Germany has announced a plan to increase core defence spending to 3.5% by 2029. Total defence expenditure, which stands at €95 billion in the 2025 draft budget, would rise to €162 billion in 2029. The target will be reached through a series of planned annual increases.
This investment is enabled by a dedicated €500 billion infrastructure fund and the exemption of defence spending from debt rules since March 2025. If approved by the cabinet, the new regime would push back against the recent use of the ‘debt brake’ as a means of exerting political leverage over economic policy. Instead, politicians hope that the military spending splurge will help to revive the moribund German economy.
It is still unclear what share of the funding will constitute f aid to Ukraine, as Germany continues to oscillate between extending military support and seeking a diplomatic ending to the war.
While this would still fall short of U.S. President Donald Trump’s demand that NATO members spend 5% of GDP on defence, this move again places German fiscal policy at odds with its pacifist post-war constitution.
