Germany launches wide-ranging defense reform; cutbacks in personnel are going to be redirected to investments in technology.

The German government has until the end of this month to lay down the specifics for its 2005 defense plan, which will jumpstart a new effort to match the country's increased military commitments.

Defense officials and program managers will have to come up with a new structure and organization, as well as an equipment procurement plan, according to Germany's Defense Minister Peter Struck. While the deadline for a transformed German military" is set for 2010, Struck said he expects visible changes by 2007.

Struck wants to trim the German military from 280,000 to 250,000 service members, as part of his concept of "class instead of mass." By reducing personnel, Struck said he expects savings of several million euros, which will be redirected into modernization efforts. The goal is to increase investment spending to 30 percent of the budget, compared to 25 percent today.

"We have detected some deficiencies in the budget with the high number of operations abroad which cost a lot of money," said Uwe Fialkowski, counselor for defense cooperation at the German Embassy, in Washington D.C.

"The reorganization of the Bundeswehr is being developed with the intention of achieving a balance between mission tasks, equipment and resources," he said.

According to Rear Adm. Hubertus von Puttkamer, the German defense attache in Washington, the Bundeswehr has already been working with new policy guidelines issued in May 2003. In addition to improvements in materiel and equipment, the ministry will address personnel and management reform.

The Bundeswehr 2003 budget is roughly 24 billion euros. Almost 75 percent of that, or 18.2 billion, go to operations and maintenance.

Out of the roughly 6 billion euros slated for investments, 4 billion go to military procurement. Less than one billion, or roughly 4 percent, goes into research, development and testing, according to Fialkowski.

The German defense budget, he said, currently is characterized by high operating expenditures and personnel costs, insufficient investment rate, considerable over-planning and resources committed to contracts.

"We will have to have an approach from an overall service [perspective], and we will have to coordinate our efforts on a multi-national level," he said. "That can be done in the way of armaments cooperation, task-sharing and functional-work sharing."

Fialkowski described the core capabilities of the Bundeswehr as support and sustainability; command and control; intelligence collection and reconnaissance; mobility and effective engagement; survivability and force protection.

Army

The German Army will take the biggest cut in personnel. It already is slimming down from a structure of 230,000 personnel to 132,000, but these numbers will go down further by 2010, depending on how the new reduction of 30,000 soldiers will be distributed across all the services, Col. Carsten John Jacobson, the German military defense attache, told National Defense. The heavy forces will be reduced by 45 percent. The number of Leopard main battle tanks will go down from the current 2,500 to 852.

The Army has introduced three new elements--a special operations division, an air mobile operations division and Army Forces Command. "What we are heading for is an increase in professionalism, especially in view of the operational commitments that we have," said Jacobson. The German Army has 8,000 troops supporting NATO in Kosovo, Bosnia and Afghanistan. Germany also has troops committed in Macedonia, the Straights of Gibraltar and the Horn of Africa.

The German Army is looking to purchase 80 Tiger attack helicopters. The first ones could join the airlift operations division by 2004.

The ground forces will have a total of 605 artillery systems--M109 howitzers, the Multiple Launch Rocket System and the PZH (Panzerhaubitze) 2000 155mm self-propelled howitzer. The Army spent 1.3 billion euros for a batch of 185 PHZ 2000s. The first system was delivered in 1998. The PHZ range exceeds 40 km.

The Army envisions an inventory of 488 airborne assault vehicles, called Wiesel, according to Jacobson. The Wiesel comes in several configurations: anti-tank with TOW missiles; armed with a 20mm cannon; the Ozelot weapons platform (which has four Stinger surface-to-air missiles in the ready-to-launch position); the platoon command post, which has the helicopter and airplane radio/radar detection; the medical vehicle and an upcoming mortar version.

The governments of the United Kingdom and Germany signed a contract in November 1999 for the collaborative development and initial production of the family of next generation armored utility vehicles. The program is known as the Multi Role Armoured Vehicle (MRAV) in the United Kingdom, and the Gepanzertes Transport-Kraftfahrzeug (GTK) in Germany. The total requirement is expected to be more than 2,000 vehicles, but Jacobson could not yet provide a specific number for the German procurement.

Industry expels, however, speculate that the program may not survive future budget cuts.

The Bundeswehr requirement is for 1,152 infantry combat vehicles and 467 infantry transport vehicles. The "Dingo" is a versatile transport vehicle, which entered its initial operational capability in 1999. The contract of $100 million euros called for delivery of 147 vehicles. The "Dingo" weighs 8.8 tons and can carry a payload of 1.4 tons and a crew of five people. It is outfitted with a 7.62 mm machine gun and it is armored, ,air portable and cross-country mobile.

For its transport helicopters, the Army is looking at a combination of 188 NH 90s--which are just starting delivery--and the U.S. heavy-lift cargo helicopter, the CH-53.

Luftwaffe

Meanwhile, the German Air Force has been dealing with a steady increase in operations since the end of the Cold War, said Air Atrache Col. Franz Josef Nolte. The goal for the restructuring of the Luftwaffe is to reduce manning and save on operational costs, he said. The new organizational blueprint of the Air Force needs to be ready by 2004, according to official documents. Luftwaffe will reduce its personnel from 60,000 to about 51,000.

"We will have fewer combat air wings and much less surface-to-air equipment to operate and maintain in the near future," he said.

Germany already has started phasing out aging equipment. For example, 23 MIG 29 fighters are in the process of being transferred to Poland.

According to Nolte, "interoperability and interconnectivity are the key requirements for an internationally-oriented Air Force."

The Luftwaffe operates NATO Air Command and Control System (ACCS) with deployable components; the Link 16 (for the Surface-to-Air Missile Operation Center), Eurofighter, Tornados and the German Improved Air Defense System. The Air Force also will manage the upgrade to the NATO E-3 JSTARS ground surveillance aircraft, as well as the NATO Alliance Ground Surveillance System (AGS).

German defense officials said the purchase of the Eurofighter and the A400M cargo aircraft will close serious gaps in capability.

The A400M project has been plagued by lack of funds and commitment from other European governments. Germany has set aside a budget of 8.2 billion euros for 60 aircraft and expects initial operating capability in 2009. Germany will have two wings of A400M aircraft, according to Nolte.

Eurofighter, which has seen its share of delays and considerable cost overruns, initially will replace the F-4 F Phantom and MIG 29 aircraft. Subsequently, it also will replace the Tornado in the air-to-ground version. Germany will receive 44 Eurofighters by the end of 2005.

A total of 180 of the existing 262 fighter jets in the Luftwaffe's inventory should be replaced by the Eurofighter. This order will cost 19.5 billion euros.

Meanwhile several Tornados have been outfitted with the Litening laser designator and the Mk 84 Paveway III laser-guided bomb, said Nolte. The Air Force will take over the anti-ship attack role with the Tornado, while the Eurofighter will have the precision-strike capability.

For air defense, "the hope for the German Air Force rests with the medium-air defense system MEADS," said Nolte. However, MEADS is still waiting to be started.

Germany is also equipping its F-4s with AIM-9 and AMRAAM air-to-air missiles, while the Eurofighters will receive IRIS-T and Meteor.

Navy

Navy Capt. Luetz Helmrich, the naval attache in Washington, said the naval force will be reduced from 27,200 to 26,300. The emphasis in the development of new technology is on frigates, fast boats, submarines, mine detection and marine aviation.

The Navy has several major projects underway. One of them is the U- 212 submarine, which functions on fuel cells. The U-212 currently is undergoing sea acceptance trials and is supposed to reach operational capability in 2004. Germany plans to purchase four submarines. The budget for this project is 1.6 billion euros.

The commissioning of class-124 frigates will enable the German Navy "to achieve the necessary improved quality in the area of air defense," said Helmrich. The Navy will receive three of these ships, to be commissioned next year. The project has a price tag of 2.2 billion euros. "Those ships will significantly enhance the sustainability of the naval crews," he said.

The development of a sea-based capability to counter theater ballistic missiles is also under investigation. Germany is cooperating with the United States in this arena.

The Navy will have 33 NH-90 helicopters, and by 2005, all the naval Tornados will be decommissioned.

"For deployability and mobility within a joint transport concept, we are about to develop a military sealift capability in order to contribute to national strategic capability,' said Helmrich. "Several solutions axe being analyzed, and the system capability requirements are in the process of being refined."

U.S.-Europe Rift

Even though Germany is taking steps towards reforming its military and upgrading its technology, the gap in capabilities is widening between Germany--and Europe in general--and the United States.

The growing disparity in spending is undermining future prospects for transatlantic armaments cooperation, said Manfred von Nordhein, senior advisor to the chief operating officer of EADS North America. FADS is Europe's largest defense contractor.

Last year, the United States spent $65 billion on research and development, while all of Europe's R&D spending combined was $12 billion. That is only a bit more than what the United States spent on missile defense research alone, which was approximately $9 billion, said von Nordhein.

France and the United Kingdom have R&D budgets each four times as big as Germany's. According to Fialkowski, Germany is trying to work in collaborative projects with France. "We are trying to look at some kind of sharing of capabilities that each country will develop," he said. "We will concentrate more on land systems, and this is all subject to negotiation in the European Armaments Agency. We are trying to do something with our small budgets, and we have to look for new ways on how to deal with this."

Germany also intends to set aside part of its R&D budget for bilateral cooperation with the United States. "I do not know how this will develop," Fialkowski said. Part of Struck's new guideline, he said, is to define areas of technology innovations, "and Germany should be ready to invest in them."

Elizabeth G. Book, a fellow at the Bosch Foundation in Berlin, contributed to this report.