Germany approves massive spending package to boost defense

BERLIN – German lawmakers passed a mammoth spending plan Tuesday that could allow for as much as $1 trillion in defense and infrastructure investments over the next decade.

The package amends the country’s constitution to relax strict limits on debt that have long constrained German spending, as European countries, questioning the reliability of U.S. commitments under President Donald Trump, rush to strengthen their defenses. It’s part of a push to rearm across the continent, where leaders are seeking to prepare for Russian threats and American unpredictability.

The temporary U.S. suspension of Ukraine aid following the Oval Office clash last month between Trump and Ukrainian President Volodymyr Zelenskyy prodded German officials to accelerate a rethink of the country’s tightly drawn purse strings.

European Commission President Ursula von der Leyen said Tuesday that the continent should aim to “have rearmed and developed the capabilities to have credible deterrence” in the next five years.

Claudia Major, a senior vice president of the U.S.-based German Marshall Fund, said the vote shows the threat Germans see in an aggressive Russia and a retreating U.S.

“If you consider the amount of money Germany is putting there – Germany, a country that is so addicted to a balanced budget – that shows how seriously the incoming coalition is taking the current challenges,” she said. “This is about survival.”

Under the plan approved by the Bundestag, defense spending above 1 percent of gross domestic product would be exempted from Germany’s constitutionally enshrined debt brake. Proponents of the brake, which limits the structural budget deficit to 0.35 % of GDP except in emergencies, cherish it as a pillar of Germany’s signature fiscal responsibility. Critics call it a fiscal straitjacket.

Lawmakers also approved a $533 billion infrastructure fund. Financed by borrowing, it’s to be invested in Germany’s crumbling infrastructure over the coming 12 years in the hope of boosting a stagnant economy.

“The special fund for infrastructure and the defense package are linked because total defense obviously requires functioning infrastructure,” Major said. “If your tank, your rocket launcher or your soldier is not able to move to the eastern flank in Poland because a bridge or train is breaking down, then you have an issue, to put it mildly.”

The European Commission, the European Union’s executive branch, will propose establishing a mechanism for joint purchasing of weapons to help the bloc’s 27 nations pool demand and reinforce stocks, von der Leyen said Tuesday. The proposal, one of several to encourage a military spending spree, is to be hashed out by EU member states.

European countries “need to be able to fully rely on European defense supply chains, especially in times of urgent need,” von der Leyen said. “A European market would deliver that.”

The German vote Tuesday sends a “very clear message” that the country “is determined to invest massively in defense,” she said.

The vote followed a heated debate in the Bundestag. The loudest criticism came from the far left and the far right.

Members of the leftist-populist Sahra Wagenknecht Alliance were reprimanded by Bundestag Vice President Petra Pau for holding up banners bearing the words “1914 as in 2025: No to war loans.”

Friedrich Merz, expected to be Germany’s next chancellor, said such huge sums of debt can be justified only under “very extraordinary circumstances.” He told lawmakers the criteria have been met.

“The circumstances are determined above all by (Russian President Vladimir) Putin’s war of aggression against Europe,” Merz said. “Our friends in the EU are looking to us just as much as our adversaries,” he added, and the package was the “first major step toward a European defense community.”

Merz’s conservative Christian Democratic Union and its sister party, the Christian Social Union, having won a plurality of seats in last month’s federal election, are holding coalition talks with the Social Democratic Party.

The likely coalition partners were keen to push the changes through the outgoing parliament Tuesday, as attaining the required two-thirds majority, with the help of the Greens, was more feasible in the current constellation. Once the newly elected parliament convenes – no later than March 25 – their majority will be lost to electoral gains by the far-right Alternative for Germany and the Left party. Both parties oppose the changes.

In a concession to the Greens, the conservatives and the Social Democrats agreed that just more than $100 billion from the infrastructure investment fund would be directed to climate-related projects. The defense spending exemption was expanded to cover funding for civil defense, intelligence agencies, cyberdefense and aid for Ukraine.

“This is about total defense,” Major said. “It’s a larger understanding of security and defense – not only military – because the threats to Germany, the threats to Europe, are not only military. They are also in the gray zone,” such as sabotage and disinformation, she said.

A survey of German voters published by Infratest Dimap this month suggested that public support for more defense spending is also high. According to the poll, 66% said they were in favor of more defense spending; 20% said it should stay the same, while 11 % said Germany should spend less on defense.

The defense deal opens the way for Germany to release an additional $3.3 billion in support for Ukraine, bringing the total aid for 2025 to $7.3 billion. Germany is the second-largest provider of military and financial aid to Ukraine after the U.S.

The Bundesrat, Germany’s upper house of parliament, will vote on the package Friday.

For years, Germany was lambasted by the U.S. – particularly the first Trump administration – for failing to spend 2 percent of its annual economic output on defense. Only last year, under outgoing chancellor Olaf Scholz, did the country reach the NATO goal for the first time since the Cold War, mostly on the back of a special fund of 100 billion euros. The fund was announced days after Russia’s invasion of Ukraine three years ago to boost the country’s mothballed Bundeswehr, or armed forces. It is set to dry up by the end of 2027 – two years before German Defense Minister Boris Pistorius said the country should be “fit for war.”

At an air base near France’s border with Germany on Tuesday, French President Emmanuel Macron announced that his country would order more Rafale fighter jets and invest 1.4 billion euros (about $1.53 billion) in upgrading the base to host two squadrons equipped with nuclear missile technology, making it part of the country’s deterrence by 2035.

EU leaders are set to discuss defense and Ukraine plans when they meet Thursday in Brussels. Earlier this month, they endorsed plans to unlock hundreds of billions of dollars in extra defense spending in the coming years. While decisions will ultimately be up to individual states, the EU plans include a $150 billion loan program for investments – such as in air and missile defense, artillery and drones – and some loosening of fiscal rules for defense spending.