Putting Germany's Armed Forces in Private Hands

It seems that every half year or so, Germany’s military sends soldiers to a new part of the world to keep peace or help in a war against terrorism.

What began as missions in Bosnia and Kosovo, have now expanded to the not-so-secret combat deployment of Germany’s elite brigade in Eastern Afghanistan, UN peacekeepers in Kabul and a Navy presence outside the horn of Africa.

Not bad for a military operating on a shoestring budget.

But with no drastic budget increases in sight and ever more demands placed on the Bundeswehr, Defense Minister Rudolf Scharping is rapidly approaching a financial crisis.

No wonder, then, that Scharping has turned to the private sector. The "B" in Bundeswehr, it turns out, is starting to stand for "business".

This week, the general announced that the business of outfitting conscripts and soldiers in uniforms would be turned over to Lion Apparell Deutschland and Hellman Worldwide Logistics. The move is expected to save Germany’s armed forces 718 million euro over the next decade.

Privatize, privatize, privatize

The decision is one of the first steps of a 1999 plan to privatize the Bundeswehr’s non-military costs. Those include everything from the socks soldiers wear on the battlefield to the cars officers drive around on Germany’s military bases.

Under the plan, approved by both houses of Germany’s parliament, the Bundeswehr has set up private corporations in which they own a stake to manage the non-military side of the armed forces. The plan is expected to save 1 billion euro a year beginning in the next few years that can be reinvested in getting the equipment needed to maintain parity with the Germany’s allies, and Scharping has a long wish list.

"I think they were forced to do that, out of necessity, politically speaking" Heinz Schulte, a military analyst in Berlin told DW-WORLD.

Schulte calls the privatization a natural step in the increasing modernization of German society. The country’s railway system, post office and telephone company have been transferred from the government’s hands to the private sector in the past decade. It seems only logic that the military should follow, to a certain extent.

Dire straits

German armed forces are due to get around 24 billion euro from next year’s budget, said Schulte, far below that of Great Britain and the United States, and according to Defense Minister Scharping, tens of billions of euro below what is needed. Money for new projects, such as the 600 surface-to-air missiles and new mobile first-aid camp Scharping is expected to ask for at a budget meeting next week, is scarce.

Earlier this year Scharping had to strong-arm members of Parliament to put aside money for the purchase of new A400 military transport planes. The purchase, made in cooperation with eight European countries, is considered a vital first step in Europe’s goal of unifying its member states' military and security policies.

Scharping has earned disapproving looks from Germany’s allies for his difficulty in getting the project up and running, but Parliament has yet to authorize the money be spent.

"Officials have yet to find a solution to an equation in which the military’s size may be reduced, its range of tasks may be expanded, its current number of bases may be maintained and its budget may be continously cut," writes the Frankfurter Allgemeine Zeitung’s military correspondent Karl Feldmeyer.

Part of the plan a "total flop"

The privatization plan has already failed in at least one aspect, said military analyst Schulte. A plan to sell off prime real estate owned by the Bundeswehr in the middle of some German big cities fell through. The army failed to realize the city would want to cut in to the lucrative sale of the land to the developers.

An idea expected to reap billions has so far only earned the Bundeswehr 100 million euro, said Schulte. That’s roughly 47 million euro short of the money needed to complete just one aspect of the military reform – updating the Bundeswehr’s aging jet fighters.

"It was a total flop," Schulte said.

For now, Scharping will just have to tighten his army’s belt hope the privatization money starts coming in a little sooner. Any discussion on military budget increases and the reform the Bundeswehr needs will only take place after September’s elections, anyway.

And by that time Scharping and his boss, Chancellor Gerhard Schröder, might already be gone.