These days, I’m reminded of that hippie quote that made for a great bumper sticker on any early model Toyota Prius:
Granted, maybe it’s a bit long for a bumper sticker. Anyway, its point was proven yet again, when Chancellor Olaf Scholz upended Germany as we know it with his call for an immediate top up to the country’s military spending in the amount of €100 billion.
It’s easy to get millionen and millarden mixed up in German, but there was no confusion here. By almost any measure, it is a colossal sum of money.
How big?
Germany’s entire federal budget added up to a tick under €550 billion in 2021. Its defense ministry got about 9% of that, or nearly €47 billion, which is already high by recent historical standards. A supplemental €100 billion more than triples the budget almost overnight, giving the country’s no. 1 outlay — an array of social and welfare programs — a run for its money.
The proposed extra spending also trades in Germany’s tortoise toes for a pair of Usain Bolt Pumas, launching it past NATO’s 2% finish line, with a pledge to maintain that level of spending from now on. That means, among other things, Donald Trump is going to have to find something else to nag Germany about.
For weeks leading up to Russia’s invasion of Ukraine, Scholz said that Germany would do the “necessary things” when the time comes. That wasn’t good enough for the Twitterverse, who wanted specifics and were incredulous about the rhetorical opacity. If past is prologue, they could hardly be blamed. But as I wrote on these pages, whether it’s “strategic ambiguity” or his own brand of merkeln, you’re just not going to get a guy like Scholz to be any more concrete than that until absolutely necessary.
And then it became absolutely necessary. The decision to put Nord Stream 2’s regulatory approval on ice turned heads. The announcement to restore German military power overturned history. It’s hard to say whether Scholz’s address to the Bundestag shoved Germany into 21st century geopolitics or back to the 19th’s, but he definitely got it unstuck from those of the mid-20th, where the country has been cozily lodged, well, pretty much since.
A quick recap: This is the country that, until last week, saw itself with the “historic responsibility” to keep out of conflict, and those involving Russia in particular; that saw 5,000 helmets as a “strong symbol” of support to Ukraine; that spent the decade between the financial crisis and the pandemic forcing struggling members of the European Union to accept austerity, despite sound economic evidence to the contrary; that has under-invested not only in military kit, but in infrastructure across the board, from education to transport to technology; that has constitutional safeguards against spending too much; and whose chancellor said, when becoming the previous government’s finance minister in 2018, that the “good times are over,” only to oversee a continued boom in tax receipts at all levels of government.
Germany’s near pan-partisan penchant for fiscal conservatism can be borderline pathological. Its 40 million households have a combined €7 trillion in savings, and many would rather lose some of it to a bank’s negative interest rates than risk it in the stock market. Central bank estimates reveal that Germans keep a rather large amount of cash at home, and they’ve held onto their pre-euro currency, the deutsche mark, more than any other euro country has theirs — and can still spend it in certain shops.
None of this suggests an electorate eager for big policy shifts, let alone expensive ones. Yet an overwhelming majority has swung in sudden favor of Scholz’s move to add the equivalent of one-fifth of all federal spending to ensure that German warplanes can, among other things, reliably carry American nuclear weapons.
I’d say this is a neues Deutschland, if not for the communist connection to Neues Deutschland. At the very least it’s the “Zeitenwende” that Scholz anchored his government’s policy change to — a government, you will remember, made up of two parties — the Social Democrats and Greens — that view themselves as antiwar, anti-nuke and pro-disarmament, and a third — the Free Democrats — whose claim to fiscal prudence already succeeded in watering down much of the SPD and Greens’ progressive agenda and has threatened to torpedo what social, infrastructure and climate spending investments did make it into the final coalition agreement.
For all of Germany’s slow, technocratic pragmatism, Scholz’s spending spree reminds us that, even here, there’s always money in the banana stand. You just have to look behind the walls. We saw some of this during the pandemic, when the previous government shelled out billions to keep people and businesses afloat, not to mention comp tests and vaccines.
Whether Germany’s defense ministry is up to the task of responsibly spending €100 billion and what it’s going to spend it on remains unclear (one F-35 costs around $120 million, including parts and maintenance, and you’ll definitely want the extended warranty), but the bottom line is the money will be there. Less can be said for the plethora of other programs government repeatedly tells us it simply cannot afford.
And rightly so. This is a crisis, after all — the biggest Europe has seen since World War Two. It is hard to confront a dictator with expansionist desires if you don’t have a stick to shake at him. The problem is, as always, the crisis and the response to it are on incongruous timescales.
If turning a battleship takes time, building one from scratch takes even longer. It may take years to procure, deliver, train with and integrate whatever new gadgets — drones, jets, tanks, bionic troops (why not?) — the beefed up budget looks to buy. The only immediate change we might see is in weapons manufacturers’ share price and Ukraine’s territorial integrity.
Also a slow answer to Putin’s calling European security into question: the new LNG terminals that Scholz said he wants built, to make Germany less dependent on Russian energy. That is not only a long-term project, but a financially risky one, as the future profitability of gas is anything but certain. As it is, the industry is concerned about stranded assets in the amount of hundreds of billions of dollars due to abandonment of existing gas infrastructure.
As we know from yet another IPCC report, which happened to come out right after Scholz’s big day at the Bundestag, our future looks bleak even if we do manage to get through war in Ukraine without a nuclear exchange or radioactive release. Yet, aside from a half-sentence nod to clean hydrogen (NB: doesn’t exist yet), renewable energy did not get a single mention.
Until about two weeks ago, it was unthinkable that a German chancellor would receive roaring applause for a €100-billion military expansion. You know there’s a bug in the simulation when it remains unthinkable the say the same for solar panels and building insulation, even though the link between climate and security has never been clearer and more urgent.
This should be the Greens time to shine. In 2011, their allies in the Atomkraft? Nein, Danke movement had a meltdown over a freak accident caused by a perfect storm of geological events unique to where it happened — a half-a-world away. The tsunami of protest that resulted compelled Merkel’s second government to accelerate the closure of the country’s nuclear power plants, in a knee-jerk policy change that can only be described as an act of environmental populism.
The shortcomings of this decision have been evident for years, as Germany has routinely missed its climate targets by needing to rely more on coal and gas, the pollution from which is arguably deadlier than radioactive fallout from a nuclear accident, in the sense that the former will definitely and always happen, whereas the latter will not.
If only we could have known then that the very year set to turn out the lights of the last reactors would be the same in which Russia literally launched a petro-funded war. What fatal irony it would be should something go terribly wrong with any of Ukraine’s 15 nuclear reactors as the result of Russian aggression paid in part by Germany’s purchase of Russian gas, which it’s extra reliant since shutting down its own reactors out of fear of something going terribly wrong with them.
For a country that really dislikes risk, that’s a pretty lousy risk assessment.
Fukushima was able to very quickly change Merkel’s thinking on the nuclear issue, but a far more direct and real threat literally one country over has not moved the corresponding needle much. The Greens’ Robert Habeck, who runs the economics and climate ministry, has zero interest in flirting with nuclear power again (though by this point there’s so little left it really wouldn’t do much), but extending existing coal and developing new sources of gas are somehow palatable.
It seems the Realos really have vanquished the Fundis, at last.
True, Christian Lindner, the finance minister who seems lately to have woken up from a terrible night with the Ghost of Christmas Past, followed up Scholz’s performance with remarks of his own, in which he rebranded renewables as “freedom energy.” He later promised Habeck €200 billion for climate change initiatives between now and 2026. Good stuff that at least sounds like a lot, though it would have packed more punch coming from Scholz’s soapbox than during a TV interview with his chief federal accountant.
While Germans, both in polls and anecdotally, say they are ready to sacrifice some comfort to decouple from Russian fossil fuels, no one is asking them to put on a sweater and drop the thermostat a degree. And they are definitely not being asked to drive slower, as Greenpeace has suggested as a half-step towards reducing fuel consumption, which everyone knows will come to pass in Germany shortly after the United States bans private ownership of military-grade assault rifles.
With the Russia-friendly, peacenik SPD proposing military expansion, the environmentalist Greens considering coal and gas, and the liberal FDP agreeing to dole out the money, I suppose there’s some solace in seeing that German politics hasn’t become as intransigent as in some other, rustier democracies. Certain priorities may still need a bake sale to get done, but at least Germany’s military appears in good shape to confront the climate conflicts to come, even if it’s useless at deterring Russian aggression right now.