Committees approve the business plan for the special fund

Yesterday, Wednesday, the Budget Committee of the Bundestag discussed the draft law amending the Basic Law (Article 87) and the law establishing a "Bundeswehr Special Assets" (Bundeswehr Special Assets Act – BwSVerm), including the economic plan. Only an additional meeting in the evening led to approval of the – then unchanged – plan.

Already on May 29, the governing coalition and the CDU had agreed on the main features of the regulations on the special assets of the Bundeswehr, about which ESuTreported. In the course of the 3rd reading of the budget law on June 3rd, the two laws are now to be passed. A two-thirds majority in the Bundestag is required for the amendment to the Basic Law.

The draft of the economic plan for the Bundeswehr special fund (BwSVerm) has been circulating since Wednesday morning, in which the projects that are to be financed from the special fund are estimated. The draft contains the allocation of funds to project groups and not yet to individual projects. A chronological assignment has also not yet been made. Exceptions are the "start-up financing" with five or 10 million euros for the individual groups and the planned expenditure of 45 million euros for clothing. These 90 million euros are the only funds that can flow out this year.

Surprisingly, almost 500 million euros are earmarked for research, development and artificial intelligence (AI) in the BwSVerm. Topics are robust navigation and monitoring and securing large spaces using AI. In addition, significant development funds are included in the procurement titles. The most important are the Main Ground Combat System (MGCS) and the Future Combat Air System (FCAS)

The commitment appropriations for future financial years for five titles are summarized under Military Procurement.

With 40.9 billion euros, two fifths of the available funds are earmarked for the air dimension. Around one-fifth of the assets are earmarked for leadership and digitization at EUR 20.7 billion and for the lake dimension at EUR 19.3 billion. With 16.6 billion euros, just a third remains for the country dimension. Two percent of the assets, at 1.9 billion euros, are earmarked for cross-sectional clothing and personal equipment.

Bei der Bewertung der Zuordnung ist zu beachten, dass „Dimension Luft“ nicht gleichzusetzen ist mit „Luftwaffe“. Dieser Dimension sind unter anderem die P-8 Poseidon zugeordnet, die der Marine zuzurechnen ist, der Schwere Transporthubschrauber, der leichte Unterstützungshubschrauber und Heron TP, die Leistungen für das Heer erbringen. Die „Dimension Land“ profitiert von fast allen Beschaffungen für die „Dimension Führungsfähigkeit/Digitalisierung“.

A total of 38 projects (see table below) are listed, which are already in different stages of the procurement process. For example, the contracts have been concluded for clothing, submarines U212 CD, P-8 Poseidon. For most of the projects listed, documents justifying the procurement are being drawn up. Some selection decisions have been made and contract negotiations are being prepared or have begun. And there are – as described above – development projects among them.

Ammunition procurements are not included in the business plan. The financial requirement for this was estimated by various sources at around 20 billion euros. This requirement must be covered from the regular individual plan 14. A look at the projects listed in the BwSVerm shows that some of them were previously budgeted in the individual plan 14. This could have freed up financial volume to be able to procure ammunition.

The foreseeable term of the procurement contracts over several years is characteristic of all projects. The BwSVerm creates good conditions for this. The commitment authorizations approved by law are not limited in time. Issue remainders may be transferred indefinitely.

How long the special fund will be used can only be estimated once all projects have been signed and the delivery schedules and thus the accounting dates are known. For the heavy transport helicopters, for example, the delivery times are more than eleven years after the conclusion of the contract and for the submarines U-212 CD up to 2034. FCAS and MGCS may only go into production at that time. This results in a term of the special fund of at least eleven years with an average cash outflow of 9 billion euros per year. Since some projects will have shorter terms, a cash outflow of around 15 billion euros can be expected in the middle of the scope of the BwSVerm over a few years.

Individual plan 14 and the special fund should together achieve NATO's two percent target in the next few years. For 2022, the special fund will make practically no contribution to this. So it remains at the previously known 1.46 percent of GDP. For 2023, the medium-term financial plan of the federal government so far provides for a defense budget of 50.1 billion euros.

Table of projects (excerpt from the business plan)

Gerhard Heiming

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