The 2012 Defence Budget

Berlin, 04.01.2012.
The Defence Budget is part of the Federal Budget and establishes the financial framework for the Bundeswehr.

The German Bundestag passed the Budget Act 2012 on
25 November 2011. Germany’s federal budget provides for expenditure totalling EUR 306.2 billion in 2012.

The 2012 defence budget comprises expenditure totalling around EUR 31.87 billion. This represents a 10.4% share of the federal budget. The nominal volume has risen by about EUR 0.32 billion compared with the previous financial year (2011: EUR 31.55 billion).

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The defence budget structure

The defence budget is divided into four large spending areas:

• Operating expenses make up the largest share of the budget, totalling around 57%.
• They are followed by capital defence expenditure, totalling around 23%.
• The remaining shares are allocated to pension and benefits payments for former military career personnel and Bundeswehr civil servants (15%), and to
• private operator models for the further development of the Bundeswehr (5%).

Around half of the defence budget is earmarked to cover personnel costs: Expenditure for active-duty personnel amounts to EUR 10.3 billion, while a total of EUR 4.7 billion has been allocated for pensions and benefits. Around EUR 6.4 billion are available for military procurements and research, development, testing and evaluation.

The 2012 Defence Budget

Spending Area	Budget target in 2011	% of ceiling amount in 2011	Budget target in 2012	% of ceiling amount in 2012	Changes in 2012
I. Operating expenses	18,747.1	59.4%	18,259.2	57.3%	-487.9	-2.6%
of which: Personnel costs	11,932.6	37.8%	10,266.7	32.3%	-1,665.9	-14.0%
of which: Materiel maintenance	2,394.6	7.6%	2,586.5	8.1%	191.9	8.0%
of which: Other operating expenses (e.g. BImA* rents, POL, property management)	4,419.9	14.0%	5,406.0	17.0%	986.1	22.3
II. Private operator contracts for the further development of the Bundeswehr	1,600.8	5.1%	1,556.4	4.9%	-44.4	-2.8%
III. Capital defence expenditure	7,347.2	23.3%	7,363.9	23.1%	16.7	0.2%
of which: Research, development, testing and evaluation (incl. grants to research institutes)	921.9	2.9%	918.1	2.9%	-3.9	-0.4%
of which: Military procurements	5,286	16.8%	5,476.3	17.2%	190.3	3.6%
of which: Military installations (incl. NATO infrastructure)	986.0	3.1%	826.0	2.6%	-160.0	-16.2%
of which: Other investments	153.3	0.5%	143.6	0.5%	-9.7	-6.3%
Ceiling without pensions and benefits	27,695.1	87.8%	27,179.6	85.3%	-515.6	-1.9%
IV. Pensions and benefits expenditure	4,632.2	14.7%	4,692.3	14.7%	60.1	1.3%
Defence budget ceiling	32,327.4	102.5%	31,871.9	100.0%	-455.5	-1.4%
General reduction on expenditure	-778.4	-2.5%			778.4
Nominal defence budget ceiling	31,549.0	100.0%	31,871.9	100.0%	322.9	1.0%

* BImA = Institute for Federal Real Estate

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