MUNICH (dpa-AFX) – Regardless of the billions in debt for the armed forces According to calculations by the Ifo Institute, German defense spending is still well below the target agreed in NATO in 2014. According to this, the federal government will spend 64 billion euros on defense this year. That would be 1.6 percent of German economic output, and 17 billion euros less than the two percent agreed in NATO, as the Munich economic researchers announced on Tuesday.
“This is the largest deficit of any country,” said Florian Dorn, one of the authors. In no other country is there such a large billion-dollar gap between promises and actual expenditure. According to the Ifo, the debt pot of 100 billion euros for the Bundeswehr, christened “special assets”, will not change anything for the time being.
NATO is largely financed by the USA, which, according to Ifo, pays 818 billion of the total alliance expenditure of 1.2 trillion euros. Finances will be an issue at this year’s NATO summit in Vilnius in July.
Germany is by no means alone. According to the Ifo, only 11 of 30 member states are keeping the promise made at the time to increase defense spending towards two percent of gross domestic product.
“From a financial perspective, this is a classic problem of free riders,” write the scientists in their essay – a point made by the former US president donald trump led to furious attacks against Germany and other European nations.
In terms of economic output, the USA is second, Germany is 17th. According to the Ifo, Poland is now in first place, spending 4.3 percent of its gross domestic product on the military, which is 17 billion euros more than the country actually needs to.
The two percent target is therefore mainly met by countries in the vicinity of Russia, and several states have increased their military spending significantly after the Russian attack on Ukraine. Luxembourg comes in last with 0.7 percent, but the small state is not a military power anyway. A total of 31 countries belong to NATO, not counting Iceland by the Ifo scientists. Because the island state in the North Atlantic does not maintain an army.
The scientists did not base their calculations on the budgets of the respective defense ministries, but on a so-called “NATO definition”, which, according to the Ifo, includes somewhat higher sums in some countries. This also includes budget items that are not booked in the defense budget./cho/DP/mis
Leverage must be between 2 and 20
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