times of fiscal retrenchment and economic crisis The case of Germany - - PowerPoint PPT Presentation

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times of fiscal retrenchment and economic crisis The case of Germany - - PowerPoint PPT Presentation

Nov 17, 2022 296 likes •499 views

Defense budgeting and defense policy in times of fiscal retrenchment and economic crisis The case of Germany Prof. Dr. Aurel Croissant Heidelberg University aurel.croissant@urz.uni-heidelberg.de Introduction Since the 1990s, Germany has

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Defense budgeting and defense policy in times of fiscal retrenchment and economic crisis – The case of Germany

  • Prof. Dr. Aurel Croissant

Heidelberg University

aurel.croissant@urz.uni-heidelberg.de

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Introduction

  • Since the 1990s, Germany has been accused by the United States and other

NATO countries of “free riding” in security terms

  • The German case is unique among democracies discussed today in that its

constitution outlaws war of aggression (Art. 26 GG).

  • Since 1994, Germany has had a marked presence in European Union (EU), NATO,

and UN endeavors (3,361 Bundeswehr forces deployed in 17 international missions and out-of-area operations, as of 20 March 2017).

  • Since unification in 1990, the Bundeswehr has been undergoing a breath-taking

reduction in force, re-orientation in missions outside of Central Europe. At the same time, Germany experienced defense retrenchment.

aurel.croissant@urz.uni-heidelberg.de 2

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Introduction cont’d

  • Yet, the election of Donald Trump as US President threatens to radically change

the parameters of German foreign policy that go back to the foundation of the Federal Republic in 1949.

  • Germany is particularly vulnerable to an abdication of U.S. “leadership” by

President Trump

aurel.croissant@urz.uni-heidelberg.de 3

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Organization

  • 1. Context and key actors in defense-policy making and implementation
  • 2. Defense budgeting
  • 3. Economic crisis and defense retrenchment
  • 4. Defense budgeting, financial retrenchment and military effectiveness
  • 5. Outlook: German Security and Foreign Policy after Obama

aurel.croissant@urz.uni-heidelberg.de 4

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  • 1. Context and key actors in defense-policy

making and implementation

  • Federal Government is responsible for foreign affairs and defense.
  • Strict separation of Bundeswehr and police.
  • Strongly decentralized security order and fragmentation of police and

intelligence services

  • Within the Federal Government, the Federal Chancellor (Bundeskanzler) on

paper holds a dominant position. Federal President is a marginal actor.

  • The Federal Foreign Office is responsible for coordinating foreign policy in

general and for security policy in particular.

› Usually, FFO, MOD and Chancellor do not belong to the same party (coalition cabinets)

aurel.croissant@urz.uni-heidelberg.de 5

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  • 1. Context and key actors cont’d
  • German Constitution makes a distinction between wartime and peacetime in

terms of the figure in command.

› The federal minister of defense commands the Bundeswehr in times of peace, while such command is transferred to the chancellor of the federal republic in the state of tension or defense.

  • The Federal MOD, as the default commander-in-chief, is advised by the

Generalinspekteur (Chief of Defense)

  • The most important body for federal-level political coordination is the Cabinet.

› Bundessicherheitsrat (Federal Security Council), Militärischer Führungsrat (Federal Armed Forces Defense Council) and Außenpolitischer Beauftragter (Foreign Policy Advsior) are NO NSC, Joint-Chief

  • f Staffs or National Security Advisor.

aurel.croissant@urz.uni-heidelberg.de 6

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  • 1. Context and key actors cont’d
  • The Bundestag (first chamber of legislature) possesses extraordinary authority in

respect to war powers – Bundeswehr as “parliamentary army” (FCC 1994)

  • While the Foreign Affairs Committee is the lead committee in preparing the

recommendation for a decision on a mission abroad, the vote of the Defense Committee has a critical role.

  • The Defense Committee also exercises oversight of the defense budget, military

procurement, and internal structural military affairs.

› BUT: parliamentary participation, not parliamentary decision about missions abroad › No minority cabinets – more important than executive-legislature relations is coalition politics.

aurel.croissant@urz.uni-heidelberg.de 7

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  • 2. Defense Budgeting
  • Germany is an example of a country with strong budget transparency

“Transparency of Defense Budget” report,

  • Defense budget (Departmental Budget 14) is part of the federal budget.
  • Federal budget: (a) Short-term budget plan; (b) Federal Financial Plan

› Short-term budget plan is passed as the Budget Act by the Bundestag (not Bundesrat)

  • Defense budget cycle involves four main steps:

› Preparation (Bundesregierung, MOD, MOF, collective decision-making). › Authorization (Bundestag) › Execution (MOD) › Control (Bundesrechnungshof)

Grundlagen der Vergleichenden Analyse politischer Systeme 8

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  • 2. Defense Budgeting cont’d
  • In general, the defense budget can be split into four parts:
  • 1. operating expenditure,
  • 2. defense investment expenditure,
  • 3. pensions and benefits expenditure for retired servicemen and women, as well

as retired civilian personal,

  • 4. expenditure for operator solutions.

aurel.croissant@urz.uni-heidelberg.de 9

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  • 2. Defense budget cont’d

SIPRI Military Expenditure database

aurel.croissant@urz.uni-heidelberg.de 10

0,0% 0,5% 1,0% 1,5% 2,0% 2,5% 3,0% 3,5% 4,0% 4,5% 5,0% 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Military Expenditure, Germany, 1988-2015

Military expenditure as percentage of gross domestic product Military expenditure as percentage of Government spending

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  • 2. Defense budget cont’d

aurel.croissant@urz.uni-heidelberg.de 11

10000 20000 30000 40000 50000 60000 70000 80000 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Germany's military expenditure, in constant (2014) US$ m, 1988-2015

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  • 2. Defense budget cont’d

aurel.croissant@urz.uni-heidelberg.de 12

Operating Expenditure Operator solutions Defense Investment Expenditure Maintenance & operating expenses Personnel

Quelle: BMF (Bayer 2016)

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  • 3. The impact of economic crisis on defense

retrenchment

Source: World Bank

aurel.croissant@urz.uni-heidelberg.de 13

  • 8
  • 6
  • 4
  • 2

2 4 6 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

GDP growth (annual %), Germany Share of population unemployed in Germany, 1970-2013

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  • 3. The impact of economic crisis on defense

retrenchment

aurel.croissant@urz.uni-heidelberg.de 14

Distribution of changes in spending on public goods and services

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  • 3. Impact of economic crises on defense

retrenchment

Defense spending as percentage of GDP, 1998-2011

aurel.croissant@urz.uni-heidelberg.de 15

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  • 3. Impact of economic crises cont’d

aurel.croissant@urz.uni-heidelberg.de 16

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  • 3. Impact of economic crises cont’d

Planned cuts in procurement programs (2011)

aurel.croissant@urz.uni-heidelberg.de 17

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  • 3. Defense budgeting, financial retrenchment &

military effectiveness

  • Since 1991, Germany’s security policy and defense institutions have seen fairly

breath-taking reductions in force and a re-orientation in missions out-of-area

  • Quasi-permanent process of transformation attained less than was desirable:

a) Germany has been slow to take care of the requirements of the post-Cold War security landscape b) Military leadership has not developed a successful recipe in order to overcome organizational persistence and bureaucratic difficulties c) Lack of an enlightened and informed public debate d) Set of restrictive domestic constraints

  • Remaining deficits:

a) Force structures b) Force levels and personnel structures c) Procurement

aurel.croissant@urz.uni-heidelberg.de 18

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  • 4. Germany’s Security and Foreign Policy in the

post-Obama era

  • The Trump administration threatens to radically change the parameters of

German foreign policy

  • German “free riding” in security and economic terms
  • Germany is more vulnerable than other European countries
  • Still still unclear how Germany will respond. For the moment, the policy seems to

be “wait and see” and “hope for the best”

  • The instinct of many Germans is to move ahead with the creation of a European

“defense union”. BUT:

a) Brexit b) French elections c) Germany as a “force for peace” and an export-oriented economic model.

aurel.croissant@urz.uni-heidelberg.de 19

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Thank you for your attention!!! Questions???

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