Germany Cautiously Rebuilds Its Military Might

economic power, not military might. But the need to help Ukraine defend itself against Russia led German Chancellor Olaf Schultz to announce that Germany would reverse a ban on sending weapons into war zones and spend an additional hundred billion euros to upgrade the German military kin avafans of a

tiding Usland's Leifan biltz today. Bloomberg Senior editor Alan Crawford, when I visited this region, the Ukrainian troops were just up the road and they were being trained on the Deliverer two tank explains how Germany's pushed to supply tanks and other heavy equipment to Ukraine has caused a boom in the country's defense industry, but divided the public and later in the show Doctor Bastian Giegrek. I think Germany's neighbors are not really worried about a Germany that is

strong in NATO. I think they're worried about a Germany that is weak in NATO. He's a military analyst who argues Germany needs to do even more to prepare for threats today and in the future. Allen, in a story you've written for Business Week, you write how for many years Germany had avoided building up it's military. Can you

just remind us of the history here? Well, Plenty has been written about the fact that the bundeswere the German armed forces have been underfunded for decades, and that they're in severe difficulty. They're really struggling to try and help Ukraine. It's actually one of the fascinating aspects of researching this article that I hadn't appreciated that. On the one hand, immediately in the wake of World War Two, then understandably

there was no German army. It had been soundly defeated, and even there were suspicion of any personnel that were remaining in the ashes of World War Two. Then Germany it wrote a new constitution, which was it enshrined a pacifist attitude in this constitution, but very rapidly politics got

in the way. Because of the Cold War, the onset of the Cold War, or then what was called the Bundeswair, the German Armed Forces were recreated effectively by the US and by the UK, by the victorious Allied powers, and it was allowed to come into being as a bulwark against the East, against the Iron Curtain, and at its height, at its peak in the nineteen seventies, there were half a million military personnel German Armed Forces and did something like seven thousand battle tanks. I mean, it was a

huge force, all arrayed along the East German border. But then with the collapse of the Soviet Union and with the followed the Berlin Wall in nineteen eighty nine and then German reunification the following year, there was suddenly no need for these armed forces, so they were all decimated. And ever since then Germany has had a kind of mixture of this deep reticence because of its wartime crimes

of really stepping up in military terms. It's been very wary of arms exports and frankly it's just been very reticent about throwing its weight about and now it's suddenly being asked to do exactly that. And the start of that was a big speech that Germany's Chancellor, all Aft Shaws gave and he announced this rapid military builder. What

did he say in that speech? Three days after the Russian invasion, So February the twenty seventh, twenty twenty two, he appeared before an emergency session of the Bundestag, the German parliament, and he announced what he called in at sight in vendor, which is the German word which is kind of not that easy to translate, but it's effectively something like a historic change or shift in German policy. Yeah,

that's why potent in Land's products alot of patidisa. And that meant that from now on, he said that Germany would meet NATO's target of spending two percent of the economic output on defense. He was overturning a long standing ban on Germany supplying weapons into conflict zones. That was so that he could allow Germany to send weapon right into help Ukraine. And he announced a one hundred bullion euros special fund for defense purchases to re equip the boondersware.

So that was momentous and healed at the time as historic, but subsequently he's commander criticism for it actually not quite meeting those targets. But to be fair, I think it's also a reflection of the fact that it's a difficult decision for Germany. It's like the tanker that you can't turn it around very rapidly. A lot of this money isn't we're only now seeing that it's starting to be spent.

Ellen exactly what are the details of Shows's plan. Germany has Commander constant pressure to increase both the scale of what it's delivering to Ukraine and the hotency. You know, the heavy weapon rate is what we're now talking about. At the beginning, it was Germany famously supplied five thousand

helmets and thought that that was enough. They've already lodged an order for IF thirty five aircraft from the US, of course, but they are also putting money into the German defense industry, so something like a third of that amount the government has said will be put into ammunition alone.

They're also investing in these self propelled howitzers, which has got the wonderful German name Pansa Hulbitzit's five thousand, which is the p z H two thousand, which is a massive gun on wheels that they're buying several of those, both to replace items that they've already supplied to Ukraine

and to build out the bundesware. They're buying high performance radar equipment made by this company hence Old, and they're buying this missile defense system this Irish tea, which is made in this small town in the south of Germany on the banks of Lake Constance called uber Lingen, but have actually come under criticism for not placing orders fast enough.

But those were actually starting to see those come through now, so it's you know that by no means spent all of this money, and I think we'll see a lot more orders coming in rapidly. In January, German Chancellor Shows spoke to Bloomberg editor in chief Johan milcos Way about all these weapons systems. I think, after the United States, it is Germany and the UK that are delivering the most weapons to Ukraine, and we will continue to do so.

As you know, we are absolutely active in doing the real hard stuff, and this is the case with all the artillery we delivered with our howar's this is what we did together with United States and UK when we delivered multi rocket launchers. It is what no one else did.

And we are doing a lot in the question of defense with our Gappa tanks, with what we did with this Irish tea system that is now so successful that the whole world is looking at it because it seems to be nearly one hundred percent effective in fighting against the sides. Since Russia's invasion of Ukraine, you have seen these calls for Germany to step up production and export of arms to help Ukraine, and in particular Germany's Leopard two tanks. Can you talk about the significance of this

tank and why it is so important now? Yes, I mean, frankly, the Leopard two tank in its latest iteration, it's the world's most commercially successful battle tank. Peaks on Germany from Poland, from other countries in Europe because they can't send the Leopard tanks that they have in their stores until Germany gives them the right to do so under re export law, So they're sitting there they wanted to go there. There are only two Western tanks which have been in production

continuously for the past almost half a century. That's the German Leopard two and the US M one Abrahams tank, but the Leopard two is far more widely adopted. Most of the US Abrahams tanks are actually they're made for America for the American UN Forces, whereas the Leopard two, it's been bought by countries from Qatar to Turkey to Canada, right across Europe. When we come back, Alan describes his visit to the region in Germany where these weapons are

built and where Ukrainian troops are being trained to use them. Alan, you write, the German companies that make these weapons are doing pretty well. There's a lot of new orders coming in. And you travel to the region in Germany where a lad of this military hardware is made. Where did you find there? Well, what is the first thing that you notice is that it's it's something of a kind of Bucolic area that it's known for its heath land and forests.

It's a region that's to the south of Hamburg, to the north of Hanover in the state of Lower Saxony, you know, in the former West and it used to border East Germany, and it's very rural. There were all these kind of semi timbered houses and it's all very pleasant, but as soon as you arrive in this region, there's not much immediate evidence of the armed forces being all around and the defense manufacturers until you step out of the car, and then you're just hit by the noise

of these like really deep percussions, these explosions. And that's because Rhine Metal, which I visited incidentally, they don't allow visits, so I went just to kind of to see the region. And they have Europe's largest private firing test range on the outskirts of this town where their munitions plan. It's like a weapons factory with a small town attached to it rather than the other way around. It really dominates

this small town of Interlouse. But just to the north there's the largest army base in Germany, and that's a long standing base that's been there since before the war actually and was at one time occupied by British troops, but now it's being used to train Ukrainian forces on the Leopard two tank and they have tank firing ranges of their own up there, so that between these various different ranges there are several more. There's just a cacophony

of sounds, you know. I'm no expert in the armed forces, but it sounded very clearly like machine gun fire, like you know, larger artillery fire. And then these really deep, loud, you know, scary, frankly booms that I've have no idea what they were, but they reverberate along. And the strange thing is that in the local community, because people are so used to it, they don't hear it. Actually a couple of people that I spoke to that I said, oh, that was a loud one or something, and they said, oh,

was it? Was it? They hadn't noticed. In fact, one person I spoke to said, I, you know, I've stopped hearing them a long time ago. You're right there in this region. Germany isn't just building and testing weapons. They're

also training Ukrainian troops and how to use them. One thing that's not often or fully realized, especially I think outside of mainland Europe, is that this war isn't all that far away, that Ukraine is only something like a ten hour drive from Berlin, and that Germany a lot of the help it's been giving has been somewhat low key. In the yes, it's been criticized in terms of it

dragging its heels and delivering heavy weaponry. But they have been training a lot of Ukrainian troops, and so when I visited this region then the Ukrainian troops were just up the road and they were being trained on the Leopard two tank. Because this was initially one of the reasons that was cited not just by the Germans, but in fact by the US government and others, the complexity of these systems and how difficult it would be to

train Ukrainian troops. But they are apparently extremely adept and I've learned very quickly, and these tanks are now in Ukraine. But it's not just those systems that they were also being trained on. When I was driving over there west from Berlin, then I saw some Ukrainian troops that were just obviously on their way there to receive training. Germany's training Ukrainian troops, of course, it's not the only country that's doing is The UK, for example, has also been

training Ukrainians on operating its Challenge or tanks. Alan you said how the people who live in the towns around these plants are so used to the sounds of weapons being fired, and yet you found that they themselves were pretty conflicted about whether Germany should be building up its military and exporting more weapons abroad. It's a sentiment that is actually fairly widespread in Germany that the pools consistently show a majority in favor of helping Ukraine, but there's

a substantial minority who are very wary of that. It's not because they love Russia and they want Ukraine to lose. The pools clearly showed that people have concerns about supplying weapons, about this abrupt change, this historic shift in German policy, and that to some degree is reflected in the region that I visited. Although I should stress that these places get a lot of employment, a lot of higher paid jobs from the defense industry, not necessarily to supply Ukraine.

But this is a massive increase in orders that they're receiving as a result of the geopolitical environment at the moment, as typified, you know, as expressed most clearly by Russia invading Ukraine. In any case in Germany, that leaves a

lot of people uneasy. Alan you mentioned earlier how this build up is immediately for the war in Ukraine, but actually goes beyond that when you look forward, do you think that Germany will continue to build out its military, that this long standing hesitation against doing so has now sort of turned a corner. I think that there's no alternative non for Germany. That it's being called on from all sides, from the US to or European countries, and

not least to Ukraine. That I think it's been a very powerful and painful process of waking up to the threats that it faces. But funnily enough, the very fact that it's relied upon its economic power until now makes the authorities, the politicians, the business community and others very well aware of the threats that are posed not just

from Russia invading Ukraine but around the world. And so in this kind of new world order where protectionism and conflict and competition with China among others is the norm, then it's frankly unavoidable I think for a country like Germany, with its size and ambitions, to do anything other than to step up in the military sphere. Alan Crafford, thanks so much for Cameranasha. Thanks Wez after the break. How do other European nations feel about Germany rebuilding its military?

As we've heard a lot of people in Germany are wary about possibly going too far in building up the military. Doctor Bostian Gigreg argues the opposite, that Germany needs to do even more to defend itself and its allies. He's Director of Defense and Military Analysis at the International Institute for Strategic Studies, and from twenty ten to twenty fifteen he worked for Germany's Ministry of Defense. Bostian, how would you assess Germany's military build up in the year since

it was announced after Russian Bada Ukraine? Well, I think the decision that people will remember is, of course that off budget fund of one hundred billion euros to be spent on the modernization of the German armed forces. This will not be enough to make the German Armed Forces into a fully fledged, competent a bet already fighting force, but it will be used to now financially underpin a lot of the decisions that were taken earlier before the

war started but were never properly funded. So this is at best a catch up effort. This is important. This will get things that before we're not achievable, but one needs to be realistic. This is making good on planning, assumptions and promises that were effectively made between twenty sixteen and twenty eighteen, for which Germany did not have the money. It now has some extra money. It will go towards these things, but it is not yet the wholesale the

sea change that perhaps that cyte Vendor's speech suggested. Well, let's talk about some of those details. What are some of the things that have happened already and what else needs to be done beyond what's being done right now. I think where we really can say things have happened. So sideventded to me has really three elements. One is ge economics, one is about geostrategy, and one's about the

military aspect. I think where most has happened is actually geo economics, because this is about decoupling from Russia and the energy sector and in other areas of economic activity. And here Germany has achieved a lot in a year. I mean, that's clear and that needs to be recognized, actually more than some people have assumed would be possible. So German energy dependency on Russia to me is a thing of the past and I don't think it is

coming back. And a similar conversation now has started actually with regards to China. Is it wise to further invest into the economic ties with China, but this is not as focused yet as the Russia conversation is, and it's more difficult because the scale and the varied nature of the dependencies of the German economy on China just make that more difficult. In terms of geostrategy, I think Germany needs to do more. Germany really needed to admit that

it was wrong about its assessment of Russia. The threat assessment was wrong, that it was too optimistic, despite by the way, many warnings from friends and allies about the ability to change Russia through dialogue, through engagement and through trade, and to move on from that assessment which was wrong, and move on to an assessment shared by many of its Eastern neighbors and Eastern partners, that Russia as a threat to Germany and to German security and needs to

be treated as such. And by the way, I saw some interesting polling data actually commissioned by the German government that two thirds of Germans do see Russia as a threat to Germany. But this shift from yes, we were wrong too well. Therefore we need to adopt a new mindset that remains incomplete and that's ambiguous, and it looks ambiguous, so I think that is one area where more work

needs to be done. And then finally, as a military dimension, the one hundred billion of budget fund headline grabbing was created. Now it is very slow to come into practice. The drawdown is very slow. Very few projects have actually been put into contracts. A lot more reform is needed in around the acquisition process for it to be more agile, to be faster, to be more more strategic. There is

a problem with retention and recruitment in the force. And then there's just that wholesale, very large gap on the munitions side which needs to be addressed alongside equipment recapitalization. And that's why I'm saying one hundred billion will not be enough. Becomes more and more obvious that what this fund will achieve is implement defense planning targets that we had before the war even started, but that we're never funded appropriately. And now it is about realizing that Germany

needs to fund its armed forces much better. Two percent of GDP for Germany should be the floor, not the ceiling. We're still not there, and raising the defense budget needs to be achieved fair soon, and then it needs to be maintained at that level. Otherwise the shortfalls of the buddness will remain unfixable during the next ten years. In a recent article, you wrote that Berlin's interpretation of the situation in Ukraine and its implications for Europe still diverge

from that of many allies. What did you mean by that? Yeah, I think Olaf Schotz, the German Chancellor, he prefers to say that Ukraine must win or that Russia must not win. He prefers not to say that Russia must lose, and that, clearly, to me, is what is required here. Russia must lose.

And this might sound like a semantic difference, but I think it points to something bigger, and namely that there are still some in the political and economic sphere of Germany who think that once the war ends, there will be a return, or there will be some return to business as usual with Russia. And to me, I find that unthinkable for a generation to come, and in any case, highly dependent on what kind of Russia emerges and what strategic persona it takes. But this is the kind of

ambiguity that is irritating to others. And I mean, you know what can recognize that while often slow and reluctant. Germany has now taken a place among the strong military supporters of Ukraine. That's not a small development, and one can add, well, let's hope it continues and expands further and faster. But I think that fundamental challenge remains still to adjust to a reality where the European security order and the preferences that Germany associated with it, those are gone.

You know, big wars back in Europe. Mechanisms of cooperation coordination have been shredded by this war to nothing. Economic dependencies that were accepted turned into unacceptable risks. So, in short, that European order of prosperity and security on which Germany depended was fundamentally undermined by Russia's war of aggression. And Germany still needs to come to terms with that new reality.

And Germany maintains that element of ambiguity that maybe there's a way back to how things were before, when many others say we are in a new era. The world is no longer as it was before and it will not be again as it was before. And what about other countries. How is the idea of Germany as a major military power being perceived around Europe? Outside. It's helped for the war in Ukraine. I think Germany's neighbors are not really worried about a Germany that is strong in NATO.

I think they're worried about a Germany that is weak in NATO. That's a shift, of course, of some of the historical dynamics. But they all understand, in my view, that some of the weight and some of the mass of a credible conventional defense and deterns posture of NATO on NATO's eastern flank facing Russia will have to be provided by that big and economically powerful country that is Germany.

They also understand that the delta between that latent potential that Germany has and the military output it actually produces for collective defense and security, that delta is wider for Germany than it is for almost any other European NATO country. And they want Germany to close this delta, to show up well prepared, to be well equipped, to be well let, to be well funded and firmly embedded in NATO and

the EU. So I think the worry really is if Germany does not deliver NATO's deterrence and defense posture has a whole and the weak spot at its center, and that is something that I think most partners and allies really would like to avoid. Bestian Giegert, thanks so much for speaking with me. Well, so it's pleasure, Thank you. Thanks for listening to us here at The Big Take.

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