[Salon] German Foreign Policy: "Military states." (4/23/24.)

https://www.german-foreign-policy.com/news/detail/9537

Military states

The Western states and their allies - one-seventh of the world's population - account for around two-thirds of global military spending. Arms industry is gaining weight in Germany; economists predict "cannons without butter".

23 April 2024

Costs of militarization

The vast majority of the increasingly swelling global military spending is made by the Western states. This is the result of a study published yesterday Monday by the Stockholm Research Institute SIPRI. According to this, in 2023, around 37 percent of global military expenditure of 2.443 trillion US dollars - 916 billion US dollars - went back to the USA alone. According to SIPRI calculations, NATO members came together to 1.341 trillion US dollars - a good 55 percent of all military spending worldwide. 1] Europe, in turn, spent 24 percent of all funds invested in the respective national armed forces across the globe last year. Western and Central Europe alone put 407 billion US dollars into the military - a good third more than, for example, the People's Republic of China, whose military expenditure SIPRI estimates at a good 296 billion US dollars, including funds outside the official armed forces budget for 2023. In addition, there are countries closely allied with the West: Japan and South Korea, which rank 10th and 11th in the world ranking with military spending of 50.2 billion and 47.9 billion US dollars, respectively, or Australia, which ranks 13th with 32.3 billion US dollars.

In the ascent

Germany ranks seventh in the current SIPRI ranking - behind the USA, China, Russia (109 billion US dollars), India (83.6 billion US dollars), Saudi Arabia (75.8 billion US dollars) and Great Britain (74.9 billion US dollars). SIPRI estimates German military spending at around 66.8 billion US dollars - more than that of France (61.3 billion US dollars). In the future, they will continue to rise. According to the Federal Ministry of Defense, 19.8 billion euros will be added to the official military budget of 51.9 billion euros this year from the so-called special fund, which, in the opinion of the Federal Audit Office must be called "special debts." 2] This means that German military expenditure officially reaches 71.7 billion euros this year, although this does not yet correspond to the actual military expenditure: The amount that Berlin reports to NATO every year includes expenditure beyond the military budget and is therefore regularly above the official military budget. According to the current exchange rate, this alone amounts to 76.4 billion US dollars this year; this would put Germany in fifth place in the current world ranking ahead of Saudi Arabia.

Arms driver Europe

The driving role of the West and Europe in particular in global armament has been clearly visible for some time. For example, the military expenditure of the USA increased by 9.9 percent from 2014 to 2023, that of Germany by around 48 percent in the same period, those of Europe even by 62 percent according to SIPRI. European states also occupy an important position in the global arms trade. France was the second largest arms exporter in the world in the five years from 2019 to 2023; Germany, Italy, Great Britain and Spain followed in fifth to eighth place. Europe was also the only major region whose arms imports increased in the five-year period from 2019 to 2023, and this massively - by a remarkable 94 percent compared to the five-year period from 2014 to 2018. 3] In addition, in the years from 2019 to 2023, especially important allies of the West significantly increased the import of war equipment - South Korea (plus 6.5 percent), the Philippines (plus 105 percent) and Japan (plus 155 percent). According to SIPRI data, American and European gunsmiths are also clearly ahead in the order backlog, which in fact quantifies the armament of the next few years. 4]

The descent of the West

The Western states are forcing their rearmament at a time in which their economic influence is long since shrinking and is beginning to lead to a loss of political influence. While they still held a share of 56.36 percent of global economic output in 2000 - calculated according to purchasing power parity - this has fallen to currently only 40.62 percent and will continue to decline according to the forecast of the International Monetary Fund (IMF), while the share of the Global South is already at 59.38 percent and continues to rise. The G7, which see themselves as a "Steering Committee of World Politics", developed a weaker economic performance for the first time in 2021 - also calculated according to purchasing power parity - than the BRICS (30.7 percent vs. 31.5 percent) and have since fallen further and further back with great continuity, especially since the BRICS on the 1st January 2024 have expanded. The Banque de France sees the BRICS+ in 2027 at around 37.6 percent of global economic output, the G7 at only 28.2 percent. 5] The West's loss of political influence, in turn, is reflected, for example, in the fact that it still does not succeed in forcing the countries of the Global South to participate in the Russia sanctions. The loss of influence could possibly only be stopped by recourse to the military.

The weight of the weapons industry

Of course, the massive armament, which is required for this and is also being pushed forward decisively according to the SIPRI figures, also has an impact within the Western states. In the Federal Republic, for example, the arms industry was not one of the sectors with an outstanding position in the national economy for decades. This is starting to change in the meantime. In March last year, Rheinmetall, a first armaments company moved into the leading index DAX - a symbol of the growing influence of German weapons manufacturers. 6] Rheinmetall was able to increase its sales to 7.2 billion euros in 2023 and expects to be able to reach sales of 13 to 14 billion euros by 2026. This is still light years away from top companies such as Volkswagen with an annual turnover of 322 billion euros, but is approaching the first league of German industry in the future. Gradually, the political weight of the German arms industry is also growing with the economic.

Cannons without butter

At the same time, military spending is pushing back other items in the German state budget. With a share of 10.9 percent of the total federal budget, the Wehretat is currently the second largest budget item after the budget for work and social affairs. 7] However, this does not include the expenses to be made from the "special fund". If they are included, the military share is already around 15 percent. In the long run, this will be at the expense of civilian budget items. Recently, the president of the Ifo Institute, Clement Fuest, stated: "Cannons and butter - that would be nice if that were possible. But this is the land of the sham. That's not possible." Fuest predicted "cannons without butter." 8]

[1] Information here and in the following: Nan Tian, Diego Lopes da Silva, Xiao Liang, Lorenzo Scarazzato: Trends in World Military Expenditure, 2023. SIPRI Fact Sheet. Solna, April 2024.

[2] Pistorius in the Bundestag: "Security is not available at no cost". bmvg.de 01.02.2024. S. also "Make Germany fit for war".

[3], [4] S. on the arms driver Europe.

[5] Expansion of BRICS: what are the potential consequences for the global economy? banque-france.fr 13.02.2024.

[6] Rheinmetall rises in the DAX. tagesschau.de 04.03.2023. S. also battle tank instead of dialysis.

[7] Federal budget digital. bundeshaushalt.de.

[8] Raphaël Schmeller: Traffic light dismantles welfare state. young world 24.02.2024. S. also The Will to World War.