Experts talk themselves into a frenzy: We need defense spending with moderation and balance

The global situation is demanding. From the Russian attack on Ukraine to Trump's questioning of security policy certainties, a shock wave is emanating which, however, is clouding the minds of many. The German security policy debate has a two-fold bias. The majority of experts are warning of a Russian attack on NATO without any empirical evidence, and some are even naming a year in which it could occur. During the election campaign, the Conservatives and the Greens outdid each other with calls for a massive increase in defense budgets, and the new federal government will hardly be able or want to escape this pressure. It is even conceivable that the old Bundestag, in a coalition of the CDU/CSU, SPD, FDP and Greens, will approve another "special fund" for the Bundeswehr in the hundreds of billions. A radical change in mentality and massive investment in German "war capability" are the order of the day. Well-known economists are calling for a massive increase in defense spending, on credit if necessary. But what are the facts?

Over the past ten years, the German defense budget has more than doubled from 32.4 billion in 2014 to 71 billion in 2024 (of which 51.8 billion is regular and 19.2 billion is from the debt-financed "Special Bundeswehr Fund"). The quota of two percent of GDP pledged by all member states will of course only be achieved by adding the special fund, which will be spent in 2027 and has not been continued in the federal government's current financial planning. There is therefore a real need for action in the medium term, which is exacerbated by the imponderables caused by domestic political changes in the USA. However, firstly, we should not be alarmistically exaggerated, but rather start from a sober threat analysis and secondly, we should not engage in voodoo economics.

Spending on armaments must be balanced

A Russia that is having great difficulty achieving its goals in Ukraine is also being accused of planning to attack NATO territory. The majority of security experts are practically talking themselves into a frenzy, supported by supposed intelligence assessments of Moscow's aggressive plans. A sober look at Russia's options and intentions, however, shows that Ukraine is a special case and there is little to suggest that Russia could or would even want to attack NATO territory.

The alarmism is not plausible when you look at Russia's capabilities in Ukraine and the hope of the same security experts that Ukraine can stop Russia with our help. Regardless of this, NATO is now much stronger than its enemy Russia. The total of around 1,264 billion US dollars that all NATO countries spend together is offset by a Russian defense budget that - although growing rapidly - is a fraction of that. This is true even if you only add up the spending of the European countries.

The economic arguments for the supposed need for massive, rapid rearmament are just as incomprehensible. If the arguments of some economists were sound, then one should always invest significantly more in the military and armaments, regardless of threat situations. This argument does not stand up to the demands of economic order. Of course, armaments expenditure must be balanced in changing risk situations. However, it is questionable whether a massive increase in military expenditure is an economic gain for an economy and - as is increasingly assumed - leads to technical innovations in the economy through spillover processes. Investments in education and infrastructure certainly seem to be more economically promising. Financing the whole thing on credit and breaking the previous budget logic is also not very convincing. In addition, it is also important to take into account expected global reactions and to check whether this actually improves the security situation or whether the well-known security dilemma is not just finding a new, more expensive and more dangerous equilibrium at a higher level.

The basic tone of the German debate follows unnecessary alarmism

Overall, it is understandable that NATO member states make an appropriate contribution to collective defense. And it also makes sense to increase Europe's ability to act. All of this will cost money. But anyone who wants to spend three or four percent (instead of two) of the gross domestic product on defense must not only justify this in terms of security policy, but also say where the additional 30 or even 60 billion euros will come from each year and what economic effects this will have. In addition, the focus on ever more armaments is inappropriate. Because without an effective effort to politically stabilize the military balance and the priority given to disarmament and arms control negotiations, there will be no security. But all of this has been completely lost sight of. The talk of "war capability" that security politicians and economists are currently agreeing on is exaggerated and the security policy debate should find a balance and a middle ground.

The basic tone of the current German debate follows unnecessary alarmism and seems to be more due to the security policy zeitgeist and the need to justify an inappropriate increase in the defense budget than to an objective security policy assessment.

Prof. Dr. Thomas Glauben is an economist and Prof. Dr. Johannes Varwick is a political scientist at the University of Halle-Wittenberg.

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