On March 19, 2025, the Bundestag, Germany's lower house of Parliament, made a landmark move by approving a constitutional amendment to exempt military spending from federal debt rules. This decision received overwhelming support, with 517 votes in favor and only 207 against. The reform signifies a significant shift in Germany's defense spending policy, which has been notably restricted since the end of the Cold War.
The newly passed law allows for military expenditures to exceed the constitutional debt brake, a rule that has limited federal borrowing to 0.35% of the GDP. With this change, Germany aims to allocate billions to boost its armed forces and contribute to a pan-European defense fund, highlighting a growing urgency in response to shifting geopolitical dynamics.
Friedrich Merz, the leader of the Christian Democratic Union (CDU) and expected future Chancellor of Germany, emphasized the necessity of this decision during the parliamentary debate. He stated, “We have felt a false sense of security during the last decade.” Merz framed the reform as a pivotal step towards establishing a new European defense community and strengthening ties with countries beyond the European Union.
The backdrop to this decision is largely attributed to two factors: the ongoing Russian invasion of Ukraine and the potential return of Donald Trump to the White House in the United States. Merz expressed concern over the reliability of U.S. commitments to European defense, particularly in light of recent comments by Trump that suggested a withdrawal from NATO obligations. He remarked, “We need to act quickly,” showcasing the sense of urgency felt by German and European leaders.
Prior to this legislative change, Germany's military spending had drastically declined from 2.53% of its GDP in 1989 to a mere 1.32% in 2021. In recent years, however, Germany's defense budget has begun to rise, with a reported increase of 23.2% last year alone, contributing to a broader trend of increased military funding across Europe, which saw an 11.7% bump in defense spending.
The Kiel Institute reports that European nations collectively contribute only 0.1% of their wealth to aid Ukraine's defense efforts, which is marginally less than the 0.15% provided by the United States. This discrepancy highlights the urgent need for Europe to augment its military capabilities to effectively counter threats, particularly in the current climate of heightened tension.
Merz underscored that if Europe wishes to compensate for its defense shortfall, it must double its contributions to 0.21%. He noted that a significant amount of military supplies to Ukraine, including 86% of its rocket artillery and 82% of its howitzer ammunition, comes from the United States, which poses an asset vulnerability for Ukraine's defense should U.S. support waver.
In addition to bolstering military capacities, the German Parliament's recent approval carries implications for massive infrastructure investments. Alongside defense funding, parliamentary leaders agreed to allocate credits totaling up to 500 billion euros towards transportation, energy networks, schools, sports facilities, and climate protection initiatives over the next twelve years. These measures indicate a commitment to not only military readiness but also enhancing the quality of life for German citizens and ensuring sustainability.
Votes against the reform came primarily from opposition parties, including the far-right Alternative for Germany (AfD) and the left-wing parties, which raised concerns regarding the increased military spending and the historical context of German militarization. During the heated voting session, protesters highlighted these concerns, unfurling banners that read, “No to war credits,” a nod to Germany's historical military past.
The upcoming approval from the Bundesrat, Germany's upper house, is anticipated to be a formality, paving the way for the reforms to be fully enacted. As Europe grapples with the implications of a more assertive German military posture, the question looms—will this new direction redirect the continent's defense strategies?
Marking a watershed moment for Germany and Europe alike, this parliamentary decision signifies a critical juncture in military policy, irrevocably shifting the narrative of defense funding and prompting debates surrounding Europe's reliance on U.S. support for its security framework.
