The new Chancellor of Germany plans record defense spending despite the 'debt brake'.

Germany increases defense budget to nearly 1 trillion euros

The future Chancellor of Germany, Friedrich Merz, is implementing a plan to increase the defense budget to nearly 1 trillion euros. This will allow for a change in defense policy strategy after a long period of limited funding. The Bundestag has already passed a bill with this initiative. According to Merz's plan, Germany will procure new weapons, including fighter jets, and will provide expanded military aid to Ukraine.

Additionally, Merz plans to create a special fund of 500 billion euros for infrastructure projects over the next decade. This plan entails revising debt restrictions so that defense expenditures exceeding 1% of GDP are exempt from constitutional limitations.

Concerns about implementing the plan and possible economic obstacles

However, there are doubts about Germany's ability to implement such ambitious proposals, especially considering that the country is not meeting NATO benchmarks for defense spending. There is a risk of significant increases in spending affecting the country's financial stability, particularly amid the economic difficulties arising from the COVID-19 pandemic.

Christian Lindner, the former finance minister, criticizes Merz's plan for increasing defense spending and easing debt accumulation restrictions. He warns of potential difficulties if Germany takes on additional debt of 1 trillion euros without corresponding economic strengthening.

Impact on relations with the United States

Changes in Germany's defense spending may matter for cooperation with the US. They have demanded that Germany and other NATO countries take on more commitments in financial and military support for the defense alliance. President Trump even urged NATO countries to spend no less than 5% of GDP on defense.

Increasing Germany's defense spending could strengthen NATO's defense capability, especially in Eastern Europe, where Russian aggression is a concern. Germany has already supported the new NATO force model, and additional funding could enhance this contribution.