1 00:00:03,480 --> 00:00:12,280 Speaker 1: From Bloomberg News and iHeartRadio. It's the big take. I'm Westkasova. Today, 2 00:00:12,520 --> 00:00:27,080 Speaker 1: Germany cautiously rebuilds its military. Many people in Germany are 3 00:00:27,200 --> 00:00:31,320 Speaker 1: wary of military force, and they're opposed to exporting German 4 00:00:31,360 --> 00:00:34,840 Speaker 1: made weapons to other countries. It's one of the long 5 00:00:34,960 --> 00:00:39,360 Speaker 1: lasting legacies of the nation's twentieth century history of aggression. 6 00:00:40,120 --> 00:00:43,479 Speaker 1: For decades, Germany has marked its leadership in Europe with 7 00:00:43,680 --> 00:00:47,720 Speaker 1: economic power, not military might. But the need to help 8 00:00:47,840 --> 00:00:52,639 Speaker 1: Ukraine defend itself against Russia led German Chancellor Olaf Schultz 9 00:00:52,680 --> 00:00:56,080 Speaker 1: to announce that Germany would reverse a ban on sending 10 00:00:56,080 --> 00:01:00,280 Speaker 1: weapons into war zones and spend an additional hundred billion 11 00:01:00,360 --> 00:01:05,440 Speaker 1: euros to upgrade the German military kin avafans of a 12 00:01:05,560 --> 00:01:11,160 Speaker 1: tiding Usland's Leifan biltz today. Bloomberg Senior editor Alan Crawford, 13 00:01:11,480 --> 00:01:15,080 Speaker 1: when I visited this region, the Ukrainian troops were just 14 00:01:15,240 --> 00:01:17,120 Speaker 1: up the road and they were being trained on the 15 00:01:17,280 --> 00:01:22,240 Speaker 1: Deliverer two tank explains how Germany's pushed to supply tanks 16 00:01:22,240 --> 00:01:25,480 Speaker 1: and other heavy equipment to Ukraine has caused a boom 17 00:01:25,520 --> 00:01:29,800 Speaker 1: in the country's defense industry, but divided the public and 18 00:01:29,959 --> 00:01:33,679 Speaker 1: later in the show Doctor Bastian Giegrek. I think Germany's 19 00:01:33,720 --> 00:01:37,200 Speaker 1: neighbors are not really worried about a Germany that is 20 00:01:38,040 --> 00:01:41,600 Speaker 1: strong in NATO. I think they're worried about a Germany 21 00:01:41,600 --> 00:01:44,880 Speaker 1: that is weak in NATO. He's a military analyst who 22 00:01:45,000 --> 00:01:48,280 Speaker 1: argues Germany needs to do even more to prepare for 23 00:01:48,320 --> 00:01:54,720 Speaker 1: threats today and in the future. Allen, in a story 24 00:01:54,760 --> 00:01:57,760 Speaker 1: you've written for Business Week, you write how for many 25 00:01:57,840 --> 00:02:02,000 Speaker 1: years Germany had avoided building up it's military. Can you 26 00:02:02,040 --> 00:02:05,240 Speaker 1: just remind us of the history here? Well, Plenty has 27 00:02:05,280 --> 00:02:08,640 Speaker 1: been written about the fact that the bundeswere the German 28 00:02:08,760 --> 00:02:13,440 Speaker 1: armed forces have been underfunded for decades, and that they're 29 00:02:13,480 --> 00:02:18,239 Speaker 1: in severe difficulty. They're really struggling to try and help Ukraine. 30 00:02:18,720 --> 00:02:22,000 Speaker 1: It's actually one of the fascinating aspects of researching this 31 00:02:22,200 --> 00:02:26,760 Speaker 1: article that I hadn't appreciated that. On the one hand, 32 00:02:26,919 --> 00:02:31,760 Speaker 1: immediately in the wake of World War Two, then understandably 33 00:02:31,880 --> 00:02:35,760 Speaker 1: there was no German army. It had been soundly defeated, 34 00:02:36,320 --> 00:02:40,560 Speaker 1: and even there were suspicion of any personnel that were 35 00:02:40,560 --> 00:02:44,680 Speaker 1: remaining in the ashes of World War Two. Then Germany 36 00:02:44,880 --> 00:02:49,520 Speaker 1: it wrote a new constitution, which was it enshrined a 37 00:02:49,639 --> 00:02:55,799 Speaker 1: pacifist attitude in this constitution, but very rapidly politics got 38 00:02:55,840 --> 00:02:59,240 Speaker 1: in the way. Because of the Cold War, the onset 39 00:02:59,280 --> 00:03:02,239 Speaker 1: of the Cold War, or then what was called the Bundeswair, 40 00:03:02,360 --> 00:03:06,120 Speaker 1: the German Armed Forces were recreated effectively by the US 41 00:03:06,200 --> 00:03:10,639 Speaker 1: and by the UK, by the victorious Allied powers, and 42 00:03:10,800 --> 00:03:13,560 Speaker 1: it was allowed to come into being as a bulwark 43 00:03:13,760 --> 00:03:17,600 Speaker 1: against the East, against the Iron Curtain, and at its height, 44 00:03:17,760 --> 00:03:20,160 Speaker 1: at its peak in the nineteen seventies, there were half 45 00:03:20,160 --> 00:03:24,800 Speaker 1: a million military personnel German Armed Forces and did something 46 00:03:24,840 --> 00:03:27,480 Speaker 1: like seven thousand battle tanks. I mean, it was a 47 00:03:27,560 --> 00:03:32,679 Speaker 1: huge force, all arrayed along the East German border. But 48 00:03:32,720 --> 00:03:36,120 Speaker 1: then with the collapse of the Soviet Union and with 49 00:03:36,320 --> 00:03:38,880 Speaker 1: the followed the Berlin Wall in nineteen eighty nine and 50 00:03:38,960 --> 00:03:42,640 Speaker 1: then German reunification the following year, there was suddenly no 51 00:03:42,760 --> 00:03:46,080 Speaker 1: need for these armed forces, so they were all decimated. 52 00:03:46,560 --> 00:03:50,440 Speaker 1: And ever since then Germany has had a kind of 53 00:03:50,520 --> 00:03:56,080 Speaker 1: mixture of this deep reticence because of its wartime crimes 54 00:03:56,120 --> 00:04:00,240 Speaker 1: of really stepping up in military terms. It's been very 55 00:04:00,320 --> 00:04:04,119 Speaker 1: wary of arms exports and frankly it's just been very 56 00:04:04,400 --> 00:04:08,200 Speaker 1: reticent about throwing its weight about and now it's suddenly 57 00:04:08,200 --> 00:04:11,000 Speaker 1: being asked to do exactly that. And the start of 58 00:04:11,040 --> 00:04:14,920 Speaker 1: that was a big speech that Germany's Chancellor, all Aft 59 00:04:14,920 --> 00:04:19,039 Speaker 1: Shaws gave and he announced this rapid military builder. What 60 00:04:19,080 --> 00:04:22,440 Speaker 1: did he say in that speech? Three days after the 61 00:04:22,520 --> 00:04:26,360 Speaker 1: Russian invasion, So February the twenty seventh, twenty twenty two, 62 00:04:27,000 --> 00:04:30,960 Speaker 1: he appeared before an emergency session of the Bundestag, the 63 00:04:30,960 --> 00:04:35,039 Speaker 1: German parliament, and he announced what he called in at 64 00:04:35,120 --> 00:04:38,120 Speaker 1: sight in vendor, which is the German word which is 65 00:04:38,200 --> 00:04:41,360 Speaker 1: kind of not that easy to translate, but it's effectively 66 00:04:41,680 --> 00:04:46,240 Speaker 1: something like a historic change or shift in German policy. Yeah, 67 00:04:46,240 --> 00:04:50,960 Speaker 1: that's why potent in Land's products alot of patidisa. And 68 00:04:51,240 --> 00:04:55,040 Speaker 1: that meant that from now on, he said that Germany 69 00:04:55,240 --> 00:04:59,840 Speaker 1: would meet NATO's target of spending two percent of the 70 00:05:00,120 --> 00:05:04,920 Speaker 1: economic output on defense. He was overturning a long standing 71 00:05:05,040 --> 00:05:09,840 Speaker 1: ban on Germany supplying weapons into conflict zones. That was 72 00:05:09,920 --> 00:05:12,400 Speaker 1: so that he could allow Germany to send weapon right 73 00:05:12,440 --> 00:05:16,760 Speaker 1: into help Ukraine. And he announced a one hundred bullion 74 00:05:16,880 --> 00:05:21,200 Speaker 1: euros special fund for defense purchases to re equip the boondersware. 75 00:05:21,480 --> 00:05:25,799 Speaker 1: So that was momentous and healed at the time as historic, 76 00:05:25,920 --> 00:05:30,560 Speaker 1: but subsequently he's commander criticism for it actually not quite 77 00:05:30,640 --> 00:05:33,440 Speaker 1: meeting those targets. But to be fair, I think it's 78 00:05:33,480 --> 00:05:36,240 Speaker 1: also a reflection of the fact that it's a difficult 79 00:05:36,640 --> 00:05:39,479 Speaker 1: decision for Germany. It's like the tanker that you can't 80 00:05:39,560 --> 00:05:42,599 Speaker 1: turn it around very rapidly. A lot of this money 81 00:05:42,720 --> 00:05:46,000 Speaker 1: isn't we're only now seeing that it's starting to be spent. 82 00:05:47,720 --> 00:05:52,480 Speaker 1: Ellen exactly what are the details of Shows's plan. Germany 83 00:05:52,560 --> 00:05:57,280 Speaker 1: has Commander constant pressure to increase both the scale of 84 00:05:57,400 --> 00:06:00,800 Speaker 1: what it's delivering to Ukraine and the hotency. You know, 85 00:06:00,920 --> 00:06:03,880 Speaker 1: the heavy weapon rate is what we're now talking about. 86 00:06:03,960 --> 00:06:07,640 Speaker 1: At the beginning, it was Germany famously supplied five thousand 87 00:06:07,760 --> 00:06:10,800 Speaker 1: helmets and thought that that was enough. They've already lodged 88 00:06:10,839 --> 00:06:14,400 Speaker 1: an order for IF thirty five aircraft from the US, 89 00:06:14,480 --> 00:06:17,560 Speaker 1: of course, but they are also putting money into the 90 00:06:17,640 --> 00:06:21,640 Speaker 1: German defense industry, so something like a third of that 91 00:06:21,880 --> 00:06:25,880 Speaker 1: amount the government has said will be put into ammunition alone. 92 00:06:26,279 --> 00:06:31,080 Speaker 1: They're also investing in these self propelled howitzers, which has 93 00:06:31,080 --> 00:06:35,279 Speaker 1: got the wonderful German name Pansa Hulbitzit's five thousand, which 94 00:06:35,400 --> 00:06:38,800 Speaker 1: is the p z H two thousand, which is a 95 00:06:38,960 --> 00:06:43,440 Speaker 1: massive gun on wheels that they're buying several of those, 96 00:06:43,920 --> 00:06:48,279 Speaker 1: both to replace items that they've already supplied to Ukraine 97 00:06:48,680 --> 00:06:52,400 Speaker 1: and to build out the bundesware. They're buying high performance 98 00:06:52,600 --> 00:06:56,039 Speaker 1: radar equipment made by this company hence Old, and they're 99 00:06:56,080 --> 00:06:59,840 Speaker 1: buying this missile defense system this Irish tea, which is 100 00:07:00,080 --> 00:07:03,120 Speaker 1: made in this small town in the south of Germany 101 00:07:03,200 --> 00:07:06,680 Speaker 1: on the banks of Lake Constance called uber Lingen, but 102 00:07:06,960 --> 00:07:11,000 Speaker 1: have actually come under criticism for not placing orders fast enough. 103 00:07:11,280 --> 00:07:14,000 Speaker 1: But those were actually starting to see those come through now, 104 00:07:14,160 --> 00:07:16,720 Speaker 1: so it's you know that by no means spent all 105 00:07:16,760 --> 00:07:18,280 Speaker 1: of this money, and I think we'll see a lot 106 00:07:18,360 --> 00:07:22,840 Speaker 1: more orders coming in rapidly. In January, German Chancellor Shows 107 00:07:22,960 --> 00:07:26,760 Speaker 1: spoke to Bloomberg editor in chief Johan milcos Way about 108 00:07:26,840 --> 00:07:30,080 Speaker 1: all these weapons systems. I think, after the United States, 109 00:07:30,160 --> 00:07:32,280 Speaker 1: it is Germany and the UK that are delivering the 110 00:07:32,400 --> 00:07:35,160 Speaker 1: most weapons to Ukraine, and we will continue to do so. 111 00:07:36,120 --> 00:07:39,280 Speaker 1: As you know, we are absolutely active in doing the 112 00:07:39,440 --> 00:07:44,160 Speaker 1: real hard stuff, and this is the case with all 113 00:07:44,200 --> 00:07:49,160 Speaker 1: the artillery we delivered with our howar's this is what 114 00:07:49,400 --> 00:07:52,080 Speaker 1: we did together with United States and UK when we 115 00:07:52,240 --> 00:07:56,720 Speaker 1: delivered multi rocket launchers. It is what no one else did. 116 00:07:57,320 --> 00:07:59,760 Speaker 1: And we are doing a lot in the question of 117 00:08:00,160 --> 00:08:05,000 Speaker 1: defense with our Gappa tanks, with what we did with 118 00:08:05,240 --> 00:08:08,360 Speaker 1: this Irish tea system that is now so successful that 119 00:08:08,520 --> 00:08:10,760 Speaker 1: the whole world is looking at it because it seems 120 00:08:10,800 --> 00:08:14,280 Speaker 1: to be nearly one hundred percent effective in fighting against 121 00:08:14,400 --> 00:08:21,760 Speaker 1: the sides. Since Russia's invasion of Ukraine, you have seen 122 00:08:21,880 --> 00:08:26,880 Speaker 1: these calls for Germany to step up production and export 123 00:08:26,960 --> 00:08:32,120 Speaker 1: of arms to help Ukraine, and in particular Germany's Leopard 124 00:08:32,200 --> 00:08:35,280 Speaker 1: two tanks. Can you talk about the significance of this 125 00:08:35,520 --> 00:08:40,560 Speaker 1: tank and why it is so important now? Yes, I mean, frankly, 126 00:08:40,640 --> 00:08:44,719 Speaker 1: the Leopard two tank in its latest iteration, it's the 127 00:08:44,840 --> 00:08:50,360 Speaker 1: world's most commercially successful battle tank. Peaks on Germany from Poland, 128 00:08:50,440 --> 00:08:53,000 Speaker 1: from other countries in Europe because they can't send the 129 00:08:53,080 --> 00:08:55,400 Speaker 1: Leopard tanks that they have in their stores until Germany 130 00:08:55,679 --> 00:08:58,040 Speaker 1: gives them the right to do so under re export law, 131 00:08:58,160 --> 00:09:00,160 Speaker 1: So they're sitting there they wanted to go there. There 132 00:09:00,200 --> 00:09:04,800 Speaker 1: are only two Western tanks which have been in production 133 00:09:05,120 --> 00:09:08,640 Speaker 1: continuously for the past almost half a century. That's the 134 00:09:09,000 --> 00:09:13,280 Speaker 1: German Leopard two and the US M one Abrahams tank, 135 00:09:14,360 --> 00:09:18,199 Speaker 1: but the Leopard two is far more widely adopted. Most 136 00:09:18,240 --> 00:09:20,640 Speaker 1: of the US Abrahams tanks are actually they're made for 137 00:09:20,760 --> 00:09:23,880 Speaker 1: America for the American UN Forces, whereas the Leopard two, 138 00:09:24,160 --> 00:09:28,440 Speaker 1: it's been bought by countries from Qatar to Turkey to Canada, 139 00:09:28,840 --> 00:09:33,240 Speaker 1: right across Europe. When we come back, Alan describes his 140 00:09:33,559 --> 00:09:36,840 Speaker 1: visit to the region in Germany where these weapons are 141 00:09:36,960 --> 00:09:50,240 Speaker 1: built and where Ukrainian troops are being trained to use them. Alan, 142 00:09:50,280 --> 00:09:53,319 Speaker 1: you write, the German companies that make these weapons are 143 00:09:53,480 --> 00:09:56,079 Speaker 1: doing pretty well. There's a lot of new orders coming in. 144 00:09:56,679 --> 00:10:00,079 Speaker 1: And you travel to the region in Germany where a 145 00:10:00,559 --> 00:10:03,679 Speaker 1: lad of this military hardware is made. Where did you 146 00:10:03,880 --> 00:10:07,520 Speaker 1: find there? Well, what is the first thing that you 147 00:10:07,679 --> 00:10:10,040 Speaker 1: notice is that it's it's something of a kind of 148 00:10:10,160 --> 00:10:14,199 Speaker 1: Bucolic area that it's known for its heath land and forests. 149 00:10:14,679 --> 00:10:17,880 Speaker 1: It's a region that's to the south of Hamburg, to 150 00:10:18,000 --> 00:10:20,840 Speaker 1: the north of Hanover in the state of Lower Saxony, 151 00:10:21,000 --> 00:10:22,880 Speaker 1: you know, in the former West and it used to 152 00:10:22,960 --> 00:10:27,280 Speaker 1: border East Germany, and it's very rural. There were all 153 00:10:27,320 --> 00:10:31,840 Speaker 1: these kind of semi timbered houses and it's all very pleasant, 154 00:10:31,880 --> 00:10:35,480 Speaker 1: but as soon as you arrive in this region, there's 155 00:10:35,559 --> 00:10:39,920 Speaker 1: not much immediate evidence of the armed forces being all 156 00:10:39,960 --> 00:10:43,839 Speaker 1: around and the defense manufacturers until you step out of 157 00:10:43,880 --> 00:10:47,960 Speaker 1: the car, and then you're just hit by the noise 158 00:10:48,080 --> 00:10:52,920 Speaker 1: of these like really deep percussions, these explosions. And that's 159 00:10:52,960 --> 00:10:58,080 Speaker 1: because Rhine Metal, which I visited incidentally, they don't allow visits, 160 00:10:58,200 --> 00:11:00,679 Speaker 1: so I went just to kind of to see the region. 161 00:11:01,160 --> 00:11:06,040 Speaker 1: And they have Europe's largest private firing test range on 162 00:11:06,200 --> 00:11:09,400 Speaker 1: the outskirts of this town where their munitions plan. It's 163 00:11:09,480 --> 00:11:12,160 Speaker 1: like a weapons factory with a small town attached to 164 00:11:12,240 --> 00:11:15,439 Speaker 1: it rather than the other way around. It really dominates 165 00:11:15,520 --> 00:11:18,600 Speaker 1: this small town of Interlouse. But just to the north 166 00:11:19,160 --> 00:11:23,400 Speaker 1: there's the largest army base in Germany, and that's a 167 00:11:23,520 --> 00:11:27,040 Speaker 1: long standing base that's been there since before the war 168 00:11:27,160 --> 00:11:30,440 Speaker 1: actually and was at one time occupied by British troops, 169 00:11:30,800 --> 00:11:34,920 Speaker 1: but now it's being used to train Ukrainian forces on 170 00:11:35,080 --> 00:11:39,240 Speaker 1: the Leopard two tank and they have tank firing ranges 171 00:11:39,280 --> 00:11:43,040 Speaker 1: of their own up there, so that between these various 172 00:11:43,120 --> 00:11:46,960 Speaker 1: different ranges there are several more. There's just a cacophony 173 00:11:47,080 --> 00:11:51,160 Speaker 1: of sounds, you know. I'm no expert in the armed forces, 174 00:11:51,280 --> 00:11:54,839 Speaker 1: but it sounded very clearly like machine gun fire, like 175 00:11:55,200 --> 00:12:00,920 Speaker 1: you know, larger artillery fire. And then these really deep, loud, 176 00:12:01,480 --> 00:12:05,760 Speaker 1: you know, scary, frankly booms that I've have no idea 177 00:12:05,840 --> 00:12:09,480 Speaker 1: what they were, but they reverberate along. And the strange 178 00:12:09,559 --> 00:12:13,280 Speaker 1: thing is that in the local community, because people are 179 00:12:13,320 --> 00:12:16,520 Speaker 1: so used to it, they don't hear it. Actually a 180 00:12:16,600 --> 00:12:18,800 Speaker 1: couple of people that I spoke to that I said, oh, 181 00:12:19,040 --> 00:12:21,240 Speaker 1: that was a loud one or something, and they said, oh, 182 00:12:21,440 --> 00:12:24,200 Speaker 1: was it? Was it? They hadn't noticed. In fact, one 183 00:12:24,240 --> 00:12:26,880 Speaker 1: person I spoke to said, I, you know, I've stopped 184 00:12:26,920 --> 00:12:30,559 Speaker 1: hearing them a long time ago. You're right there in 185 00:12:30,679 --> 00:12:35,400 Speaker 1: this region. Germany isn't just building and testing weapons. They're 186 00:12:35,480 --> 00:12:40,480 Speaker 1: also training Ukrainian troops and how to use them. One 187 00:12:40,559 --> 00:12:45,040 Speaker 1: thing that's not often or fully realized, especially I think 188 00:12:45,160 --> 00:12:48,840 Speaker 1: outside of mainland Europe, is that this war isn't all 189 00:12:48,880 --> 00:12:51,360 Speaker 1: that far away, that Ukraine is only something like a 190 00:12:51,480 --> 00:12:55,719 Speaker 1: ten hour drive from Berlin, and that Germany a lot 191 00:12:55,800 --> 00:12:59,040 Speaker 1: of the help it's been giving has been somewhat low key. 192 00:12:59,280 --> 00:13:01,760 Speaker 1: In the yes, it's been criticized in terms of it 193 00:13:02,000 --> 00:13:06,240 Speaker 1: dragging its heels and delivering heavy weaponry. But they have 194 00:13:06,559 --> 00:13:10,120 Speaker 1: been training a lot of Ukrainian troops, and so when 195 00:13:10,160 --> 00:13:14,360 Speaker 1: I visited this region then the Ukrainian troops were just 196 00:13:14,600 --> 00:13:16,439 Speaker 1: up the road and they were being trained on the 197 00:13:16,640 --> 00:13:20,240 Speaker 1: Leopard two tank. Because this was initially one of the 198 00:13:20,360 --> 00:13:22,959 Speaker 1: reasons that was cited not just by the Germans, but 199 00:13:23,160 --> 00:13:26,400 Speaker 1: in fact by the US government and others, the complexity 200 00:13:26,640 --> 00:13:29,920 Speaker 1: of these systems and how difficult it would be to 201 00:13:30,040 --> 00:13:34,679 Speaker 1: train Ukrainian troops. But they are apparently extremely adept and 202 00:13:34,760 --> 00:13:38,000 Speaker 1: I've learned very quickly, and these tanks are now in Ukraine. 203 00:13:38,120 --> 00:13:40,720 Speaker 1: But it's not just those systems that they were also 204 00:13:40,880 --> 00:13:43,760 Speaker 1: being trained on. When I was driving over there west 205 00:13:43,840 --> 00:13:47,240 Speaker 1: from Berlin, then I saw some Ukrainian troops that were 206 00:13:47,320 --> 00:13:51,360 Speaker 1: just obviously on their way there to receive training. Germany's 207 00:13:51,400 --> 00:13:54,640 Speaker 1: training Ukrainian troops, of course, it's not the only country 208 00:13:54,720 --> 00:13:57,400 Speaker 1: that's doing is The UK, for example, has also been 209 00:13:57,880 --> 00:14:03,839 Speaker 1: training Ukrainians on operating its Challenge or tanks. Alan you 210 00:14:04,400 --> 00:14:07,400 Speaker 1: said how the people who live in the towns around 211 00:14:07,800 --> 00:14:11,959 Speaker 1: these plants are so used to the sounds of weapons 212 00:14:12,040 --> 00:14:15,800 Speaker 1: being fired, and yet you found that they themselves were 213 00:14:15,920 --> 00:14:20,600 Speaker 1: pretty conflicted about whether Germany should be building up its 214 00:14:20,680 --> 00:14:25,880 Speaker 1: military and exporting more weapons abroad. It's a sentiment that 215 00:14:26,120 --> 00:14:30,360 Speaker 1: is actually fairly widespread in Germany that the pools consistently 216 00:14:30,480 --> 00:14:35,840 Speaker 1: show a majority in favor of helping Ukraine, but there's 217 00:14:35,920 --> 00:14:40,960 Speaker 1: a substantial minority who are very wary of that. It's 218 00:14:41,120 --> 00:14:45,880 Speaker 1: not because they love Russia and they want Ukraine to lose. 219 00:14:46,640 --> 00:14:51,120 Speaker 1: The pools clearly showed that people have concerns about supplying weapons, 220 00:14:51,160 --> 00:14:55,280 Speaker 1: about this abrupt change, this historic shift in German policy, 221 00:14:55,800 --> 00:14:59,680 Speaker 1: and that to some degree is reflected in the region 222 00:14:59,760 --> 00:15:04,720 Speaker 1: that I visited. Although I should stress that these places 223 00:15:05,640 --> 00:15:08,320 Speaker 1: get a lot of employment, a lot of higher paid 224 00:15:08,480 --> 00:15:14,160 Speaker 1: jobs from the defense industry, not necessarily to supply Ukraine. 225 00:15:14,280 --> 00:15:18,000 Speaker 1: But this is a massive increase in orders that they're 226 00:15:18,000 --> 00:15:21,720 Speaker 1: receiving as a result of the geopolitical environment at the moment, 227 00:15:21,840 --> 00:15:26,000 Speaker 1: as typified, you know, as expressed most clearly by Russia 228 00:15:26,080 --> 00:15:30,560 Speaker 1: invading Ukraine. In any case in Germany, that leaves a 229 00:15:30,680 --> 00:15:35,040 Speaker 1: lot of people uneasy. Alan you mentioned earlier how this 230 00:15:35,360 --> 00:15:38,800 Speaker 1: build up is immediately for the war in Ukraine, but 231 00:15:39,120 --> 00:15:42,200 Speaker 1: actually goes beyond that when you look forward, do you 232 00:15:42,320 --> 00:15:45,840 Speaker 1: think that Germany will continue to build out its military, 233 00:15:45,960 --> 00:15:50,400 Speaker 1: that this long standing hesitation against doing so has now 234 00:15:50,480 --> 00:15:53,280 Speaker 1: sort of turned a corner. I think that there's no 235 00:15:53,480 --> 00:15:57,000 Speaker 1: alternative non for Germany. That it's being called on from 236 00:15:57,080 --> 00:16:01,320 Speaker 1: all sides, from the US to or European countries, and 237 00:16:01,440 --> 00:16:03,880 Speaker 1: not least to Ukraine. That I think it's been a 238 00:16:04,040 --> 00:16:08,440 Speaker 1: very powerful and painful process of waking up to the 239 00:16:08,840 --> 00:16:12,520 Speaker 1: threats that it faces. But funnily enough, the very fact 240 00:16:12,680 --> 00:16:17,000 Speaker 1: that it's relied upon its economic power until now makes 241 00:16:17,240 --> 00:16:22,000 Speaker 1: the authorities, the politicians, the business community and others very 242 00:16:22,440 --> 00:16:26,280 Speaker 1: well aware of the threats that are posed not just 243 00:16:26,560 --> 00:16:30,240 Speaker 1: from Russia invading Ukraine but around the world. And so 244 00:16:30,680 --> 00:16:35,160 Speaker 1: in this kind of new world order where protectionism and 245 00:16:35,680 --> 00:16:40,800 Speaker 1: conflict and competition with China among others is the norm, 246 00:16:41,160 --> 00:16:46,800 Speaker 1: then it's frankly unavoidable I think for a country like Germany, 247 00:16:46,880 --> 00:16:50,720 Speaker 1: with its size and ambitions, to do anything other than 248 00:16:51,240 --> 00:16:55,280 Speaker 1: to step up in the military sphere. Alan Crafford, thanks 249 00:16:55,320 --> 00:16:59,880 Speaker 1: so much for Cameranasha. Thanks Wez after the break. How 250 00:17:00,120 --> 00:17:05,679 Speaker 1: do other European nations feel about Germany rebuilding its military? 251 00:17:14,160 --> 00:17:16,680 Speaker 1: As we've heard a lot of people in Germany are 252 00:17:16,920 --> 00:17:21,320 Speaker 1: wary about possibly going too far in building up the military. 253 00:17:21,960 --> 00:17:26,280 Speaker 1: Doctor Bostian Gigreg argues the opposite, that Germany needs to 254 00:17:26,359 --> 00:17:30,359 Speaker 1: do even more to defend itself and its allies. He's 255 00:17:30,440 --> 00:17:34,960 Speaker 1: Director of Defense and Military Analysis at the International Institute 256 00:17:35,119 --> 00:17:39,639 Speaker 1: for Strategic Studies, and from twenty ten to twenty fifteen 257 00:17:40,119 --> 00:17:45,680 Speaker 1: he worked for Germany's Ministry of Defense. Bostian, how would 258 00:17:45,800 --> 00:17:50,440 Speaker 1: you assess Germany's military build up in the year since 259 00:17:50,520 --> 00:17:54,400 Speaker 1: it was announced after Russian Bada Ukraine? Well, I think 260 00:17:54,640 --> 00:17:57,359 Speaker 1: the decision that people will remember is, of course that 261 00:17:57,800 --> 00:18:00,240 Speaker 1: off budget fund of one hundred billion euros to be 262 00:18:00,320 --> 00:18:03,200 Speaker 1: spent on the modernization of the German armed forces. This 263 00:18:03,359 --> 00:18:07,000 Speaker 1: will not be enough to make the German Armed Forces 264 00:18:07,119 --> 00:18:12,720 Speaker 1: into a fully fledged, competent a bet already fighting force, 265 00:18:12,960 --> 00:18:16,920 Speaker 1: but it will be used to now financially underpin a 266 00:18:17,040 --> 00:18:19,960 Speaker 1: lot of the decisions that were taken earlier before the 267 00:18:20,080 --> 00:18:24,000 Speaker 1: war started but were never properly funded. So this is 268 00:18:24,080 --> 00:18:27,560 Speaker 1: at best a catch up effort. This is important. This 269 00:18:27,680 --> 00:18:31,719 Speaker 1: will get things that before we're not achievable, but one 270 00:18:31,800 --> 00:18:35,280 Speaker 1: needs to be realistic. This is making good on planning, 271 00:18:35,359 --> 00:18:39,399 Speaker 1: assumptions and promises that were effectively made between twenty sixteen 272 00:18:39,400 --> 00:18:42,040 Speaker 1: and twenty eighteen, for which Germany did not have the money. 273 00:18:42,320 --> 00:18:45,280 Speaker 1: It now has some extra money. It will go towards 274 00:18:45,320 --> 00:18:47,600 Speaker 1: these things, but it is not yet the wholesale the 275 00:18:47,760 --> 00:18:53,320 Speaker 1: sea change that perhaps that cyte Vendor's speech suggested. Well, 276 00:18:53,400 --> 00:18:56,240 Speaker 1: let's talk about some of those details. What are some 277 00:18:56,440 --> 00:18:59,800 Speaker 1: of the things that have happened already and what else 278 00:19:00,160 --> 00:19:02,920 Speaker 1: needs to be done beyond what's being done right now. 279 00:19:03,720 --> 00:19:06,840 Speaker 1: I think where we really can say things have happened. 280 00:19:06,840 --> 00:19:09,600 Speaker 1: So sideventded to me has really three elements. One is 281 00:19:09,600 --> 00:19:12,879 Speaker 1: ge economics, one is about geostrategy, and one's about the 282 00:19:12,920 --> 00:19:16,000 Speaker 1: military aspect. I think where most has happened is actually 283 00:19:16,040 --> 00:19:19,960 Speaker 1: geo economics, because this is about decoupling from Russia and 284 00:19:20,000 --> 00:19:23,360 Speaker 1: the energy sector and in other areas of economic activity. 285 00:19:23,680 --> 00:19:25,680 Speaker 1: And here Germany has achieved a lot in a year. 286 00:19:25,720 --> 00:19:28,199 Speaker 1: I mean, that's clear and that needs to be recognized, 287 00:19:28,400 --> 00:19:31,680 Speaker 1: actually more than some people have assumed would be possible. 288 00:19:32,280 --> 00:19:35,280 Speaker 1: So German energy dependency on Russia to me is a 289 00:19:35,359 --> 00:19:36,879 Speaker 1: thing of the past and I don't think it is 290 00:19:36,960 --> 00:19:40,320 Speaker 1: coming back. And a similar conversation now has started actually 291 00:19:40,680 --> 00:19:43,399 Speaker 1: with regards to China. Is it wise to further invest 292 00:19:43,480 --> 00:19:46,320 Speaker 1: into the economic ties with China, but this is not 293 00:19:46,480 --> 00:19:49,040 Speaker 1: as focused yet as the Russia conversation is, and it's 294 00:19:49,080 --> 00:19:51,960 Speaker 1: more difficult because the scale and the varied nature of 295 00:19:52,000 --> 00:19:55,159 Speaker 1: the dependencies of the German economy on China just make 296 00:19:55,240 --> 00:19:58,679 Speaker 1: that more difficult. In terms of geostrategy, I think Germany 297 00:19:58,800 --> 00:20:01,480 Speaker 1: needs to do more. Germany really needed to admit that 298 00:20:01,640 --> 00:20:04,640 Speaker 1: it was wrong about its assessment of Russia. The threat 299 00:20:04,640 --> 00:20:08,679 Speaker 1: assessment was wrong, that it was too optimistic, despite by 300 00:20:08,760 --> 00:20:12,280 Speaker 1: the way, many warnings from friends and allies about the 301 00:20:12,359 --> 00:20:16,600 Speaker 1: ability to change Russia through dialogue, through engagement and through trade, 302 00:20:16,800 --> 00:20:19,520 Speaker 1: and to move on from that assessment which was wrong, 303 00:20:20,320 --> 00:20:22,399 Speaker 1: and move on to an assessment shared by many of 304 00:20:22,480 --> 00:20:25,359 Speaker 1: its Eastern neighbors and Eastern partners, that Russia as a 305 00:20:25,440 --> 00:20:28,000 Speaker 1: threat to Germany and to German security and needs to 306 00:20:28,040 --> 00:20:30,200 Speaker 1: be treated as such. And by the way, I saw 307 00:20:30,240 --> 00:20:33,320 Speaker 1: some interesting polling data actually commissioned by the German government 308 00:20:33,400 --> 00:20:36,359 Speaker 1: that two thirds of Germans do see Russia as a 309 00:20:36,400 --> 00:20:39,679 Speaker 1: threat to Germany. But this shift from yes, we were 310 00:20:39,760 --> 00:20:43,440 Speaker 1: wrong too well. Therefore we need to adopt a new 311 00:20:43,520 --> 00:20:47,600 Speaker 1: mindset that remains incomplete and that's ambiguous, and it looks ambiguous, 312 00:20:47,760 --> 00:20:51,240 Speaker 1: so I think that is one area where more work 313 00:20:51,320 --> 00:20:53,920 Speaker 1: needs to be done. And then finally, as a military dimension, 314 00:20:54,160 --> 00:20:58,040 Speaker 1: the one hundred billion of budget fund headline grabbing was created. 315 00:20:58,480 --> 00:21:01,359 Speaker 1: Now it is very slow to come into practice. The 316 00:21:01,480 --> 00:21:05,320 Speaker 1: drawdown is very slow. Very few projects have actually been 317 00:21:05,800 --> 00:21:09,639 Speaker 1: put into contracts. A lot more reform is needed in 318 00:21:10,119 --> 00:21:13,399 Speaker 1: around the acquisition process for it to be more agile, 319 00:21:13,440 --> 00:21:16,760 Speaker 1: to be faster, to be more more strategic. There is 320 00:21:16,800 --> 00:21:20,159 Speaker 1: a problem with retention and recruitment in the force. And 321 00:21:20,240 --> 00:21:23,800 Speaker 1: then there's just that wholesale, very large gap on the 322 00:21:24,480 --> 00:21:29,240 Speaker 1: munitions side which needs to be addressed alongside equipment recapitalization. 323 00:21:29,320 --> 00:21:31,399 Speaker 1: And that's why I'm saying one hundred billion will not 324 00:21:31,520 --> 00:21:34,159 Speaker 1: be enough. Becomes more and more obvious that what this 325 00:21:34,280 --> 00:21:37,879 Speaker 1: fund will achieve is implement defense planning targets that we 326 00:21:37,960 --> 00:21:40,560 Speaker 1: had before the war even started, but that we're never 327 00:21:40,640 --> 00:21:45,160 Speaker 1: funded appropriately. And now it is about realizing that Germany 328 00:21:45,280 --> 00:21:50,320 Speaker 1: needs to fund its armed forces much better. Two percent 329 00:21:50,400 --> 00:21:54,479 Speaker 1: of GDP for Germany should be the floor, not the ceiling. 330 00:21:54,880 --> 00:21:58,640 Speaker 1: We're still not there, and raising the defense budget needs 331 00:21:58,680 --> 00:22:01,000 Speaker 1: to be achieved fair soon, and then it needs to 332 00:22:01,040 --> 00:22:04,119 Speaker 1: be maintained at that level. Otherwise the shortfalls of the 333 00:22:04,200 --> 00:22:07,720 Speaker 1: buddness will remain unfixable during the next ten years. In 334 00:22:07,840 --> 00:22:12,879 Speaker 1: a recent article, you wrote that Berlin's interpretation of the 335 00:22:13,080 --> 00:22:18,360 Speaker 1: situation in Ukraine and its implications for Europe still diverge 336 00:22:18,680 --> 00:22:22,240 Speaker 1: from that of many allies. What did you mean by that? Yeah, 337 00:22:22,280 --> 00:22:26,399 Speaker 1: I think Olaf Schotz, the German Chancellor, he prefers to 338 00:22:26,560 --> 00:22:30,000 Speaker 1: say that Ukraine must win or that Russia must not win. 339 00:22:30,400 --> 00:22:34,040 Speaker 1: He prefers not to say that Russia must lose, and that, clearly, 340 00:22:34,119 --> 00:22:37,320 Speaker 1: to me, is what is required here. Russia must lose. 341 00:22:37,640 --> 00:22:40,840 Speaker 1: And this might sound like a semantic difference, but I 342 00:22:40,920 --> 00:22:43,239 Speaker 1: think it points to something bigger, and namely that there 343 00:22:43,240 --> 00:22:47,440 Speaker 1: are still some in the political and economic sphere of 344 00:22:47,880 --> 00:22:50,560 Speaker 1: Germany who think that once the war ends, there will 345 00:22:50,640 --> 00:22:54,480 Speaker 1: be a return, or there will be some return to 346 00:22:54,640 --> 00:22:58,080 Speaker 1: business as usual with Russia. And to me, I find 347 00:22:58,160 --> 00:23:01,480 Speaker 1: that unthinkable for a generation to come, and in any case, 348 00:23:01,600 --> 00:23:04,159 Speaker 1: highly dependent on what kind of Russia emerges and what 349 00:23:04,280 --> 00:23:07,080 Speaker 1: strategic persona it takes. But this is the kind of 350 00:23:07,160 --> 00:23:10,879 Speaker 1: ambiguity that is irritating to others. And I mean, you 351 00:23:10,960 --> 00:23:14,000 Speaker 1: know what can recognize that while often slow and reluctant. 352 00:23:14,080 --> 00:23:17,760 Speaker 1: Germany has now taken a place among the strong military 353 00:23:17,800 --> 00:23:21,360 Speaker 1: supporters of Ukraine. That's not a small development, and one 354 00:23:21,400 --> 00:23:24,320 Speaker 1: can add, well, let's hope it continues and expands further 355 00:23:24,440 --> 00:23:28,359 Speaker 1: and faster. But I think that fundamental challenge remains still 356 00:23:28,560 --> 00:23:32,920 Speaker 1: to adjust to a reality where the European security order 357 00:23:32,960 --> 00:23:36,560 Speaker 1: and the preferences that Germany associated with it, those are gone. 358 00:23:36,720 --> 00:23:39,960 Speaker 1: You know, big wars back in Europe. Mechanisms of cooperation 359 00:23:40,160 --> 00:23:43,360 Speaker 1: coordination have been shredded by this war to nothing. Economic 360 00:23:43,480 --> 00:23:47,480 Speaker 1: dependencies that were accepted turned into unacceptable risks. So, in short, 361 00:23:47,720 --> 00:23:51,160 Speaker 1: that European order of prosperity and security on which Germany 362 00:23:51,240 --> 00:23:55,680 Speaker 1: depended was fundamentally undermined by Russia's war of aggression. And 363 00:23:55,840 --> 00:23:58,880 Speaker 1: Germany still needs to come to terms with that new reality. 364 00:23:59,200 --> 00:24:02,920 Speaker 1: And Germany maintains that element of ambiguity that maybe there's 365 00:24:02,960 --> 00:24:05,400 Speaker 1: a way back to how things were before, when many 366 00:24:05,440 --> 00:24:08,120 Speaker 1: others say we are in a new era. The world 367 00:24:08,240 --> 00:24:10,680 Speaker 1: is no longer as it was before and it will 368 00:24:10,800 --> 00:24:14,640 Speaker 1: not be again as it was before. And what about 369 00:24:14,680 --> 00:24:18,840 Speaker 1: other countries. How is the idea of Germany as a 370 00:24:18,960 --> 00:24:24,760 Speaker 1: major military power being perceived around Europe? Outside. It's helped 371 00:24:24,800 --> 00:24:28,000 Speaker 1: for the war in Ukraine. I think Germany's neighbors are 372 00:24:28,040 --> 00:24:33,040 Speaker 1: not really worried about a Germany that is strong in NATO. 373 00:24:33,600 --> 00:24:35,640 Speaker 1: I think they're worried about a Germany that is weak 374 00:24:35,760 --> 00:24:38,920 Speaker 1: in NATO. That's a shift, of course, of some of 375 00:24:39,000 --> 00:24:42,280 Speaker 1: the historical dynamics. But they all understand, in my view, 376 00:24:42,600 --> 00:24:44,680 Speaker 1: that some of the weight and some of the mass 377 00:24:44,880 --> 00:24:48,600 Speaker 1: of a credible conventional defense and deterns posture of NATO 378 00:24:48,960 --> 00:24:52,320 Speaker 1: on NATO's eastern flank facing Russia will have to be 379 00:24:52,480 --> 00:24:57,120 Speaker 1: provided by that big and economically powerful country that is Germany. 380 00:24:57,680 --> 00:25:02,360 Speaker 1: They also understand that the delta between that latent potential 381 00:25:02,480 --> 00:25:06,320 Speaker 1: that Germany has and the military output it actually produces 382 00:25:06,400 --> 00:25:09,680 Speaker 1: for collective defense and security, that delta is wider for 383 00:25:09,840 --> 00:25:14,000 Speaker 1: Germany than it is for almost any other European NATO country. 384 00:25:14,040 --> 00:25:16,160 Speaker 1: And they want Germany to close this delta, to show 385 00:25:16,240 --> 00:25:19,120 Speaker 1: up well prepared, to be well equipped, to be well let, 386 00:25:19,200 --> 00:25:22,159 Speaker 1: to be well funded and firmly embedded in NATO and 387 00:25:22,280 --> 00:25:25,640 Speaker 1: the EU. So I think the worry really is if 388 00:25:25,760 --> 00:25:30,520 Speaker 1: Germany does not deliver NATO's deterrence and defense posture has 389 00:25:30,640 --> 00:25:33,240 Speaker 1: a whole and the weak spot at its center, and 390 00:25:33,400 --> 00:25:36,119 Speaker 1: that is something that I think most partners and allies 391 00:25:36,200 --> 00:25:40,040 Speaker 1: really would like to avoid. Bestian Giegert, thanks so much 392 00:25:40,040 --> 00:25:42,600 Speaker 1: for speaking with me. Well, so it's pleasure, Thank you. 393 00:25:44,160 --> 00:25:46,400 Speaker 1: Thanks for listening to us here at The Big Take. 394 00:25:46,440 --> 00:25:49,720 Speaker 1: It's a daily podcast from Bloomberg and iHeartRadio. For more 395 00:25:49,760 --> 00:25:53,400 Speaker 1: shows from my Heart Radio, visit the iHeartRadio app, Apple podcast, 396 00:25:53,600 --> 00:25:56,280 Speaker 1: or wherever you listen, and we'd love to hear from you. 397 00:25:56,560 --> 00:25:59,920 Speaker 1: Email us questions or comments The Big Take at Bloomberg 398 00:26:00,040 --> 00:26:03,920 Speaker 1: dot net. The supervising producer of the Big Take is 399 00:26:04,080 --> 00:26:09,040 Speaker 1: Vicky Bergolina. Our senior producer is Catherine Fink. Federico Romangnello 400 00:26:09,160 --> 00:26:13,680 Speaker 1: is our producer. Our associate producer is Zeneb Sidiki. Raphael 401 00:26:13,760 --> 00:26:17,479 Speaker 1: Amsili is our engineer. Our original music was composed by 402 00:26:17,600 --> 00:26:21,840 Speaker 1: Leo Sidrin and Wescasova. We'll be back tomorrow with another 403 00:26:21,960 --> 00:26:22,440 Speaker 1: Big Take.