Germany to Change Payment Scheme for Ukrainian Weapons after Coalition's Budget Compromise

Journalists have said following the coalition's new agreement on the budget for 2024, the German Bundeswehr will have to buy weapons to replace the ones supplied to Ukraine from a special army development fund, and not from a separate pool, as was initially planned.

As reported by Spiegel, a significant part of the weapons that Germany supplies to Ukraine as military aid is provided from the Bundeswehr's stockpiles. At first, the federal government promised that the money to buy new weapons to replace the ones transferred to Ukraine would be allocated from a special fund in the budget, not assigned to any specific ministry, in order to reduce the burden on the defence budget.

However, the "budget compromise" decided to back down from this: the agreement states that in the future, these funds should be provided from the Bundeswehr special €100 billion fund created in 2022 to strengthen the army.

An additional challenge is that these €100 billion have already been earmarked, so if the German Federal Ministry of Defence changes its approach, the spending plan must be changed, too.

Initially, the Bundeswehr special €100 billion fund was intended for large-scale army modernisation projects. The funds were calculated for the period until the end of 2027. If they are used to compensate for the weapons provided to Ukraine, the funds will run out faster.

Some politicians in the opposition Christian Democratic Union of Germany have criticised the news, saying it calls into question the government's priority for developing the Bundeswehr and that the armed forces' financial needs could increase even more in the future.

It was reported that the project to create the latest protection system against missiles and drones at close range may be five times more expensive than planned.

In November, Germany assured its allies of unchanged defence spending despite the budget crisis.