Moritz Schularick, president of the Kiel Institute for the World Economy (IfW), has criticized German Defense Minister Boris Pistorius for the current direction of military procurement, arguing that a significant portion of the planned 700 billion euros designated for Bundeswehr modernization through 2030 is being misallocated. According to Schularick, the government is prioritizing traditional hardware like tanks and frigates over the transformative technologies necessary for modern warfare.
The critique, as reported by Welt, suggests that the current procurement strategy risks rendering a massive, largely credit-financed investment program ineffective. Schularick contends that Germany’s defense focus should shift from traditional infantry and heavy machinery toward artificial intelligence, robotics, drone technology, and satellite capabilities. He argues that Germany faces a shortage of personnel willing to serve in traditional armored units, making a reliance on legacy systems a strategic mismatch for the country’s industrial and technological strengths.
The Case for a Centralized Procurement Coordinator
A central pillar of Schularick’s argument is that the current administrative structure of the German government is ill-equipped to handle the rapid evolution of defense requirements. He describes the existing ministry framework as “very slow” and overwhelmed by the complexities of modernizing the German and European defense strategies.
To address these inefficiencies, the IfW president has proposed the creation of a dedicated, powerful coordinator position within the Chancellery. This official would be tasked with bridging the gaps between the defense industry, emerging start-ups, and various government ministries. Schularick noted that individuals with high-level corporate experience, such as former Telekom CEO René Obermann or former Airbus chief Tom Enders, could possess the necessary expertise to navigate these bureaucratic friction points and focus resources on a singular strategic goal.
Moving from Individual Units to Industrial Capacity
Beyond the choice of technology, Schularick advocates for a fundamental shift in how the state interacts with the defense industry. He argues that the government should move away from ordering small quantities of highly complex, custom-made equipment. Instead, he proposes a model where the state secures the underlying production capacity—essentially “ordering the factory” rather than the individual device.
According to the Welt report, this approach would ensure that in the event of an emergency, the industry could rapidly scale production from hundreds of units to thousands. Because maintaining such excess production capacity is not inherently profitable for companies during peacetime, Schularick suggests that the state should provide financial premiums to industries to keep these lines ready. This strategy aims to turn the defense budget into a mechanism that, if managed correctly, could also stimulate broader economic growth.
Strategic Priorities in an Era of Technological Warfare
The debate highlights a growing tension between traditional defense spending and the requirements of 21st-century conflict. Schularick maintains that Germany possesses the capital and industrial know-how to lead in defense innovation, but that the current emphasis on traditional structures like barracks and manned vehicles ignores the reality of modern combat.
By shifting focus toward software-defined warfare and automated systems, the economist argues that Germany could better leverage its existing technological base. The central concern remains that without a radical overhaul of procurement philosophy, the significant financial commitment to the Bundeswehr will fail to produce the necessary defensive capabilities or the required industrial resilience for the future.
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