cross-posted from: https://lemmy.zip/post/1554654
Archived version: https://archive.ph/VQN5X
Archived version: https://web.archive.org/web/20230817101801/https://www.politico.eu/article/germany-defense-change-of-plan-nato-spending/
You can thank our libertarian minister of finance and his debt-ceiling fetish for that. He’s also the one who demanded that our 100 billion fond for the armed forces has to include VAT tax, which effectively lowers it to 84 billion.
He’s also the guy who likes to protect the more than 20 billion in subsidies for fossil fuels or the car industry, yet wants to cut social services by 20 billion.
Danke Lindner.
Why shouldn’t it include VAT?
Because this tax goes straight back to the government. It buys weapons systems for a certain price, pays 19% VAT on top of it - back to itself.
So this means that the money which the ministry of defense was granted by the ministry of finance is just 84 billion plus an additional 16 billion (19% VAT) which will go straight back to the ministry of finance and can not be used to procure anything. A “true” 100 billion budget would have meant either a suspension of VAT on all payments or 119 billion provided by the ministry of finance, of which 100 billion can be used to buy systems and 19 billion would go back to the government as VAT.
because if the government spends 100€ on whatever, it gets 19€ back.
So it only actually spent 81€.Careful: VAT is calculated additionally to the price of the goods bought. So when the government buys goods for 84€, an additional +19% VAT is slapped on top of it, which comes out to 16€, for a final payment of 100€. So only when the government ultimately pays 119€ on something, it gets 19€ back.
I would not call that a U-turn:
Instead, the government pledges to meet the 2 percent target on average over a five-year period, as already set out in the recently published National Security Strategy.
Seems more like the same direction, just on a parallel lane.
On the one hand debatable, as it doesn’t come 100% in line with the wording of the NATO guideline. On the other hand a practical course to measure across 5 years, as in some years there are larger procurements required than in others and overall the 2% are still met.
Politico = Axel Springer
They always put a divisive spin on it. It’s the German equivalent of Murdoch.
Atlantik-Brücke much?
What’s going on in Germany regarding war and the army? It seems that when it comes to Ukraine help, EU defense or its own army you get an info one day and retract a few days later.
This article is from a bullshit magazine, its actually 2% over 5 years, so not a real change
Yes, this just allows them to spend more in some year and less in another instead of having to budget to a very specific point each year.
