Fight for resources: Arms spending endangers our growth in prosperity!

Fight for resources: Arms spending endangers our growth in prosperity!

At the third trade union conference for peace in Salzgitter, Dierk Hirschel, Verdi's chief economist, made it clear that increasing military spending was not having the desired economic growth effect. According to Hirschel, military spending is simply “dead capital” and not productive investments that benefit society. For example, while the expansion of infrastructure such as road construction and daycare centers generates income in the future, military expenditure diverts valuable resources from productive areas, such as skilled workers and capital. This not only has an impact on the economy, but also promotes social struggles for distribution, especially in the welfare state sector, where the pressure to finance is constantly growing. A topic that is particularly explosive, especially when you consider that the current federal budget is 470 billion euros and the financing needs of the welfare state are becoming increasingly important.

Another of Hirschel's central concerns was to critically assess the arguments that are often put forward in favor of more defense spending. Many talk about the need to protect defense capability. But Ingar Solty, consultant for peace and security policy at the Rosa Luxemburg Foundation, contradicted the widespread assumption that there was a threat of a Russian attack on NATO countries. He described this fear as unfounded and pointed out that Russia had no interest in taking on NATO.

Military spending on the global agenda

The debate about increasing military spending has also intensified in Europe. Since the Russian attack on Ukraine in 2022, many governments in the EU have considered increasing their military budgets to reflect the growing threat situation. According to a report by the Stockholm International Peace Research Institute (SIPRI), global military spending grew significantly by 2024. The aim was to keep spending by EU countries just below the NATO target of 2 percent of gross domestic product (GDP).

• Die Militärausgaben haben sich von 2005 bis 2024 betrachtet kontinuierlich gesteigert.
• Die Dringlichkeit, die Verteidigungsfähigkeit in Europa zu verlängern, ist seit dem Ukraine-Konflikt gestiegen.
• US-Präsident Donald Trump hatte im Rahmen einer Diskussion sogar anregt, die Ausgaben auf 5 Prozent des BIP zu erhöhen.

The Kiel report highlights that an increase in military spending from 2 to 3.5 percent of GDP could generate private economic activity of a similar amount of up to 300 billion euros annually. This means that an increase in military spending of 1 percent of GDP could increase private sector productivity by 0.25 percentage points in the long run. But it's not that simple, as Ethan Ilzetzki from the London School of Economics warns of the risks that higher defense spending could bring to private consumption, especially if it is financed through higher taxes.

In summary, one thing is certain: While the political discussion about defense spending continues to be heated, the financial framework and its social impact should not be lost sight of. Investments in education, infrastructure and social security should therefore not be left behind, especially at a time when society is increasingly feeling the pressure to finance the welfare state. The appeal to decision-makers is clear: a sustainable approach to citizen security cannot only be conveyed through defense spending.