the world’s economy, as both sides offer their versions of the story.

One major overlooked consequence of this war is the aggressive rearmament of Germany that may have a huge impact on global geopolitical uncertainties for decades to come.

Only three days after Russia’s military entry into Ukraine, German Chancellor Olaf Scholz stood before Germany’s parliament in an emergency gathering and announced the biggest change to German foreign policy since World War II, “We are experiencing a Zeitenwende (watershed moment).”

This watershed moment marked the beginning of the proactive rearmament of German military forces. The emergency gathering saw a German commitment of €100 billion (US$109 billion) to a fund for its armed services and the ramping up of its defense spending above 2% of its gross domestic product.

After the collapse of the Third Reich in World War II, Germany prioritized economic development in its geopolitical approach, and deliberately shunned the building up of its military force. It has sought security through partnership with strong military allies under the shield of North Atlantic Treaty Organization (NATO).

As Germany gradually becomes the leading economic powerhouse in Europe, it wields its political force though its leadership in the European Union on the world stage. Germany has long favored a more diplomatic, less militaristic foreign policy.

Germany has not been aggressive in military spending because of its historical memory and guilt, even under the pressure from the U.S. government (who wants to sell more weaponry to Germany) in recent years, particularly the Trump administration. In 2021 Germany spent 1.49% of its GDP on defense, putting it in the bottom 10 within NATO in spending despite having the largest economy in Europe.

But the War in Ukraine totally changed the defense rhetoric and military approach by the German government, or maybe the war is just the perfect excuse for its military ambition that has been suppressed for so many decades.

In July 2022, Germany’s federal government approved the draft 2023 federal budget as well as the Bundeswehr special fund announced following Russia’s invasion of Ukraine. Military spending for the next four years reflects the benchmarks decided by its federal cabinet in March, with core defense spending in 2023 amounting to €50.1 billion.

This makes Germany’s military budget the third largest in the world — coming after the United States and China, two countries that are geographically much larger and demographically much more populous, but beating out the rest of the globe including countries like France, the United Kingdom, India, and even Russia.

In a major policy U-turn earlier this year, Germany abandoned its decades-long policy of not supplying lethal weapons to crisis zone and started to ship Leopard 2 battle tanks, Gepard anti-aircraft systems and other advanced weaponry to Ukraine.

In June 2023, Germany unveiled its first ever national security strategy, in which Russia is labeled as the greatest threat to peace and security “for the foreseeable future.” This comprehensive security strategy also advocates a balanced approach to China and a specific strategy on China is under preparation by the German government.

The publication of this national security strategy illustrates to some extent that Germany is psychologically ready to put behind its shameful past on the wrong side of history and move on to start on an equal footing like every other country, if not more. Germany is now accepting, if not willingly taking, the role of a military leader.

There was a slight tweak Wednesday as the German government retreated from a plan to legally commit itself to meeting NATO’s 2% military spending target on an annual basis, with a corresponding clause in a draft of the budget financing law passed by the cabinet of Chancellor Olaf Scholz deleted on short notice. But Germany will still stick to its current pledge of meeting the 2% target on average over the next five-year period. The buildup of any military might should be closely watched, and the rising of Germany as the potential military leader in Europe deserves even more attention. It is uncertain whether the watershed moment of German military rearmament and defense approach bodes well for world peace down the road. (The author is an independent financial investor.)