Germany's Military Procurement Criticized for Lack of Foresight

According to a report by Reference News Network on August 12, the director of the Kiel Institute for the World Economy, Moritz Schularick, accused Defense Minister Boris Pistorius of misplacing the focus of Germany's military investment. This top economist also called for the establishment of a central military procurement coordinator in the Chancellery.

In an interview with the Süddeutsche Zeitung, Schularick stated that Pistorius has not targeted the investment of the €700 billion allocated for the modernization of the Bundeswehr by 2030 towards future weapon systems, but instead has used most of the funds to procure tanks, frigates, and other outdated technologies. Schularick said that this plan, which primarily relies on loan financing, could stimulate economic growth if used properly, but now faces the risk of most funds being wasted.

He said, “We have a lot of capital and rich industrial expertise, and we still possess cutting-edge technology in certain areas, but what we lack is hundreds of thousands of people willing to sit in tanks and head to the front lines. This means we must rely as much as possible on artificial intelligence, robotics, drones, and satellite technology, rather than increasing the number of soldiers, manned vehicles, and barracks.”

The economist believes that a “highly inefficient” federal government department alone cannot handle the restructuring of Germany and Europe’s defense strategy. Instead, Germany needs someone “empowered politically, who can bring together industry, startups, and various federal government departments, eliminate friction, and concentrate all efforts on a single goal.” Schularick suggested that former Deutsche Telekom CEO René Obermann or former Airbus CEO Tom Enders could be considered for the position of central military procurement coordinator in the Chancellery.

Schularick believes that both the federal government and industry must fundamentally change their approach to military procurement. Simply pouring large amounts of money into replenishing the Bundeswehr's stockpiles is not enough. He said, “On the contrary, we must consider from the very beginning how the economic processes must be designed so that we can truly produce the required weapon systems quickly and in sufficient quantities when necessary.”

Therefore, the focus of procurement should not be on small batch orders of highly complex, customized tanks or 200 air defense missiles, but rather on establishing production capacity. Schularick said, “In other words, we are no longer procuring individual pieces of equipment, but rather ordering entire factories that can quickly achieve an annual production capacity of 2,000 missiles instead of 200 in emergencies.” Since operating such a factory during peacetime is unprofitable for companies, the state must pay subsidies for this. (Translated by Nie Litiao)