A group of experts, including the president of the Kiel Institute for the World Economy, Moritz Schularick, have published a paper estimating the financial needs of the German defense sector to be significantly higher than previously thought. According to the paper, the financing gap could amount to more than 500 billion euros.
The calculation is based on the assumption that Germany will need to invest 3 to 3.5 percent of its gross domestic product (GDP) in defense, which would be around 130 to 150 billion euros per year. The second assumption is that a future government could reallocate 10 billion euros per year from the regular budget for defense purposes. As the authors do not believe in corresponding budget cuts, they consider the estimated needs as a lower bound and refer to the total of more than 500 billion euros.
The experts also advocate for the targeted use of defense funds to create an “asymmetric superiority” in the event of a war. They list a series of concrete measures that should be implemented within six months to five years, focusing on technological superiority.
In the short term, they demand, among other things, the deployment of a “wide-ranging drone wall over the NATO eastern flank.” They also recommend the rapid expansion of underwater surveillance in the Baltic Sea, in cooperation with neighboring countries, to prevent Russia’s hybrid warfare in the area of critical infrastructure.
Regarding nuclear deterrence, the paper recommends cooperation between Germany, France and the United Kingdom.
The authors consider a debate about the number of tanks and aircraft to be unproductive. They also implicitly advise against the procurement of additional combat jets from the United States, stating that Germany has already invested significant sums in F-35 jets and that their operation requires regular software updates and maintenance, which would be controlled by the US, leading to continued dependence.
CDU leader Friedrich Merz had previously mentioned the F-35 as a potential topic for deals with US President Donald Trump, although this was before Trump’s recent statements.