Germany's likely next government seeks higher defense spending as doubts
rise about US commitment
[March 05, 2025]
By GEIR MOULSON
BERLIN (AP) — The prospective partners in Germany’s next government said
Tuesday they will seek to loosen the nation’s rules on running up debt
to allow for higher defense spending, an issue of growing urgency as
doubts increase about the United States' commitment to European allies.
They also said they will seek to set up a 500 billion euro ($533
billion) fund to finance spending on Germany’s often-creaking
infrastructure over the next 10 years to restore the economy — Europe's
biggest, which has shrunk for the last two years — to “a stable growth
course.”
‘Whatever it takes’: Strengthening defense
Center-right election winner Friedrich Merz, who is trying to form a
coalition government with the center-left Social Democrats of outgoing
Chancellor Olaf Scholz, said the two sides will propose exempting the
spending of more than 1% of gross domestic product on defense from rules
that limit the government’s ability to borrow money.
He said they will bring the proposals for that and the infrastructure
package, which will be financed by loans, to Germany’s outgoing
parliament next week. Recent weeks have brought new urgency to efforts
to further strengthen the country's long-neglected military.
“In view of the increasing threat situation, it is clear to us that
Europe — and with Europe, the Federal Republic of Germany — must now
very quickly make very big efforts, very quickly, to strengthen the
defense capability of our country and the European continent,” Merz told
reporters.
“We are counting on the United States of America standing by our mutual
alliance commitments in the future as well,” he said in a reference to
NATO. “But we also know that the funding for the defense of our country
and alliance must now be expanded significantly.”
Merz cited “the most recent decisions by the American government” as one
factor. He didn't offer specifics, but appeared to be referring to
Washington's dramatically shifting stance on Ukraine.
“'Whatever it takes' must also go for our defense now, in view of the
threats to our freedom and to peace on our continent,” Merz said.
Merz has long been committed to the trans-Atlantic military and
political alliance. After his Union bloc won Germany's election last
month, he said an “absolute priority” would be to strengthen Europe “so
that we can really achieve independence from the U.S. step by step.” He
said Trump administration comments suggest “the fate of Europe is
largely indifferent to the Americans."
Shortly after Russia launched its full-scale invasion of Ukraine in
2022, Scholz pledged to increase Germany’s defense spending to the
current NATO target of 2% of gross domestic product and announced the
creation of a 100 billion euro special fund to modernize the military.
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From left, Markus Söder, Chairman of the CSU and Minister President
of Bavaria, Friedrich Merz, candidate for Chancellor of the CDU/CSU,
Chairman of the CDU/CSU parliamentary group and Federal Chairman of
the CDU, Lars Klingbeil, Chairman of the SPD parliamentary group and
Federal Chairman of the SPD, and Saskia Esken, Party Chairwoman of
the SPD, hold a press conference in Berlin, Tuesday, March 4, 2025.
(Carsten Koall/dpa via AP)
Germany met that target thanks to the fund, but it will be used up
in 2027.
“We are just as unsettled, and just as concerned, as large parts of
our population,” Bavarian governor Markus Söder, a leading
conservative ally of Merz, said of the changing U.S. stance.
Germany's ‘debt brake’
Germany's "debt brake” allows new borrowing worth only 0.35% of
annual gross domestic product, though it can be suspended for
emergencies that are out of the state’s control. It was suspended
for three years after the COVID-19 pandemic started in 2020.
Both legislative proposals will require a two-thirds majority in
parliament as the “debt brake” is anchored in Germany's
constitution.
That could be complicated in the newly elected German parliament,
where the far-right Alternative for Germany and the hard-left Left
Party have a little over one-third of seats between them.
Alternative for Germany portrays itself as a staunch defender of the
“debt brake.” The Left Party opposes it but is skeptical about
military spending.
But until the new parliament convenes, expected in late March, the
old one remains in place. The prospective coalition partners will
still need support from at least one of the environmentalist Greens
and the pro-business Free Democrats to get their plans approved. The
latter swiftly criticized plans to run up more debt.
The Social Democrats' co-leader, Lars Klingbeil, said his party and
Merz's conservatives also agreed in the longer term “to rework the
‘debt brake’ by the end of 2025 to enable more investment.”
Merz said the parties believe the planned infrastructure package
will “also trigger private investment on a large scale.” He said
quick improvements to Germany's competitiveness also will be needed.
The two sides have to reach agreement on many other issues before
they can be sure of forming a coalition, but there's no other
politically plausible combination of parties that could form a new
government.
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