After the Russian Invasion of Ukraine threw European Security out of balance, many nations started to rethink their own security as well. One of those was Germany. The biggest country in the EU was not only forced to rethink how to ensure its Energy Security but it was also forced to rethink its approach to matters of national defence, in particular the funding of the armed forces.
As a result, the government announced that a „Sondervermögen“, a special fund, was to be spent in order to ensure better funding for the armed forces, which officials claimed were neglected before. The special fund was set at 100 billion. In order to fund this, Christian Lindner, Minister of Finance, has already argued for more budgetary discipline as well as for a debt brake, which is enshrined in Article 109 paragraph 3 and Article 115 in the constitution. It has already been written that especially the debt brake would lead to a return of Austerity in Germany, something that has not been seen since the Eurocrisis. While the Sondervermögen is excluded from the debt brake, cuts to social spending are still expected. Minister of Finance Lindner even argued for no social spending for three years but was stopped by coalition partners. Clemens Fuest, Head of the Ifo-Institute, said when the government increases military spending, other areas would receive less spending, even saying: “Guns and butter would be nice, but that is like the land of milk and honey. That does not work. It is guns without butter”. According to him, the welfare state would still receive funding, but would be „smaller“
This article is mainly concerned with highlighting the negative impact that Austerity has on democracy, with empirical evidence going back to the rise of National Socialists. Finally, the article argues against the special fund for the German Armed Forces and is in favour of a European Solution instead. Before that, the article offers a short explanation of Austerity and explains how this policy impacts Society and how this economic policy threatens democracy in Germany, especially regarding the recent surge of the AfD in the polls.
The Impact of Austerity on Politics in France and Germany
Usually, Austerity describes a set of policies imposed by a government in order to control public sector debt. This policy is usually imposed when debt is so large that is possible that the government might be unable to repay debt. Most famously, Austerity was imposed in the Eurozone after the financial crash of 2008. Policies usually associated with Austerity are cuts to social spending or a stop to investments.
In general, the effects of Austerity on Society have been overwhelmingly negative. Research has found that Austerity increases electoral abstention and votes for non-mainstream parties. Other research papers concluded that Austerity leads to significant increases in vote shares of extreme parties, lower voter turnout, and a rise in political fragmentation.
Even more concerningly, Austerity in the United Kingdom has been associated with leading to Brexit. Fetzer (2019) associates the significance between the exposure of an area to the UK government’s austerity-induced welfare reforms begun in 2010 and the rise in support for the far-right UK Independence Party, a correlation in Leave support in the 2016 UK referendum on European Union membership. In Germany, research has found that AfD Voters care more about economic insecurity than other voters. Furthermore, Germany´s failure to act decisively in response to economic insecurity coincided with a rise in the approval ratings of the far-right AfD in the summer of 2022. It has also been found that: „[…] regional variation in economic deprivation gave rise to the electoral success of the populist right-wing party AfD in the federal election of 2017.“
Concluding Thoughts and Alternatives
As has been proven far too many times, Austerity would present a significant threat to democracy in Germany, likely leading to a further rise of the far-right AfD. Regarding the debt brake, it has been argued that Germany should introduce more flexible fiscal rules in order to bolster democracy. Nonetheless, it is clear that Germany has to answer to the changes in the International System. However, it appears that the country is trying to answer to a change in the International System without considering domestic politics, especially regarding the inequality in East Germany. This article tried to highlight the connection between this fiscal policy and its negative effects on Society, especially the fact that this policy is no doubt responsible for the rise of extremist parties in Europe. It is unlikely that the Austerity introduced by the Sondervermögen for the armed forces would lead to a different outcome. Therefore, based on the evidence presented above, the author argues that the Sondervermögen presents a genuine threat to German Democracy.
However, this does not mean that Germany should do nothing regarding its defence own defence. Instead, Germany should look for a European Solution since it is a problem that all European States face. Germany should look to pursue structural integration of armed forces and invest more in defence cooperation in the EU. In the past, specific programs like the Common Structured Cooperation, and PESCO have been introduced to increase defence cooperation among member states except Malta. Germany should try to increase its efforts for common European Defence Cooperation instead of introducing policies whose ineffectiveness has been proven so many times.
Whatever the government does, it is clear a debt brake may be well-intentioned, but the stakes for democracy and the economy are simply too high to value fiscal stringency above everything else.
Jonas is interested in challenging environments where he can learn and expand his knowledge about global politics. His main academic interest lies in German and European Foreign and Security Policy. He is also very interested in the Politics of European Migration. He moreover worked on projects focussing on Germany's Role in the EU and Energy Security.