100 billion euros are to improve the equipment of the German armed forces. But rising interest rates, the strong dollar and, above all, high inflation are causing the number of projects, jets and tanks to melt away.
According to media reports, the German government will have to make significant cuts in the equipment offensive for the Bundeswehr. Many projects, especially for the naval and air forces, will have to be cancelled, reports the Handelsblatt, citing industry and politicians. According to the report, the main reason is high inflation, which is making the planned purchases more expensive than expected.
Among other things, new Eurofighters, new frigates and new self-propelled howitzers, which were to be ordered to replace those delivered to Ukraine, as well as a third tranche of the K130 corvette are now on the back burner. However, according to the report, the acquisition of the F-35 fighter jet and the Chinook heavy-lift transport helicopter are not in question. According to the report, the fighter jet is indispensable for Germany’s nuclear participation. However, the number of aircraft could be reduced from 35.
“Since many projects run over five to seven years, inflation in scale creates a serious financial problem,” a person familiar with the proceedings was quoted as saying. In addition, the federal government had calculated with a dollar exchange rate of 1.1 to the euro, a member of the governing coalition told Handelsblatt. The strong dollar makes imports from the USA even more expensive.
Added to this are the rising interest rates for the loans of the special assets – now seven billion euros are expected instead of the previous three billion. The number of units for the second batch of the Puma infantry fighting vehicle, for which 304 million euros had been budgeted this year, is therefore also being reduced on a weekly basis, the MP is quoted as saying. From the point of view of the defense industry, 200 billion would be needed to meet the wishes of the Bundeswehr, as one manager calculated.
Accordingly, the Federal Audit Office had criticized that the planned projects exceeded the 100 billion euros in special funds. This was inadmissible because there was a risk that the Ministry of Defense would not be able to meet its obligations from the special assets at a later date. The result would be additional burdens on the federal budget, according to the report, which is available to the newspaper.
News source NTV.de
