Germany Has Decided to Merge The State and the Military-industrial Complex

Ksenia Loginova
Izvestia

The Concept Has Changed: "Simplification" of interaction between the state and military companies. The SPD and the Greens are in favor of the initiative, the Liberal Democrats are against it.

The German state is again following the dangerous path of merging with the military-industrial complex. The initiators of the Concept of security and defense-industrial development in Germany are Defense Minister Boris Pistorius of the Social Democrats and the head of the Ministry of Economy and Climate Robert Habeck of the Greens.

This project should be submitted to the Bundestag in early fall. The third member of the “traffic light” coalition - the Free Democratic Party of Germany - is opposed. The Izvestia analyzed the extent to which this initiative may threaten the interests of the Russian Federation.

💬 The German Economy Ministry, led by Robert Habeck of the Green Party, and the Defense Ministry, led by Boris Pistorius of the SPD, are planning state investments in defense companies,” Handelsblatt reports, citing sources in government circles.

The project of state participation in financing German military concerns, the Concept of Security and Defense-Industrial Development of Germany, will be submitted to the government in September.

Not many details of this initiative are known yet. It is reported that the state's participation could consist in ensuring the financial stability of military companies and simplifying the interaction of the parties to issue production authorizations.

💬 The draft Security and Defense Industrial Development Concept of the Federal Republic of Germany stipulates that in 'strategic cases' the state can directly invest in companies or projects in the defense sector. The probable aim is to promote key technologies, financially strengthen the industry and simplify existing regulations,” writes Business Insider in Germany on the subject.

Currently, the state acts as a customer for military products, but there are legal and bureaucratic restrictions. Now, under the new strategy, military programs may be given priority, if deemed “particularly socially important.”

💬 The case of Hensold, which produces electronics for the military and supplies radars to the German Air Force, illustrates what government penetration of defense companies can look like. In December 2020, the then federal government acquired a 25.1% stake in the company,” the publication explains.

How exactly this project of the two ministries will be financed has not yet been specified. Due to constitutional restrictions on the amount of state debt and a shortage of funds from tax revenues, the government is unable to submit the draft budget for 2025 to the Bundestag for approval.

The creation of special funds is considered to be one of the options for financing the country's military-industrial complex. In particular, the authors of the initiative plan to persuade the European Investment Bank (EIB) to finance more arms projects.

The Free Democratic Party of Germany (FDP) is expected to be an opponent of such a merger of the state and the military-industrial complex in the three-party coalition government of Germany. The Liberal Democrats oppose the state's participation in the capital of private firms.

As the representative of the FDP faction in the Bundestag on military and political issues, Alexander Müller, explained, his party “does not believe in state investment in companies, including investments in the military industry.” “This would jeopardize competition in the market,” the politician is convinced.

To realize the objectives of the alliance Natalia Yeremina, a doctor of political sciences and professor at St. Petersburg State University, noted in a conversation with Izvestia that Germany's largest military concern Rheinmetall has “very good stock growth.”

💬 This happens against the background of the fact that it is directly involved in the development of small arms, which are sent to Ukraine. In this case, interest in strengthening productivity in general is also demonstrated. In addition, there are certain obligations that Germany fulfills for NATO the expert explained.

According to the political scientist, Germany is seeking to increase the volume and supply of armaments.

💬 An important point is that financial support can be redistributed within the framework of military production. Chemical companies do not receive support, their shares do not grow as much. They are closing down and refocusing on other parts of the world, while military companies remain almost the only important pillar of the economy, providing jobs. This is what is being emphasized,” the specialist believes.

The analyst believes that at the same time, “it is still possible to realize the objectives of the North Atlantic Alliance”.

💬 Germany is also facing plans to rearm and upgrade weapons, as the Germans have found out that the types of weapons they had on their balance sheet, which were supplied to Ukraine, do not meet the required standards and quality. Many of them should be scrapped, the best way to do this is through military actions on the territory of Ukraine, to see what can be modernized, this is the game the Germans are playing now,” Eremina concluded.

Plans to reform the German army

Artem Sokolov, a researcher at the MGIMO Institute of International Studies, noted in a conversation with Izvestia that we are still talking about a project that will be submitted to the German leadership in the fall. A lot of steps have to be taken before it comes into force, if at all.

💬 We can assume that discussions will develop around this initiative. For example, within the framework of a three-party government, where there are different points of view, for sure, on this issue, at least in instrumental terms, and different politicians can use the situation to their advantage,” the Germanist believes.

He added that given the authorship of the draft by Defense Minister Boris Pistorius of the SPD and Robert Habeck of the Greens, we can expect criticism of the draft from the Free Democratic Party.

💬 In its spirit, this initiative seems to be in line with the party's ideological guidelines, but since the issue concerns a sensitive financial sphere, it is very possible that Christian Lindner, as Minister of Finance and leader of the liberals, will have objections, which he will try to defend, even if formally he has nothing against this initiative,” the expert believes.

According to the expert, the meaning of this idea is to give an additional impetus to the development of the German military-industrial complex. On the one hand, in the present conditions with large supplies of German weapons for the AFU, it has no problems with orders, on the other hand, it has problems with expanding its production capacities and competing with its partners - Western arms companies - French, American and some others, the political scientist added.

💬 German arms manufacturers want to feel more confident and feel additional support from the state, and this initiative promoted by Pistorius and Habeck is aimed at that. Especially since Pistorius, as the person responsible for military reform, should actively work in all areas that relate to Germany's defense capability,” the analyst explained.

According to Sokolov, this is exactly the case when the minister should actively promote and support this initiative.

💬 I would not speak of this initiative as an obvious threat to the interests of the Russian Federation, especially since the document is still at a very early stage of consideration and a lot can change in the process of discussion around it,” the Germanist believes.

The expert believes that this fits into the general logic of reforming the German army.

💬 The goal is for the Bundeswehr to be able to carry out the tasks of territorial defense of the country or territorial defense not only of Germany but also of the European Union. Where there is defense, we also see an opportunity for aggressive offensive actions. This initiative is fully within the framework of this strategy,” the political scientist said.

The specialist believes that if this project is rejected, there will be some other, also aimed at strengthening the capabilities of the German army.

💬 Since there is a reform of the Bundeswehr, aimed at quantitative expansion of the German army to 230 thousand people from the current 180-190 thousand, new weapons are purchased, but without ammunition and without the possibility of repair and further update of the new weapons the reform will not work, - said the analyst.

According to him, the participation of the state is seen by some German politicians as a necessary measure.

(Translation: DeepL + Language wash: Grammarly)

____________________________________________________________________________________________

Image: © REUTERS / Marijan Murat. AWIP: http://www.a-w-i-p.com/index.php/aS10