Germany could miss even reduced NATO defense spending goal: document

February 4, 2019

BERLIN (Reuters) – German Finance Minister Olaf Scholz has cast doubt over the government’s already watered down pledge to NATO allies of spending 1.5 percent of economic output on defense by 2024, a Finance Ministry document obtained by Reuters showed on Monday.

Germany is under pressure from the United States and other NATO members to increase its military spending to 2 percent of gross domestic product, in line with a target agreed by NATO members in 2014 and reaffirmed in subsequent years.

The government’s tax revenues are likely to rise less than expected in coming years due to a slowing economy which means that options for additional spending are exhausted, the 22-page ministry document said.

The document, prepared for Scholz to present to cabinet members, said the finance ministry had earmarked 7.3 billion euros ($8.34 billion) for additional defense and development aid spending until 2022.

However, it would require much higher spending to get close to the already reduced defense goal of 1.5 percent of GDP by 2024 as Chancellor Angela Merkel promised NATO allies last year, according to a separate graphic in the document.

Military spending is expected to rise to 1.3 percent of GDP this year from 1.2 percent in 2018. Even stabilizing spending at the current level would require the government to shift money out of other programs which could prove politically tricky.

(Reporting by Markus Wacket and Sabine Siebold; Writing by Michael Nienaber,)