The economist sees household politics as a "security risk for Europe"
Since the Fall of the Wall, Germany has been cutting defense spending. The head of the Kiel Institute for the World Economy therefore warns the German government: The Defense Ministry must be significantly increased to deter Putin with "Strength and Resoluteness". Savings must be made elsewhere.
The President of the Kiel Institute for the World Economy (IfW), Moritz Schularick, has urged the German government to significantly increase spending on security and defense. At the same time, he criticized the coalition's budget compromise. "The German government is currently making irrational fiscal policy for what the country needs," Schularick told T-Online. "Much more than that: Fiscal policy is and remains a security risk for Europe."
A future special fund for the Bundeswehr must be "significantly larger than the current one with its size of 100 billion Euros," the economist continued. "To close the budget gap in the next ten years, we are likely talking about a volume of 250 to 300 billion Euros."
And even then, it would be clear: "Even with all these additional expenditures, Germany would still be spending proportionally less for the military than countries like Poland, Norway, or the USA, which have not reduced their investments to the same extent in the past two decades." In total, spending of 3 to 3.5 percent of Gross Domestic Product would be needed now to deter Putin's Russia with "Strength and Resoluteness".
"Defensive capability significantly decreased"
According to IfW President Schularick, there is no way around making it clear to the population in the medium term: "Since the Fall of the Berlin Wall, we have drawn a large peace dividend - that's a mess, the money we have spent elsewhere. At the same time, our defensive capability has significantly decreased. Now is the time to save elsewhere. We can't afford everything anymore."
Previously, Schularick had already written in the "Frankfurter Allgemeine Zeitung" that "there is no doubt from an economic perspective that Europe could support Ukraine on its own. The EU's Gross Domestic Product is seven times, industrial value creation is five times higher than in Russia," the economist noted. However, he warned: "A Russian victory in Ukraine would not only irrevocably damage the credibility of the West in the world and immediately threaten the freedom of Europe. A Russian victory would make the current financial political debates obsolete, because the consequences would be many times more expensive."
- The head of the Kiel Institute for the World Economy, Moritz Schularick, has urged the German government to increase defense spending due to the ongoing tensions with Russia, specifically its attacks on Ukraine.
- Schularick criticized the German government's current fiscal policy, stating that it is irrational and a security risk for Europe, especially considering the Wars and Conflicts in the region.
- To deter Putin's Russia effectively, Schularick proposes a future special fund for the Bundeswehr, which should be significantly larger than the current one, likely amounting to 250 to 300 billion Euros.
- Despite these substantial increased investments, Germany would still spend less on its military than countries like Poland, Norway, or the USA, highlighting the need for stronger domestic policy on military expenditure.
