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New German Defense Chief Calls for Military Spending Increases

Germany Must Spend More on Military, Incoming Defense Chief Says

(Bloomberg) -- Germany’s new defense minister said the country must boost defense spending and overhaul its military equipment, risking a fresh conflict in Chancellor Angela Merkel’s teetering coalition government.

Annegret Kramp-Karrenbauer, Merkel’s heir-apparent as leader of the Christian Democratic Union, said after her swearing-in that she’ll insist on “reliable and continuous increases,” and that Germany will achieve a NATO-endorsed goal of spending 2% of economic output in the longer term.

“If the military is to show the capabilities that we demand and expect of it, then the defense budget has to continue to rise,” Kramp-Karrenbauer said Wednesday after she was sworn in by a special meeting of the lower house of parliament. "I know that it’s not going to be easy to continue the efforts of recent years," she added.

Calls for increased military spending will please U.S. President Donald Trump, who has bluntly demanded that Germany meet the 2% benchmark. But Merkel’s government has ditched that target by the middle of the next decade, especially with the junior coalition partner, the Social Democrats, resisting increases.

Indeed, the SPD’s interim parliamentary caucus leader, Rolf Muetzenich, was quick to rebuff Kramp-Karrenbauer, saying the 45 billion-euro ($50 billion) German defense budget is a “huge amount of money” and comparing the NATO goal to a false idol, or “golden calf.”

“The Bundestag has the say over the budget, no alliance or international organization can assume that,” Muetzenich said.

AKK, as she is known, is betting that the defense ministry job will boost her bid to succeed Merkel, who said late last year she wouldn’t run for the country’s top job again. But it’s a high-risk gamble, as the position has killed many a politician’s ambitions and in government circles is known as a career cemetery. An exception was Ursula von der Leyen, who just became the European Union’s top executive, even though she scored low marks domestically on the job.

Since replacing Merkel as the head of the Christian Democratic Union, AKK has struggled to gain traction. She fumbled with overtures to the party’s right wing and saw a slide in the polls. As of May, Merkel had grown more determined to stay in office amid doubts that AKK was up to the job, according to party officials close to the chancellor.

Merkel last year conceded that Germany won’t meet the 2% goal by 2024, but retained the benchmark as a longer-term target. While outlays are due to increase by 6 billion euros to 45 billion euros in 2020, that is only 1.37% of GDP, little changed from this year, raising doubts about the 1.5% aim for 2024.

To contact the reporters on this story: Arne Delfs in Berlin at adelfs@bloomberg.net;Patrick Donahue in Berlin at pdonahue1@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Raymond Colitt, Iain Rogers

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