Germany drops legal commitment on Nato defence spending

Germany has quietly dropped plans to anchor Nato’s spending guidelines in national law, 18 months after promising a Zeitenwende, or watershed, in its approach to security and defence.

The news comes as Berlin has agreed to buy a €3.2 billion Arrow 3 hypersonic missile defence system, co-developed by Israeli Aerospace Industries and the US company Boeing.

The interceptor system can shoot down ballistic missiles above the Earth’s atmosphere with what its developers call a “hit-to-kill approach for incoming threats”.

Before a contract signing, Israel’s defence minister Yoav Gallant called the military deal “the largest in Israel’s history”.

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Mr Gallant said: “It is also particularly meaningful to every Jewish person, that Germany is acquiring Israeli defence capabilities.”

It remains to be seen who else will sell military equipment to Germany after Berlin walked back plans for a legislative commitment to defence spending.

For years Germany has come under fire from Nato allies – and successive US presidents – for failing to meet a Nato target to spend two per cent of gross domestic product annually on defence and security.

In February 2022, days after Russia invaded Ukraine, chancellor Olaf Scholz presented a €10 billion “special fund” to upgrade Germany’s military. In addition Berlin would, he said, “from now on invest more than two per cent of the GDP in defence, year-after-year”.

On Wednesday a pledge to meet that commitment was reportedly deleted at the last minute from the final budget finance bill that went before the federal cabinet.

Pledges to increase defence spending to the Nato minimum have proven unpopular in Mr Scholz’s Social Democratic Party and the Green Party, which controls the economic ministry and foreign office.

The latter reportedly intervened to delete the binding spending commitment, pointing to a recent national security document. Instead of annual spending targets, it promises to meet the two per cent target on average over a five-year period.

This shift has sparked concern among senior German military officials. As well as replacing old and defective equipment, they say a large spending commitment is required to replace the €5.4 billion worth of tanks, military equipment and ammunition Germany has passed on to Ukraine.

Last month Mr Scholz insisted that his promise to increase German defence spending was a firm and sustainable long-term commitment.

“Next year we want to reach this two per cent with budgetary means and the [€10 billion] special fund,” he said. “And that will remain, even after the special fund is exhausted.”