Arms procurement Pistorius Facing Criticism: Is Germany Re-arming Wrongly?

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How will deterrence and warfare work in the future? A leading economist has criticised the German Defence Minister, arguing that he is setting the wrong priorities in arms procurement.

In the view of the Kiel Institute for the World Economy (IfW), Defence Minister Boris Pistorius is focusing on the wrong areas in re-arming the Bundeswehr. Rather than investing in tanks, ships, and soldiers, more money must flow into drones, AI, and robotics, demands IfW President Moritz Schularick. The economist also calls for a central coordinator for military procurement within the Chancellery.

Schularick told the Süddeutsche Zeitung that instead of deliberately investing the €700 billion available by 2030 for the modernisation of the Bundeswehr into the weapon systems of the future, Pistorius is continuing to spend a large portion of the money on tanks, frigates, and other outdated technologies. As a result, the largely credit-financed multi-billion-euro programme—which, if used correctly, could also boost economic growth—threatens to largely fizzle out.

"We have a lot of capital, a lot of industrial know-how, and in some areas, we still have ultra-modern technologies," the IfW head said, looking at Germany's strengths. "What we do not have are hundreds of thousands of people who want to climb into tanks and drive to the front line. That means: wherever possible, we must rely on AI, robotics, drones, and satellite technology instead of more soldiers, more manned vehicles, and more barracks."

Schularick calls for a central procurement coordinator

In the economist's view, a single and moreover "very slow" ministry is overwhelmed with the reorganization of German and European defence strategy. Instead, someone is needed "who is equipped with political power, brings industry, start-ups, and ministries together, can clear away friction, and focuses everything on one goal."

With this, Schularick reinforces criticism that he and others formulated last year in a strategy paper for the Federal Ministry for Economic Affairs, which included former Telekom CEO René Obermann and retired Lieutenant General Jürgen-Joachim von Sandrart. Schularick now says he could imagine Obermann or former Airbus CEO Tom Enders as the armaments coordinator in the Chancellery.

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"Federal government and industry must adapt"

From Schularick's perspective, both the federal government and industry must completely change their approach to armaments procurement. Instead of ordering highly complex, custom-made tanks in small numbers or 200 anti-aircraft missiles, the focus must be on building up production capacities.

"To put it another way: we are no longer ordering the individual device, but the entire factory, which in an emergency can very quickly produce 2,000 instead of 200 missiles per year," Schularick said. Because maintaining such a factory does not pay off for a company in peacetime, the state must pay a premium for it.

Ministry of Defence rejects criticism

The Ministry of Defence stated that the discussion is noted, but misses the mark. The Bundeswehr must be ready to protect against a potential attack by 2029, a spokesperson said. However, it is clear that the latest innovations cannot be parked in the yard by then. This is a second step.

Furthermore, the Bundeswehr is procuring state-of-the-art weapon systems such as the F-35 stealth fighter. "That is high-tech warfare in the digital age," he said. Twenty billion euros alone will go into the digitalisation of the armed forces. Another 35 billion are to be spent on military infrastructure in space. Several billion are earmarked for kamikaze drones.

Tank steel or IT systems—or both in large numbers?

There are extensive considerations on how future warfare might be conducted and how deterrence and combat will function then. Military experts warn against viewing the combat operations along the bogged-down front lines in Ukraine as a blueprint.

"The drone war is a decisive factor in modern warfare, without question. But drones alone, and above all these simple drone systems, will not decide the war of the future," the Ministry of Defence spokesperson said in this regard.

However, that drones as well as the rapid acquisition and analysis of data are of central importance is undisputed. The question remains: will Artificial Intelligence and unmanned drones replace large weapon systems from frigates to missiles to main battle tanks, or primarily complement them?

Rheinmetall CEO Armin Papperger expressed scepticism last year in an interview with the Handelsblatt regarding a war-deciding role for drones. "The fact is also that the current war shows that wars are still fought with tanks and missiles. That will not change in the future," Papperger told the newspaper. "Currently there are a lot of these narratives claiming that the war of the future will be fought solely with drones. I think that is nonsense."