Earlier this summer, Karl-Theodor zu Guttenberg, the German defense minister, was urged to identify how to cut the military budget by several billions of dollars.

Most observers expected Guttenberg to be protectionist about the Bundeswehr, the country's armed forces, but the young minister didn't negotiate over money. Rather, he took a plunge forward, by warning that the Bundeswehr faced a radical, potentially painful overhaul.

Guttenberg last week unveiled five options to reform the Bundeswehr in a bid to make it smaller and better at the same time.

The minister's favorite option, No. 4, would reduce the number of troops serving with the Bundeswehr from 252,000 to around 165,000, including 7,500 voluntary enlisted personnel.

It would also discontinue for the first time the yearly conscription, anchored within the country's constitution since 1955. Option No. 5, favored by Guttenberg's own party, would reduce troop levels to 210,000 and keep conscription active.

Getting rid of conscription is a move that runs contrary to his conservative party's beliefs, and the idea has sparked significant opposition.

German Chancellor Angela Merkel hasn't commented and her spokesman said she wouldn't take sides at this point, aware of the issue's controversy. The spokesman said, however, that Merkel backed Guttenberg's "new thinking," in a first careful sign of support for the defense minister's radical reform.

The coalition is to decide over the exact look of the reform at the earliest this fall, and by the end of this year at the latest.

Previous proposals have also identified significant cuts to weapons programs and military procurement, including order reductions affecting the delayed Airbus A400M transport plane, the multipurpose NH90 helicopter and the Eurofighter jet.

The savings package, which ends up hurting several industry giants, aims to help Berlin reach the target of cutting the defense budget -- $38.5 billion for 2010 -- by around $1.3 billion per year. (Note: The U.S. defense budget for 2010, including overseas operations, stands at $663.8 billion.)

Procurement cuts are to hurt the German military industry, one of the most active and successful in the world.

Companies including ThyssenKrupp, Rheinmetall and Krauss-Maffei Wegmann develop high-quality submarines, ships, armored vehicles and tanks. And European Aeronautic Defense and Space Co., a multinational giant producing all kinds of airplanes and helicopters, has a strong German profile.

earlier related report
France wants closer defence ties with Britain
Paris (AFP) Aug 25, 2010 - France wants closer defence ties with Britain and wants European powers to step up cooperation to secure the high seas, space and cyberspace, President Nicolas Sarkozy said Wednesday.

"France is ready to undertake concrete plans to allow us to accomplish the toughest combat missions," Sarkozy told an audience of French diplomats.

"I heard the declarations of our British allies on bilateral cooperation with France. We are ready to discuss this without taboo," he said, without elaborating on which projects he has in mind.

Britain and France have the two most powerful militaries in the European Union, but both are faced with tight budgets and huge public deficits which could limit their ability to fund large new projects.

Reports have suggested London may try to save money by sharing one of two new aircraft carriers it has on order with France, or timing maintenance so that either France or Britain has a carrier at sea at all times.

"Faced with threats to our vital interests we have a nuclear deterrent, which is the guarantee of our independence. But faced with new threats, the Europeans have fallen behind," Sarkozy explained.

"They must also participate in the security of the seas -- essential for our trade -- the security of space and now of cyberspace."

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