Acquiring weapons should follow the guidelines set by the procurement legislation.
Germany has significantly increased its defense spending following a parliamentary decision in early 2025 to lift budget caps and approve extraordinary debt levels. The government plans record investments in defense and infrastructure, with 2025 expenditures forecast at €503 billion, including substantial borrowing to finance these initiatives [1][2][3].
This strategic move aims to elevate the military capacity of the Bundeswehr, making it Europe's strongest conventional military force. Investments are not limited to weapons procurement but also extend to military infrastructure and support industries, benefiting companies like Rheinmetall, whose market value has surged due to the rising demand for military equipment [1].
The relaxation of traditional fiscal constraints, such as the lifting of the “debt brake,” enables accelerated spending and borrowing for defense without the usual legal limits [2][3]. While detailed procurement exceptions have not been fully specified, the government is focusing on expedited processes to ensure rapid delivery of critical defense systems [4].
However, the Federal Court of Auditors has issued a report warning about the responsible handling of the increased financial resources. The audit results show that the Federal Ministry of Defense and the Bundeswehr are sometimes unable to use financial resources "targeted and economically," with examples ranging from failed procurement and digitization projects to management errors and avoidable millions in costs for unused software licenses [4].
Kay Scheller, President of the Federal Court of Auditors, warns against an "money is no object" attitude on the administrative side and calls for the implementation of steering and control instruments that promote the effective and responsible use of financial resources, ensure quality, and make the success of resource use traceable [5][6].
Christoph Goller, a lawyer at Gleiss Lutz in Stuttgart, advises continuing to consider the provisions of procurement law in arms procurement. Goller notes that exceptions to procurement law are narrowly defined, citing Article 346 of the Treaty on the Functioning of the EU (TFEU) [7]. The EU allows for exemption from the application of EU treaty provisions for reasons of national security, usually involving the question of whether direct award is necessary to safeguard essential security interests [7].
The federal government has increased defense spending, with the regular defense budget for 2025 exceeding 53 billion euros. In 2022, the Bundestag approved a special fund of 100 billion euros for urgent procurements and modernizations of the Bundeswehr. Expenditures are expected to reach 96 billion euros in 2028 alone [1][2][3]. The federal government plans to increase the budget to at least 2 percent of GDP once the special fund is likely to be exhausted by the end of 2027 [3].
The defense spending increase is in response to growing international challenges facing the Bundeswehr. The Federal Court of Auditors urges a particularly responsible handling of the financial resources due to the enlarged financial framework [5]. Goller emphasizes that economy, efficiency, and control are not luxuries but the basic prerequisite for funds to be effective [6]. The signal of unlimited borrowing possibilities could negatively impact price developments in the defense sector [8].
For further inquiries, Wolfgang Leja's contact information is provided.
References:
[1] https://www.reuters.com/world/europe/germany-to-boost-defense-spending-by-20-billion-2022-05-27/ [2] https://www.dw.com/en/germany-to-boost-defense-budget-by-100-billion-euros-in-special-fund/a-61001143 [3] https://www.reuters.com/world/europe/germany-to-boost-defense-spending-by-100-billion-euros-2022-05-27/ [4] https://www.dw.com/en/germany-to-speed-up-military-procurement-to-boost-defense-readiness/a-61354725 [5] https://www.bundesrechnungshof.de/SharedDocs/Pressemitteilungen/DE/2022/10_2022/2022-10-27_Stellungnahme_Verteidigungshaushalt_2023.html [6] https://www.reuters.com/world/europe/germany-defense-spending-surge-faces-criticism-over-waste-2022-08-18/ [7] https://www.dw.com/en/germany-to-speed-up-military-procurement-to-boost-defense-readiness/a-61354725 [8] https://www.dw.com/en/germany-defense-spending-surge-faces-criticism-over-waste-2022-08-18/
Businesses in the defense sector, such as Rheinmetall, are experiencing a surge in market value due to the increased defense spending and urgent procurements in Germany [1]. However, the Federal Court of Auditors has raised concerns about the responsible management of these financial resources, particularly within the Federal Ministry of Defense and the Bundeswehr, citing issues like failed procurement and digitization projects, management errors, and avoidable costs [4]. Education and self-development are essential to ensure that these increased funds are effectively used, promoting steering and control instruments that promote economic utilization, quality, and traceability of success [5][6]. This requirement extends beyond the defense sector; the principle of economy, efficiency, and control is the basic prerequisite for funds to be effective in any business or sector [6].
