In the adjustment meeting on November 26th and 27th, 2020, the Budget Committee of the German Bundestag completed the preparations for the final readings of the law on the 2021 federal budget in the German Bundestag. The final requests from parliament and the government were incorporated into the draft in a meeting that lasted over 17 hours. According to this, expenditure will rise to 498.6 billion euros in the next financial year, of which 179.8 billion euros (36 percent) will be financed through loans.
Compared to the government draft, spending increases by 85.2 billion euros, but remains 1.9 percent below the estimate for the current financial year. The corona pandemic and measures to cope with it are leaving a clear mark on the household. On the one hand, income falls short of expectations. On the other hand, over 75 billion euros more were planned for Corona-induced expenses. This also includes some of the investments, which are growing to a record value of 61.9 billion euros.
As a result, the approved expenditure increased for almost all departments. The estimate for the Ministry of Defense for 2021 increased by 120 million euros to 49.93 billion euros, exceeding the previous year's approach by 1.3 billion euros. Additional funds were available for the procurement of ammunition (114 million euros), the Eurofighter weapon system (248 million euros) and the Eurodrone weapon system (232 million euros). Cuts were made in personnel expenditure (corona-related reduced demand) and through a global reduction in expenditure.
Regarding the now planned defense budget for 2021, the Ministry of Defense stated that a good deal of progress can be made in the areas of arms procurement and digitalization and that economic stimulus can be provided. With increases in almost all spending areas, the focus will be on implementing small and medium-volume projects - primarily for capability maintenance - and in particular on ensuring digitalization projects and soldiers' personal equipment.
“In addition to a large number of armament projects relevant to VJTF 2023, a large number of larger armament investment projects are also to be financed. First of all, major projects that have already begun should be continued (e.g. multi-purpose combat ship MKS 180 and AESA radar for the Eurofighter, replacement of Tranche 1 of the Eurofighter by aircraft from Tranche 4, multi-role frigate helicopters). In addition, there is the continuation of the German-French research activities on the Future Combat Aircraft System and the Main Ground Combat System, the German-Norwegian cooperation on the U212 Common Design submarine and missiles, the procurement of aircraft for the PEGASUS project, the Eurodrone and the replacement “The focus is on the Navy’s aging fleet service boats.”
The next steps for the budget law are the 2nd and 3rd readings in the Bundestag, which are on the agenda for the 50th calendar week (from December 8, 2020). As soon as the Bundestag has passed the law, it will be sent to the Bundesrat, which will deal with the federal budget on December 18, 2020. The Federal President is the final authority. With his signature, the law comes into force and can be published in the Federal Law Gazette.
Gerhard Heiming
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