Berlin and Washington Revive Their Defense Partnership

Jeff Rathke

President of AGI

Jeffrey Rathke is the President of the American Institute for Contemporary German Studies at the Johns Hopkins University in Washington, DC.

Prior to joining AICGS, Jeff was a senior fellow and deputy director of the Europe Program at CSIS, where his work focused on transatlantic relations and U.S. security and defense policy. Jeff joined CSIS in 2015 from the State Department, after a 24-year career as a Foreign Service Officer, dedicated primarily to U.S. relations with Europe. He was director of the State Department Press Office from 2014 to 2015, briefing the State Department press corps and managing the Department's engagement with U.S. print and electronic media. Jeff led the political section of the U.S. Embassy in Kuala Lumpur from 2011 to 2014. Prior to that, he was deputy chief of staff to the NATO Secretary General in Brussels. He also served in Berlin as minister-counselor for political affairs (2006–2009), his second tour of duty in Germany. His Washington assignments have included deputy director of the Office of European Security and Political Affairs and duty officer in the White House Situation Room and State Department Operations Center.

Mr. Rathke was a Weinberg Fellow at Princeton University (2003–2004), winning the Master’s in Public Policy Prize. He also served at U.S. Embassies in Dublin, Moscow, and Riga, which he helped open after the collapse of the Soviet Union. Mr. Rathke has been awarded national honors by Estonia, Latvia, and Lithuania, as well as several State Department awards. He holds an M.P.P. degree from Princeton University and B.A. and B.S. degrees from Cornell University. He speaks German, Russian, and Latvian.

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jrathke@aicgs.org

Will Germany’s Next Government Address its Defense Spending Dilemma?

German Defense Minister Annegret Kramp-Karrenbauer visited Washington on June 30, developing Germany’s emerging role as one of the Biden administration’s most important defense relationships. This was her third in-person meeting with Secretary of Defense Lloyd Austin, whose first trip to Europe started in Berlin in mid-April and who also participated in a meeting of the “Quad” defense ministers (United States, Germany, United Kingdom, France) following the June 14 NATO Summit. Her presence in Washington served multiple purposes—in particular, to strengthen policy alignment in advance of the July 15 visit of Chancellor Merkel to the White House and to further defense cooperation that will endure through the end of Merkel’s government and beyond. It is no doubt a positive side-effect for her that meetings with Austin and National Security Advisor Jake Sullivan underscore Kramp-Karrenbauer’s stewardship of a crucial German international relationship as she runs for a seat in the September 26 Bundestag election.

The security relationship between the United States and Germany has been a source of both contention and continuity in recent years. Disagreements over the use of force (such as in Iraq or Libya) or about the level of Germany’s burden sharing have ultimately been outweighed by the central role Germany plays in NATO and the European Union and as host to the largest overseas presence of U.S. stationed forces. President Biden has emphatically embraced the transatlantic security partnership, which—whatever its shortcomings—provides leverage that he considers essential in achieving American objectives in a more challenging world. The timing on the German side is suboptimal—Merkel’s government has only a few months left in office. But the support of the mainstream German parties for the transatlantic pillar gives Merkel’s government ample space to move forward with Washington in confidence that most initiatives will be sustained by whatever coalition is likely to be formed later this year.

The Defense Minister’s meetings in Washington took place on the day that the last Bundeswehr personnel returned home from Afghanistan. Germany was the second-largest troop contributor to the NATO-led mission, suffering the loss of 59 servicemembers during nearly twenty years on the ground. Kramp-Karrenbauer arrived in Washington fresh from two triumphs—last week the cabinet approved an increase to the defense budget that will bring 2022 expenditures to a record €50.3 billion ($59.6 billion), and the Bundestag’s Defense and Budget Committees approved procurements totaling nearly €20 billion, including major projects such as the Future Combat Air System, the Poseidon P-8 maritime patrol aircraft, and the Puma infantry fighting vehicle. (The final 2022 budget is expected to be passed by the Bundestag that takes office in October.)

Disagreements over the use of force or about the level of Germany’s burden sharing have ultimately been outweighed by the central role Germany plays in NATO and the European Union and as host to the largest overseas presence of U.S. stationed forces.

Kramp-Karrenbauer’s short-term budgetary success is considerable—the Defense Ministry will see an increase in resources of 7.2 percent over 2021, and the budget next year will be 56 percent higher than in 2015. According to NATO data, Berlin’s spending will reach 1.5 percent of GDP—a percentage increase resulting in part from a decline in German GDP during the early months of the COVID-19 pandemic. German defense spending in 2021 will be 10 percent greater than that of France. This disparity sheds a positive light on Germany’s diligent improvement of military funding, but it also raises uncomfortable questions about the effectiveness of German spending, with persistent readiness issues and when one considers France’s higher operational tempo and political ambition, to say nothing of its nuclear arsenal.

The impressive increases in German defense spending also contain an ambivalent aftertaste, because Germany’s four-year medium-term financial planning continues to project declines beyond 2022. The cabinet’s decision to raise next year’s defense spending to €50.3 billion also established targets that would bring defense outlays down to €45.7 billion in 2025, a return to 2020 spending levels. This disjuncture between the exigencies of next year’s spending and the aspiration to limit longer-term commitments has persisted for a decade, as Christian Mölling and Thorben Schütz from the German Council on Foreign Relations have demonstrated. To a significant degree, this is a result of coalition politics—Chancellor Merkel’s Christian Democrats favor increased defense spending, but their coalition partners the Social Democrats have been skeptical, and the SPD controls the Finance Ministry, giving them the leading role in constructing the federal budget. The balance that has resulted in recent years is that the coalition has always agreed to increase defense spending next year, and in return, it expresses an aspiration to bring the numbers back down in the future. It is a very German sort of compromise—the price paid by the country’s international commitments to placate its political realities.

The coalition has always agreed to increase defense spending next year, and in return, it expresses an aspiration to bring the numbers back down in the future. It is a very German sort of compromise—the price paid by the country’s international commitments to placate its political realities.

This is in some respects a messaging problem that affects Germany’s alliance relationships—Americans and other NATO members focused on transatlantic burden sharing are concerned that Germany’s commitment to reversing a decade of underinvestment in defense could prove fleeting. Germany’s approach provides just enough evidence to nurture those doubts and prevent Germany from enjoying the influence that Berlin’s growing financial commitments should afford it. But the problem goes beyond NATO diplomacy—a sinking medium-term budget target limits the ability of Germany’s defense procurement to plan and execute the major acquisitions that are required by German capability commitments in NATO.

Germany’s next government will face a choice between muddling through in the manner of the Grand Coalitions since 2013 or setting a course that tells a clearer story to the German public and the country’s partners and allies about the sustainability of Berlin’s commitment to growing responsibility and leadership. Whether the coalition arithmetic will produce a government that is prepared to address fundamental security policy issues is still an open question (though Ulrike Franke of the European Council on Foreign Relations has offered an optimistic view of how that might come about). The Biden administration has softened U.S. policy toward the 2 percent defense spending target, but that could easily be misinterpreted by some in Germany as a weakening of U.S. expectations for continued improvement in burden sharing. Clear signals from Washington will play a key role in how German parties will shape and implement their security contributions in the coalition negotiations. Ultimately, the skill of German and American leaders in prioritizing and coordinating will determine the effectiveness of the German-American defense relationship for the years to come.