April 27, 2018 / 5:06 PM / a year ago

German defence ministry says military budget plan "unsatisfactory"

BERLIN, April 27 (Reuters) - The German defence ministry is unhappy with what it views as an unsatisfactory military budget, and will have to postpone at least one major international weapons programme unless more funds are added for 2019, ministry sources said on Friday.

The ministry negotiated a better-than-expected increase in military spending in 2019, but more funding would still be needed to plug continuing shortages in German military equipment after 25 years of declining spending, the sources said.

The new proposed budget would add 2.5 billion euros more than previously planned to the 2019 budget, and the budget would rise steadily from 39 billion euros this year to 42.2 billion euros in 2022, but that was not enough, the sources said.

“That represents a significant increase, but is unsatisfactory when measured against the enormous pent-up needs for modernisation,” said one source.

“We achieved a lot for the Bundeswehr (German military) after difficult negotiations, but not everything. The Bundeswehr wants to and must rapidly close the gaps that exist after 25 years of underfunding in procurement,” the official said.

Germany sharply curtailed military spending after the end of the Cold War, but began boosting spending again after Russia’s annexation of the Crimea region of Ukraine in 2014.

Reports by the ministry and parliament this year raised concerns that missing spare parts and quality defects had curtailed the readiness of Germany’s submarines, warplanes and some other key weapons.

The ministry said the minister had ordered that funds should be prioritised to pay for digitalisation and personal equipment for soldiers, but that meant that at least one planned major international weapons programme would have to be postponed unless additional funds were added to the 2019 budget.

No additional details were immediately available. Chancellor Angela Merkel’s cabinet is due to debate the budget plans at a cabinet meeting next Wednesday.

German Defence Minister Ursula von der Leyen and French Defence Minister Florence Parly on Thursday signed documents to move forward on joint development and procurement of a new combat jet and other programmes.

Germany is also due to kick off several major procurement programmes for new heavy-lift helicopters and warships.

The defence ministry said the finance ministry would cover some 875 million euros in added costs triggered by a recent wage agreement for soldiers and other public sector workers, but gaps remained in the modernisation budget.

No data was immediately available about how the spending would break down as a percentage of gross domestic product.

But the ministry sources said the new budget plan would result in a reduction of development spending as a percentage of GDP from 0.5 percent to 0.47 percent, despite a firm commitment in the coalition agreement between conservatives and Social Democrats to boost development spending to 0.7 percent of GDP, in line with commitments made to the United Nations.

“The Development Ministry and the Defence Ministry expect that this gap will be closed in line with the contract as part of further budgetary processes,” the source said.

The coalition agreement also calls for any additional funds made available for development to be matched equally for the defence budget, the source added. (Reporting by Andrea Shalal Editing by Peter Graff)

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