Germany's Rearmament, With Sophia Besch

LINDSAY:
Welcome to The President's Inbox, I'm Jim Lindsay, the Mary and David Boies distinguished senior fellow in U.S. Foreign Policy at the Council on Foreign Relations. This week's topic is Germany's rearmament. With me to discuss Germany's ambitious proposals to rebuild its military amid growing doubts on the continent about the U.S. commitment to NATO and European security is Sophia Besch. Sophia is a senior fellow in the Europe program at the Carnegie Endowment for International Peace, where she specializes in European defense policy. She was previously a senior research fellow at the Center for European Reform. Sophia has written for the Atlantic, Foreign Affairs, Foreign Policy and Politico among other outlets, and she has testified as an expert witness before the UK House of Commons, the German Bundestag, and the European Parliament. She recently co-authored a white paper for Carnegie titled, Who's Going to Unite Europe on Defense, and she contributed a chapter titled A Zeitenwende for Germany's Defense Industry to a monograph published by the Strategic Studies Institute at the U.S. Army War College. Sophia, thank you very much for joining me on The President's Inbox, and it sounds like you've been very busy.

BESCH:
Jim, thank you for having me back, and it's a busy time for all of us.

LINDSAY:
Well, I want to begin with the big picture here. Tell me how things look from Berlin, particularly with a new administration in the United States that is staffed with people who, shall I say, seem skeptical about America's security interests in Europe.

BESCH:
Yeah, thank you. Starting this broadly, I do believe that it's hard to overstate the significance of the new fiscal regime announcements that have come out of Berlin. I would probably call it a second Zeitenwende. Merz, the chancellor, the new chancellor, has toyed with the idea of an Epochenumbruch, but I'm not sure we can ask the world to learn another German abstract-

LINDSAY:
Well, you may want to tell people who missed the first Zeitenwende, what a Zeitenwende is.

BESCH:
It's a paradigm shift really, it was the response of the Scholz government to the Russian full scale invasion of Ukraine. And the idea really was that the world around Germany was changing, and that required Germans to rethink some core beliefs about armed conflict no longer being inherently futile, military power no longer being irrelevant, and security architecture in Europe no longer only being possible with Russia. And I think now we are at a point where there is another core belief, fundamental pillar of German defense policy, namely the relationship with the United States and U.S. support for European security that is being called into question, and Germany is responding to that.

LINDSAY:
So, help me understand how the Merz government actually looks at the steps that the Trump administration is proposing to take. And again, there have been a number of statements coming from Trump administration officials, the Signal chat that became public had JD Vance criticizing Europe and saying the United States once again was bailing out a freeloading Europe, and I believe the Secretary of Defense, Pete Hegseth, called European behavior pathetic. But give me a sense of how people in Berlin are interpreting all of this. How significant do they see the shift, and do they believe it's actually going to take place?

BESCH:
I think so, yes. I think the shift is seen as very significant. Certainly the new chancellor has gone very far in public remarks. He's publicly questioned the stability of Germany's alliance with America, he's publicly questioned whether the United States will remain a democracy. He's cast doubts whether NATO can continue to exist in its current form. In fact, he has said that he really does not believe that by the next NATO summit in June, the alliance will still exist in its current form. And so, you know, I think I've had some question marks from friends and colleagues, you know, we heard this whole Zeitenwende thing before, we had to learn all of this before, do they mean it this time?
And I think the sense in Germany is that the Americans mean at this time. And so, changes have to go much further than in previous years, because I do think it's important to say that even after Zeitenwende and the investments announcements, and the huge societal change that has happened, and I'm sure we'll talk about that, the assumption in Germany was still that we were spending on defense in order to keep America in, and we were involved in NATO in order to keep America engaged and involved. And so, with that seemingly no longer an option, at least not under this administration, that changes the whole outlook of German defense policy.

LINDSAY:
Well, let's talk about the broader public mood and how, in your estimation, ordinary, average Germans are thinking about this to the extent they're thinking about it all. I don't want to assume facts not in evidence, but I'd like to get a sense of just where is German public opinion?

BESCH:
Yeah, so it's really interesting. I think when we talk about whether or not Zeitenwende or this big shift was successful, there are two tales that you hear. One is that of analysts who look at the continued capability gaps, the lack of readiness of the German armed forces, really the huge investments that are still necessary. And then, you speak to Germans inside the country and I think a real shift has happened here. You know, Zeitenwende was always about more than just rearmament, it was a huge challenge to try and change out of a peacetime budget, a peacetime defense bureaucracy, and a peacetime mindset, and a lot has happened there. We went from a real ambivalence about the ethics of arms production, a really fraught relationship between German politics, business, society, Germany's defense sector, a real moral taboo associated with the defense sector, which had effects on the strengths and orientation of German defense industrial base, to now a process of cultural and societal normalization of German defense industry, of German rearmament, with substantial measures but also lots of symbolic successes.
One of them I will just mention is a football club now sponsored by Rheinmetall, unthinkable before, and still led to a public debate but it's happened. Another symbolic step, symbolic maybe for the future of the German economy is that the defense industry is now recruiting workers from the German automobile industry, the country's ailing flagship sector. So, the changes inside the country are real. It's hard for me to find any colleague, or friend, or family member in Germany that doesn't feel like we're in a very different place when it comes to defense than we were three years ago.

LINDSAY:
And so, how did this issue of defense play into the German elections in February? Obviously the traffic coalition government led by Olaf Scholz was really running on fumes toward the end, didn't seem terribly popular with the German public. Mr. Merz and the Christian Democrats came away sort of leading a new government. But to what extent did the German election reflect concerns about what was happening internationally versus what was happening at home?

BESCH:
Yeah. So, I think, you know, the Scholz government's history and legacy with defense, they would have never picked defense to be their legacy. It was a center-left green government, but you don't choose the history you're born into. I think two things happened after they decided to go ahead with the Zeitenwende project. One was that Ukraine resisted, and another one was that the U.S. stepped in Europe, and both of them took the steam out of the project, and that meant that things took a very long time to actually happen. And we had a year of activity, I would say, under Boris Pistorius, the defense minister. And then, the German constitutional court struck down the budgetary agreement in the last coalition, which meant they couldn't pay for anything, which really meant that it was just internal squabbling and not much happened.
And then the government was dissolved, we had early elections called, and to be honest, the election campaign looked to many of us here dangerously inward-looking, a real focus on the economy one, rightly so, you know, the German economic model is really under threat. And then two, migration. And that is largely because the terms of the debate were dictated by the far-right and the far-left parties that gained a lot of votes at the federal level and at the regional level as well. And so, defense and foreign policy actually didn't play a huge role. And then, the election outcomes had not even been, all the votes hadn't even been counted yet. And Merz came out in a big TV talk show on the eve of the elections and made these statements about the United States and the future of NATO, the future of us extended nuclear deterrence.
He wants to reach out to Paris and the UK about nuclear sharing in Europe, really surprising some who know him as a staunch transatlanticist. And I think what has happened is that he attended the Munich Security Conference, he was there for JD Vance's speech, and he, like many Germans, was really shaken by what he perceived as not just an America that no longer wanted to pay for European defense, but an America that felt antagonistic to what Europe in Merz's mind stands for.

LINDSAY:
Sophia, help me understand what it was about Vice President Vance's speech in Munich that so alarmed so many Germans, and I think actually offended so many Germans, if I can put it that way.

BESCH:
Yeah. I mean, the short version of that is that it was read as election interference. The vice president referred to the threat from within in Europe, and that threat from within for him was not Russian sabotage, or Chinese spying and economic investment, it was the restrictions on free speech, which in the vice president's mind are hindering and blocking far-right parties from entering into government. And specifically he was referring to the AFD, this was ahead of the German elections, and it really rubbed a lot of German politicians and the German public the wrong way. There's a huge taboo in Germany, the so-called firewall against working with the AFD, and-

LINDSAY:
And that reflects Germany's history.

BESCH:
That reflects Germany's history, absolutely. The AFD is not your average far-right party in Europe, they've made really almost no attempt to dress up as a mainstream party. They are on the German watch list, they have real neo-Nazi elements.

LINDSAY:
And I should say, for decades American governments applauded this firewall in German politics because of that history.

BESCH:
That's right. I will say, Jim, and I think it is important to have a nuanced conversation about this, I think there are people in Germany who are thinking about how center parties can work with the far-right, or can gain back the voters, I should say, can gain back the voters of the far-right. And whether we are playing into the hands of the party by supporting a narrative, their narrative of victimization basically, by excluding outright any conversation voting with this party on any issue. That is a conversation that is happening domestically in Germany, and I think it's right to happen and we'll see where that lands.
But for a U.S. vice president to interfere in this conversation the way that he did, I think that was seen as profoundly inappropriate and, you know, it had huge implications for how Germans understand this American administration's view of Europe as no longer an ally in the support of liberal democracy, but potentially an ally to other forces in Europe. You know, I've just published a paper with my colleague, Tara Varma, about a potential new transatlantic alliance, the alliance of revisionists here in the U.S. and between European far-right parties. So, it's a very different United States that JD Vance presented in Munich.

LINDSAY:
So, Chancellor Merz has committed himself to, we'll call it Zeitenwende two, Zeitenwende one, Olaf Scholz, that reflected the Russian invasion of Ukraine. Zeitenwende two reflects the calculation in Berlin that it's not the same United States anymore. So, what exactly is involved in Zeitenwende two? What is it that is significant? Is it simply a slogan, or has the chancellor taken steps to actually make this go from being rhetorical to real, Sophia?

BESCH:
Absolutely. So the chancellor, even before his new government has started, has launched a historic shift in German fiscal policy by reforming the debt brake when it comes to defense spending.

LINDSAY:
Okay, Sophia, you're going to have to explain to me what the debt brake is, because I think most Americans don't know what a debt brake is, and probably when they look at America's fiscal situation would think we could use a debt brake.

BESCH:
Right. So, I'll try to be as brief and clear as possible. The debt brake rule in Germany restricts annual structural deficits to 0.3, 0.5 percent of GDP. So, it's an austerity rule really. In the future, any defense spending and some security-related spending that exceeds one percent of GDP is going to be exempt from that debt brake, and that has the potential to unlock huge sums of money. The current German defense budget is around fifty-three billion euros. Currently, Germany only fulfills NATO's two percent target because the previous site then unlocked this one-hundred billion Euro special fund, that runs out by 2028. Currently, defense spending is around ninety billion. One percent of German GDP would be around forty-four billion euros.
So in the future, anything beyond this can be financed by loans. So, this new rule allows unlimited borrowing for defense spending. So any German government, this one successive governments could spend much more. They could spend three percent, four percent, ten percent if they wanted to for the first time since Cold War days, where I think West German spending peaked around three percent in the '70s. If the biggest economy in Europe today spends three percent of its GDP on defense, that's a hundred and twenty billion euros. If it's 3.5 percent, that's a hundred and fifty billion euros, so around a hundred and sixty billion dollars, that would make it the third-largest defense spender in the world. So this is huge, the money is there, and that's not everything. We can talk about all the other things that need to happen, but it's the sine qua non.

LINDSAY:
Yeah. I will underscore that the markets at least, reacted very positively to the repeal of the debt brake. A lot of money suddenly moved into Europe because investors see real potential growth in a continent, not just in Germany, but in a continent that has really suffered from either no growth or slow growth over recent years, Sophia. But I guess a question I have about Zeitenwende Two, if I can call it that, is, is it actually going to be sustained? Because I will note that the chancellor was able to get rid of the debt brake not by getting the new Bundestag to vote for it, but getting the lame duck Bundestag to vote for it, and that raises the question of whether he is going to face domestic headwinds in the new Bundestag toward actually making good on this promise to really revitalize, re-energize the German military.

BESCH:
Yeah, I think those are very fair questions. We don't even know to what extent this government is going to seize this opportunity, but will successive German governments build on it? I do believe that right now we have this support for changing the debt brake to an extent that was never there before. The reason it had to happen before the new Bundestag came into power was that the far right, the far left, and the German liberal party could have voted it down. And now that this constitutional change has happened, at least that is going to be ingrained for a while, but the German economy's ability to borrow to the extent that it is currently able to borrow is not necessarily going to be there in the future. And so, successive German governments will face questions of do you make cuts in other areas to sustain the kind of defense spending that this government might start now?
You know, only doing it with debt, you're very right, may become a domestic problem in the future. And I will note that, you know, Merz talks about this Zeitenwende using a slogan that will be very familiar to American voters. He has said that Germany is back, which is something that President Biden has said. And now indeed, President Trump has also said. I think that it is not really, it's maybe not the right phrasing for Germany because what is Germany returning to here? It's really charting new territory. And so, I think in order for successive governments to uphold these changes, there's still a case that German politicians, German military leaders have to make to the public and to the rest of Europe why they want to do this and why it needs to be sustained.

LINDSAY:
Well, let me ask you about that, Sophia. I understand that under Chancellor Merz, in essence, the tap is going to be turned on for military spending, but is there a strategic view of what they're going to use that money to buy? Is it going to be an all-German project? How does it fit in with the rest of Europe? I'd just love to sort of hear if there is in fact any white paper or plan for how they're going to proceed.

BESCH:
So, they're going to have to discuss this. I think it goes to the question of how Germany perceives of its role in Europe, because the country has often been accused of a lack of leadership. You know there's a rich discussion around the promise and peril of German leadership in Europe, this idea of the reluctant hegemon, something that you'll hear often in Europe is that Germany does not lead, it pursues its interests and as a function of its size and power this has a shaping effect. And in military policy that is now particularly relevant, there's no way around the German budget now or around the German geography. But I do think that German normalization, if you want to call it that, won't mean that the country becomes a France or a UK It's unlikely to provide the same kind of leadership. And so, when you ask German defense planners and military leaders how they would describe their vision for Germany's role in European defense, I mean, not to throw another German abstract noun at you, but they use the term anlehnungsmacht, which I struggle to translate, but I guess it's a power that you can lean on.
So, a pillar maybe, indispensable but not taking on a leadership role. And so, what they want is for Germany to become a central hub for NATO in Europe, anything that goes to the eastern front has to go through Germany, whether it's logistics, mobility, military mobility, transport routes. And then, of course there's the German permanent base in Lithuania now. But, you know, we can talk about the specific capability gaps and investments that are necessary, but I think in terms of how Germany perceives itself, the Eastern front, the threat from Russia is certainly the pacing threat, if you will. And then, integration of the German military and German logistics with the countries around it is the idea.
But there is no vision there yet. I think that has been often criticized by Paris, for instance, that Germany, even when it does do big projects like the European Sky Shield initiative under the last government, this does not amount to a vision for European defense. I think there can't be a German vision for European defense, there can only be a European vision. And in that sense, it is a good thing that Chancellor Merz brings in a fresh set of hands and can reset the relationship with Paris, can reset the relationship with Warsaw, and can hopefully come up with something to go on together with these other countries.

LINDSAY:
Well, let me ask you about those two bilateral relationships. As I think about it, Sophia, I have a very clear sense of what Paris hopes will happen, and that is Germany will support France's definition of strategic autonomy, which not surprisingly puts France at the forefront. I imagine flip side, if you go to Warsaw there's a whole different historical calculation that shapes things. So, how do you see those dynamics playing out?

BESCH:
Yeah, it is interesting. So as we've said, it is a bit surprising the statements that Merz has made, lots of observers were surprised by that. I think many would have expected the CDU to hold on to a more transatlantically oriented European defense. And I think there's still a sense in Germany that they want to not give up or give away anything that they don't have to. But it's notable that Boris Pistorius Berlin is part of the coalition of countries within NATO that are trying to design a gradual handover, if you will, of the U.S.'s role in supporting European security, trying to work with the United States, present to Washington a five to ten year plan of how Europeans can step up and fill in the capability gaps, the troops, potentially the nuclear deterrent, even though I think there's some question marks whether the U.S. would want that, and U.S. strategic leadership within the alliance.
And so, the fact that Germany is engaged in that shows that they have to an extent bought into what, you know, you say is the French idea of strategic autonomy, but what I do think is a much more widespread idea and sense in Europe now that Europe has to take on some responsibility for its own future. I mean, in a way the deal between the U.S. and Europe for decades has been European agency, European autonomy in exchange for U.S. protection. For the U.S., the deal has been, you know, U.S. primacy, U.S. influence in Europe in exchange for having to pay for European defense. And that was a good deal for both sides. The Europeans would love to hang on to it, but it doesn't seem possible with this government. And so, it is no longer just the French who think that, "Well, if the U.S. is retreating, then we also might as well retain some more, pursue some more autonomy over our own future."

LINDSAY:
And what about the perspective from Warsaw?

BESCH:
Yeah, there's a lot on the table there that I think there's a lot of potential in that relationship. There was lots of possibly unnecessary friction, understandable, historically grown, but really not constructive. This current government in Poland is much more open to repairing the relationship with Germany. Merz, I think is a Europeanist of the old guard, so he is instinctively more oriented toward Paris. But I hope that he has understood, I think most of his advisors have understood, that Franco-German leadership alone, European defense policy cannot build on that. It has to work for the east, and Poland obviously before these German announcements was one of the most important military spenders and armies in Europe.
And so, I do hope that there will be a reaching out from Berlin. I think it will happen, Merz has said he wants to go to Warsaw and Paris in the first days of his new government. There are some question marks that some of your listeners might have about how Poland feels about German rearmament historically, you could imagine that there are some doubts there, but Radek Sikorski, the current foreign minister and others have repeatedly said something along the lines of, "I don't fear German leadership, I fear German absence in Europe." And so, they are so far very encouraging. And this idea of Germany as a hub in the east, lean on power should work well also from the Polish perspective.

LINDSAY:
Yeah, I think from Warsaw's point of view their great concern is the threat that Russia presents. And obviously they're hoping that Berlin will see the threat in much the same way, and take the steps necessary to do so. That raises the question, Sophia, about how Germany would go about doing this. I have a lot of conversations with Americans here who've long held that the Europeans have freeloaded, it's time for the Europeans to basically belly up to the bar, open up their wallets and start spending. But what a lot of Americans have in mind is that the Europeans are going to buy American military products, and that's going to be good for the United States.
But I'm wondering if that really makes sense for Berlin as it sort of thinks about how it wishes to proceed if you're worried that the United States is not going to be there for you, or potentially worry that the United States may present a threat either to you or to your fellow European countries, and the topic of Greenland obviously comes to mind. It may not make sense to become more dependent upon the United States, especially when President Trump has talked about new generations of jet fighters that the United States will produce and we'll sell them to friends, partners and allies, but we won't give them sort of the top of the line version because they could be our enemy down the road. The flip side of that is Germany and Europe writ large has let its defense industrial base atrophy. So how is Germany, how is Berlin thinking about that challenge?

BESCH:
Yeah, I think you laid out the challenge very well, Jim. I think, you know, we've talked about the deal at the basis of the transatlantic security relationship, the defense industrial relationship was, as you know, always a very important underlying strand, the idea that Europeans would buy U.S. kit, U.S. weapons made sense for both sides, and helped I think, institutionalize and stabilize the defense relationship. Now, you could make the case, as you've just done, that no one has done more for the idea of Europeans buying European than President Trump, by casting real doubts over, in European leaders minds, over how much they can rely on U.S. kit. We've seen a conversation about whether it still makes sense to purchase F-35s, whether it still makes sense to go with Starlink, the Elon Musk satellite system, because Europeans are worried that there could be conditions and restraints, constraints on the use of these systems-

LINDSAY:
Or in a crisis, the United States turns the switch off.

BESCH:
Right, I mean its not, yeah. The kill switch to the extent it doesn't always exist to that extent, but these systems-

LINDSAY:
Or you don't get spare parts, supplies, maintenance, stuff like that.

BESCH:
Right. Spare parts, supplies, upgrades are necessary often, and if these upgrades don't happen then it's a bit like your iPhone, that if you don't update it just stops working well. And so yes, you need to trust your supplier in order to buy weapons from him. So, now Europeans do face this challenge of do they believe that the U.S. is still open and susceptible to the argument that, "We will buy your weapons systems if you don't abandon us"? There are some in this administration, there's certainly still a U.S. defense industrial lobby here in Washington that would support that. And Europeans, I believe will continue to try. I think that the pie has grown so large now, there's so much money now that they can try. They can hedge a little bit and do both.
It's also a reality that extracting European systems from the transatlantic defense industrial web is not as easy as that, takes a long time to, you know, replace the parts that are currently only made in the United States. And final point on this, I think the amount of money that is now being spent, the absorption capacity of the defense industrial base in Germany and in Europe just isn't there. All of this money cannot be spent just in Europe, Europeans will have to go to the global market. That can mean South Korea, or Japan, or Brazil, but also I think the United States. But the bottom line is that the promise of purchasing U.S. defense equipment, the promise of the last few decades, which means that you were implicitly also purchasing security guarantees, no longer seems to be there.

LINDSAY:
I want to come back to where we started, Sophia. Berlin is skeptical that the United States is going to be there for Germany or for NATO. That's the message that has come out of the Trump administration. Some interim defense guidance planning was leaked recently, and it has Pete Hegseth in essence saying the United States at a minimum is willing to assume risk in Europe and refocus toward Asia. Even putting aside the wisdom of that, there's obviously the hostility that shows up in many of the comments from Trump administration officials. So, I think it's safe to say that trust between Europe and the United States has been damaged. Can that trust be restored, or are we headed toward a divorce?

BESCH:
I think that trust can be restored, because trust is at an all time low right now. And if there was another administration in Washington in the future, that might change. If the U.S. was no longer perceived to be antagonistic to the liberal democratic project that European survival and the survival of the European political project relies and depends on, then trust can be restored. But that said, I don't think that we can go back to the transatlantic security relationship of the past, I don't think that Europeans will want to go back to basically outsourcing their defense and security to the United States, and they are right to do so, I think.
I think this goes beyond the politics and the ideology of this particular administration. There are structural trends in the United States that point to America wanting to focus less on Europe in the future, and I think that there is a generational shift in the U.S. that will make this shift sustain it. And so, I think that Europeans won't go back to the status quo ante, but they will want to go back to a trusting relationship with America, that is for sure.

LINDSAY:
So, I shouldn't read too much in the recent polls showing that Europeans don't really approve or much like the United States these days?

BESCH:
No, they don't. I mean, I think those polls are accurate. They don't approve or like the United States right now. We've had dips in the relationship before, and I do think that the particular personnel of this administration has a lot to do with those polls. And so, if we have elections that might change, but the conversation we're having is about security and defense, and I think the reeling from the abrupt changes and the dramatic shifts is going to leave a mark in the minds of European defense planners and they can't go back to a time before.

LINDSAY:
On that note, I'll close up this episode of The President's Inbox. My guest has been Sophia Besch, a senior fellow in the Europe program at the Carnegie Endowment for International Peace. Sophia, as always, it was a delight to chat.

BESCH:
Thank you, Jim.

LINDSAY:
Please subscribe to The President's Inbox on Apple Podcasts, YouTube, Spotify, or wherever you listen, and leave us a review. We love the feedback. The publications mentioned in this episode and a transcript of our conversation are available on the podcast page for The President's Inbox on cfr.org. As always, opinions expressed on The President's Inbox are solely those of the host or our guests, not of CFR, which takes no institutional positions on matters of policy. Today's episode was produced by Justin Schuster, with recording engineer Elijah Gonzalez, and director of podcasting, Gabrielle Sierra. This is Jim Lindsay, thanks for listening.