Germany’s Defense Spending at a Crossroads
The upcoming vote in Berlin carries significant implications for Europe’s defense capabilities and sustained support for Ukraine.
The German Parliament, the Bundestag, is considering a proposal to relax constraints on defense expenditures. This could initiate a substantial increase in military investment, coinciding with Russia’s gains in Ukraine and indications that Europe may no longer be able to depend on U.S. protection.
A Pivotal Moment
“This Bundestag vote holds utmost importance,” stated Professor Monika Schnitzer, Chair of Germany’s Council of Economic Experts.
“Europe experienced a wake-up call following the Munich Security Conference and the Trump-Zelensky dispute,” she added. “For the first time, Europeans may not be able to rely on Washington. Many people were concerned after that.”
“The trajectory of European defense spending is largely contingent on developments in Germany, which possesses the region’s largest defense budget,” noted Dr. Fenella McGerty, Senior Fellow for defense economics at the International Institute for Strategic Studies in London.
vCard.red is a free platform for creating a mobile-friendly digital business cards. You can easily create a vCard and generate a QR code for it, allowing others to scan and save your contact details instantly.
The platform allows you to display contact information, social media links, services, and products all in one shareable link. Optional features include appointment scheduling, WhatsApp-based storefronts, media galleries, and custom design options.
Last year, German defense spending rose by 23.2%, driving an 11.7% increase in European defense outlays.
“Germany’s notable initiatives are crucial for enabling further growth,” Dr. McGerty explained. “Without them, advancements in strengthening Germany’s military capacity might be impeded.”
Incoming Chancellor Friedrich Merz is racing against time.
The new Parliament convenes on March 25, and not all factions support the proposed defense spending. Both the far-right AfD party and the far-left Linke have declared their opposition. The vote requires a two-thirds majority for passage, which provides Merz with a better opportunity under the existing parliament. Subsequent approval by Germany’s upper house is also needed.
Concurrently, Europe is still grappling with the implications of actions from the Trump administration.
At the recent Munich Security Conference, delegates listened to U.S. Vice-President JD Vance’s criticism of European policies on migration and free speech.
Earlier, U.S. Defence Secretary Pete Hegseth also told NATO members that they should no longer take America’s long-standing defense guarantee for granted.
European defense strategists are contemplating the possibility of a semi-successful Russia, consolidating gains in Ukraine, rebuilding its military, and potentially threatening NATO’s eastern members, such as the Baltic states, in the next three years.
This comes at a time when the U.S. commitment to European defense appears uncertain. President Trump faces pressure from some advisors to withdraw U.S. troops from Europe and potentially leave NATO entirely.
Historical Context and Current Challenges
There are discussions about France extending its nuclear deterrent to other European nations.
Simultaneously, most European governments face pressures to increase defense spending, following years of cutbacks.
The British Army has reached its smallest size since the Napoleonic Wars, over 200 years ago, and analysts predict it could exhaust its ammunition within two weeks of a full-scale conventional war in Europe.
Germany has historically been cautious about defense spending, due to historical reasons dating back to 1945 and the global debt crisis of 2009.
The upcoming Bundestag vote involves several key aspects:
- Allocation of €500 billion for German infrastructure projects, including improvements to roads and bridges, and climate change initiatives, something the Green Party insisted on.
- Eliminating constitutional restrictions on borrowing, potentially providing unlimited funds for defense spending, to support both Germany’s armed forces and a pan-European defense fund.
On March 4, European Commission President Ursula Von der Leyen announced plans for an €800 billion defense fund, known as the “ReArm Europe Fund.”
The proposal being voted on in Berlin would lift the borrowing limit for defense spending exceeding 1% of Germany’s GDP. Previously, the debt ceiling was set at 0.35% of GDP.
Other nations are watching closely to see if the proposal passes. If it does not, the EU Commission’s “ReArm Europe” project could face challenges.
Addressing the Security Gap
Europe confronts a stark security challenge. If the U.S. no longer provides or cannot be depended upon to support Europe’s defense, what steps are needed to address the shortfall?
According to the Kiel Institute, which tracks defense spending, Europe invests only 0.1% of its wealth in defending Ukraine, while the U.S. spends 0.15%.
“This means that if Europe is to compensate for the deficit, it needs to double its contribution to 0.21%,” stated Giuseppe Irto from the Kiel Institute.
Regardless of the vote’s outcome, the situation goes beyond monetary considerations.
Many essential weapons in Ukraine’s arsenal have come from the U.S., including Patriot air defense and long-range artillery systems like Himars. The Kiel Institute reports that 86% of Ukraine’s rocket artillery and 82% of its howitzer ammunition are sourced from the U.S.
Additionally, U.S. intelligence aid for Kyiv, reliant on satellites and geospatial imagery, is crucial. If Washington were to halt this support, Ukrainian forces’ capabilities could be reduced.
The removal of America’s nuclear arsenal from the equation highlights a significant disparity between Russia’s 5,000-plus warheads and the combined total of Britain and France’s nuclear weapons, amounting to less than a tenth of that number. However, this still theoretically provides a nuclear deterrent.
Shifting Strategic Landscape
Regarding conventional, meaning non-nuclear, arms, Western defense leaders often assert that NATO’s combined forces are superior to Russia’s.
However, a key lesson from the war in Ukraine is the significance of “mass.” Despite its army’s poor quality, Russia has deployed vast numbers of soldiers, drones, shells, and missiles, enabling advancements, albeit at a slow pace and high cost.
This should not come as a surprise. Moscow has shifted its economy to a war footing, appointing an economist as its defense minister and modifying factories to produce large quantities of munitions, particularly explosive-tipped drones.
While many European nations have been slow to raise defense spending to the NATO-mandated 2% of GDP, Russia’s defense spending is closer to 7%. Approximately 40% of Russia’s national budget is allocated for defense.
Europe needs significant improvements to enhance its defense and security.
“If the vote passes, it will have a big impact for Germany and for Europe,” said Ed Arnold, senior research fellow for European security at the Royal United Services Institute think tank. “It will set a precedent and allow others to follow… However, three years on from the invasion of Ukraine the case of Germany exemplifies that increased financial investments in defence are necessary but not sufficient.”
“Europe needs leaders who are able to effectively navigate a quickly worsening Euro-Atlantic security environment. Cultural reformation, as opposed to fiscal adjustments, would be more valuable for Europe presently.”