German lawmakers approve military spending splurge
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This comes on top of Germany's annual defence spending of some 50 billion euros.
PHOTO: REUTERS
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BERLIN (BLOOMBERG) - German lawmakers paved the way for the creation of a special fund worth US$107 billion (S$147 billion) for additional military spending, part of a push by the government to transform the armed forces after years of underfunding.
Chancellor Olaf Scholz's ruling coalition needed the backing of the main opposition conservatives for the two-thirds majority needed to enshrine the fund in the country's constitution.
In a vote on Friday (June 3) in the Bundestag, or lower house of Parliament, 567 lawmakers voted in favour of the constitutional change, with 96 against and 20 abstentions.
The new investment vehicle, which is not part of the regular budget and not subject to rules limiting net borrowing, will enable Germany to meet a North Atlantic Treaty Organisation goal of spending 2 per cent of gross domestic product on defence.
It comes on top of annual defence spending of some 50 billion euros.
"We can send a signal of unity today, to our troops, to our allies and to the people in our nation," Defence Minister Christine Lambrecht told lawmakers before the vote.
"We will meet our responsibility for security, and for peace, freedom and democracy." Mr Scholz announced the historic move to create the fund in a speech in parliament three days after Russia invaded Ukraine at the end of February.
The outbreak of war in Europe forced his ruling coalition into a radical shift in defence policy, with the government also reversing a long-standing policy of not supplying weapons to combat zones.
A large chunk of the cash - about €41 billion ($60.5 billion) - will be used to boost German air power.
Mr Lambrecht has already announced that Germany will buy 35 F-35 fighter jets, 15 Eurofighters and 60 Boeing Co CH-47F Chinook helicopters.
Bundestag lawmakers also backed the legislation regulating the fund on Friday.
It's due to get final approval from the upper house, where Germany's 16 states are represented, next Friday.
"It's an historic day, because today we are agreeing on an upgrade package that has never existed in the history of the Bundeswehr," Mr Lambrecht said.
"A lot will change in the next weeks and months, because this has to be implemented now, it has to reach the troops very quickly and that's how it's going to be," she said.
