Many projects canceled: inflation eats up armament plans for the German armed forces

Many projects cancelled
Inflation eats up armaments plans for the Bundeswehr

100 billion euros are to improve the equipment of the Bundeswehr. But rising interest rates, the strong dollar and, above all, high inflation are causing the number of projects, jets and tanks to melt away.

According to media reports, the federal government must make significant cuts in the equipment offensive for the Bundeswehr. Many projects, especially for the naval and air forces, would have to be called off, reports the “Handelsblatt”, citing industry and politics. The reason is therefore above all the high inflation, which makes the planned purchases more expensive than expected.

New Eurofighters, new frigates and new self-propelled howitzers, which should be ordered to replace those delivered to Ukraine, as well as a third tranche of the corvette K130 are now on the brink. According to the report, however, the purchase of the F-35 fighter jet and the Chinook heavy transport helicopter are out of the question. The fighter jet is indispensable for Germany’s nuclear participation. However, the number of 35 could be reduced.

“As many projects run for five to seven years, inflation in the dimension creates a serious financial problem,” a person familiar with the proceedings is quoted as saying. In addition, the federal government calculated with a dollar exchange rate of 1.1 to the euro, a member of the governing coalition told the “Handelsblatt”. The strong dollar also makes imports from the USA more expensive.

Interest expenses more than doubled

In addition, there are the rising interest rates for the loans from the special fund – now seven instead of three billion euros are expected. The MP is also quoted as saying that the number of units in the second lot of the Puma infantry fighting vehicle, for which 304 million euros have been estimated this year, is also being reduced every week. From the point of view of the armaments industry, 200 billion would be necessary for the wishes of the Bundeswehr, as a manager calculated.

The Federal Court of Auditors had criticized the fact that the planned projects exceeded the 100 billion euro special fund. This is inadmissible because there is a risk that the Ministry of Defense will not be able to service obligations later from the special fund. The result would be additional burdens on the federal budget, as stated in the report available to the newspaper.

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