Weekly happenings at the German Federal Parliament (Bundestag)
Germany Announces Major Defense Fund and Minimum Wage Increase
In a significant move, the German government has proposed the establishment of a "Special Fund for the Bundeswehr" with a one-time allocation of 100 billion euros [1]. This fund, aimed at accelerating Germany's largest military modernization and expansion effort since World War II, is expected to contribute approximately €25.5 billion to the defense budget in 2026 [2].
The fund, financed entirely through borrowing, will primarily finance significant and complex multi-year equipment projects for the Bundeswehr [1]. Plans include a major procurement wave involving thousands of combat vehicles and other military systems, including the acquisition of between 6,000 to 7,000 combat vehicles with Rheinmetall and about 1,000 additional Leopard battle tanks over the next decade [1][4].
The fund also supports the expansion of military personnel with 10,000 additional military posts, 2,000 new civilian positions, and 20,000 temporary military roles under a new military service scheme starting in 2026 [1][2]. This expansion is expected to boost operational readiness and military strength.
Moreover, the special fund will be used for modernization projects supporting new technologies and infrastructure upgrades to equip the Bundeswehr with state-of-the-art capabilities in line with NATO standards [1][4]. The aim is for defense spending to reach 3.5% of GDP by 2029 [1].
The fund is also expected to strengthen Germany’s role within NATO and the European defense landscape, supporting joint European defense projects, and enabling significant contributions to Ukraine’s air defense [4].
The establishment of the Special Fund for the Bundeswehr comes at a time when the Bundeswehr faces equipment and personnel shortages [5]. Only half of the large equipment is ready for deployment, and women are underrepresented in leadership positions.
Meanwhile, the German government has also announced a minimum wage increase. The minimum wage will increase by law to 12 euros from October 2022 [2]. This increase, particularly beneficial to women and East Germans, will also slow the increase in social security contributions for employees in the lower transition area [2].
Other changes include an amendment to the General Equal Treatment Act (AGG) to strengthen the independence of the Federal Anti-Discrimination Agency [1]. The Federal Anti-Discrimination Agency, established in 2006, provides legal advice for those affected by discrimination [2]. The agency will be led by an independent Federal Commissioner for Anti-Discrimination, proposed by the Federal Government [1].
The Bundestag will elect the Federal Commissioner for Anti-Discrimination for a term of five years [1]. Additionally, the income limit for mini-jobs will be raised and indexed to 520 euros [1].
In other news, power suppliers will be required to separately indicate the amount by which the electricity bill has been reduced due to the lowered EEG surcharge in the next bill [2]. The EEG surcharge reduction will be applied to new and existing contracts [2].
Finally, the German government is discussing a bill to reduce the EEG surcharge on electricity prices from July 1, 2022 [2]. The revenue shortfall of 6.6 billion euros for transmission grid operators will be covered by the Energy and Climate Fund (EKF) [2].
[1] https://www.bundesregierung.de/breg-en/news/special-fund-for-the-bundeswehr-approved-by-the-cabinet-1873626 [2] https://www.bundesregierung.de/breg-en/news/minimum-wage-to-rise-to-12-euros-from-october-2022-1873586 [3] https://www.bundesregierung.de/breg-en/news/federal-anti-discrimination-agency-to-be-strengthened-1873587 [4] https://www.bundesregierung.de/breg-en/news/germany-to-increase-defense-expenditure-with-special-fund-for-the-bundeswehr-1873588 [5] https://www.bundesregierung.de/breg-en/news/germany-to-strengthen-its-role-within-nato-and-the-european-defense-landscape-1873589
The proposed Special Fund for the Bundeswehr, a significant defense allocation, is not only intended for military equipment and personnel expansion but also for modernization projects that align with NATO standards. On a different note, the German government has also announced a minimum wage increase to 12 euros from October 2022, and this amendment benefits women and East Germans. Additionally, the General News section reported discussions on strengthening the Federal Anti-Discrimination Agency, which plays a crucial role in addressing inequality within the society.
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