Berlin lags on defence purchases after 100 billion euro pledge – sources

By Sabine Siebold

BERLIN (Reuters) – Germany is struggling to ramp up defence procurement or even just replace arms and munitions it has supplied to Kyiv, several sources told Reuters eight months after Chancellor Olaf Scholz pledged 100 billion euros to bring the military up to speed.

“There is almost no movement at all,” a source involved in German defence procurement procedures said on Thursday, adding very few orders had been placed so far.

The source was echoed by managers in the defence industry who expressed disappointment at what they see as the government’s sluggishness in replenishing the Bundeswehr’s inventories, caused by slow procedures and a lack of decisions at the top level.

“We would have expected to see many more orders by now,” one defence industry manager, speaking on condition of anonymity, told Reuters.

“There is a war raging in Ukraine but procedures here are still running in peace-time mode, while inflation is eating up the money,” another defence manager said.

NATO allies have criticised Berlin strongly in the past for not reaching the alliance’s 2% military spending target and relying on the United States for its security while not sharing the financial burden.

In a major policy shift days after Russia’s invasion of Ukraine in February, Scholz announced a 100 billion euro special fund to bring the Bundeswehr’s weapons and equipment back up to standard after decades of attrition following the end of the Cold War.

But the first source said defence procurement was not moving fast enough by far given the war in Ukraine and the deterioration of the security situation.

“Contracts for some ammunitions have been approved but that’s just a drop in the ocean compared to what we actually need,” the source noted.

Among other things, there has been no progress in efforts to replace 14 self-propelled howitzers and 13,500 rounds of artillery ammunition that Berlin supplied to Ukraine from Bundeswehr inventories, the person underscored.

“(Finance Minister Christian) Lindner hasn’t yet given the green light for the money to be spent,” the source said, pointing out that the replacement of equipment passed on to Kyiv was to be partially funded from the general budget, which is under Lindner’s control, rather than the defence budget.

The finance ministry did not immediately respond to a request for comment.

The problems do not only affect the replacement of military gear handed over to Kyiv, however. There is also a lack of progress in filling shortfalls that existed long before the war and which are seen as much more precarious now, the person said.

As examples, the source singled out the need for short-range air defence systems used to protect military convoys as well as for medium-range air defence systems such as IRIS-T SLM (NASDAQ:) which Berlin has supplied to Kyiv but not yet ordered for its own forces.

These projects will have to be paid from the 100 billion euro special fund which has only been tapped to a very small extent so far, the person said without giving exact figures.

One of the first major defence deals to be paid from the special fund will likely be the purchase of the U.S. fighter jet F-35 which is to be presented to parliament for approval before the end of the year, according to earlier information by the defence ministry.

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