Economist criticizes German defense minister for spending 700 billion on outdated systems over AI and drones

Moritz Schularick, president of the Kiel Institute for the World Economy, criticized German Defense Minister Boris Pistorius for misallocating a €700 billion modernization budget for the Bundeswehr, according to interviews published on Aug. 10. Schularick told the *Süddeutsche Zeitung* that Pistorius is spending a significant portion of the funds on outdated systems like tanks and frigates rather than future-oriented technologies such as AI, robotics, drones, and satellite systems.
The economist argued that Germany lacks the manpower for traditional warfare and must prioritize advanced, unmanned capabilities. “We have a lot of capital, a lot of industrial know-how, and in some areas still highly modern technologies,” Schularick said. “What we don’t have are hundreds of thousands of people who want to get into tanks and drive to the front. That means: wherever possible, we must focus on AI, robotics, drones, and satellite technology instead of more soldiers, more manned vehicles, and more barracks.”
Schularick called for the appointment of a central coordinator in the Chancellery to oversee military procurement, stating that the Defense Ministry is “very slow” and overwhelmed by the task of reorganizing Germany’s and Europe’s defense strategy. He suggested figures like former Deutsche Telekom CEO René Obermann or ex-Airbus chief Tom Enders for the role, emphasizing the need for someone with political authority to align industry, startups, and ministries toward a unified goal.
He also urged a fundamental shift in procurement strategy, moving beyond simply replenishing Bundeswehr stockpiles. “We must think from the outset about how economic processes must be structured so that the necessary weapons systems can be rapidly and sufficiently reproduced in an emergency,” Schularick said. Instead of ordering small batches of high-complexity equipment, he proposed investing in entire production facilities. “In other words: we no longer order the individual device, but the entire factory, which in an emergency could produce 2,000 missiles a year instead of 200,” he added, noting that the state would need to subsidize such capacity in peacetime to make it viable for companies.
The €700 billion program, largely credit-financed, risks failing to deliver its intended impact if current spending priorities persist, Schularick warned. He has repeatedly criticized Pistorius’ approach since Russia’s invasion of Ukraine in February 2022, framing the debate as part of broader efforts to strengthen Germany’s defense capabilities while addressing economic growth challenges.
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