(Bloomberg) — German lawmakers paved the way for the creation of a special fund worth 100 billion euros ($107 billion) for additional military spending, part of a push by the government to transform the armed forces after years of underfunding.
Most Read from Bloomberg
Chancellor Olaf Scholzs ruling coalition needed the backing of the main opposition conservatives for the two-thirds majority needed to enshrine the fund in the countrys constitution. In a vote Friday in the Bundestag, or lower house of parliament, 567 lawmakers voted in favor of the constitutional change, with 96 against and 20 abstentions.
The new investment vehicle, which is not part of the regular budget and not subject to rules limiting net borrowing, will enable Germany to meet a NATO goal of spending 2% of gross domestic product on defense. It comes on top of annual defense spending of some 50 billion euros.
We can send a signal of unity today, to our troops, to our allies and to the people in our nation, Defense Minister Christine Lambrecht told lawmakers before the vote. We will meet our responsibility for security, and for peace, freedom and democracy.
Scholz announced the historic move to create the fund in a speech in parliament three days after Russia invaded Ukraine at the end of February. The outbreak of war in Europe forced his ruling coalition into a radical shift in defense policy, with the government also reversing a long-standing policy of not supplying weapons to combat zones.
A large chunk of the cash — about 41 billion euros — will be used to boost German air power. Lambrecht has already announced that Germany will buy 35 F-35 fighter jets, 15 Eurofighters and 60 Boeing Co. CH-47F Chinook helicopters.
Bundestag lawmakers also backed the legislation regulating the fund on Friday. Its due to get final approval from the upper house, where Germanys 16 states are represented, next Friday.
Its an historic day, because today we are agreeing on an upgrade package that has never existed in the history of the Bundeswehr, Lambrecht said.
A lot will change in the next weeks and months, because this has to be implemented now, it has to reach the troops very quickly and thats how its going to be, she said.
(Updates with final approval, defense minister quotes)
Most Read from Bloomberg Businessweek
2022 Bloomberg L.P.
