Germany pledged to increase defense spending — now it needs to follow through

German Defense Spending Trends: A Historical Perspective

For much of the Cold War, West Germany’s army, the Bundeswehr, was seen as the most capable ground force among European NATO allies. This reputation was founded on a combination of professional training and significant defense funding, which peaked at over 3% of its GDP by 1988. As the largest economy in Western Europe, West Germany’s defense budget outstripped that of all NATO members aside from the US, UK, and Turkey.

After the Cold War ended, however, German defense spending sharply declined, a trend that has persisted. The emphasis on integrating East Germany’s population and managing its welfare system left little room for defense concerns. As a result, spending fell below 2% in 1992 and further dropped to 1.07% by 2005. While it rose to 1.2% that year, it remained low.

This reduced budget led to a significant decline in military readiness. By 2010, many of the German Army’s leopard tanks were out of commission, either stored or undergoing maintenance. The Air Force faced shortages of parts for its Tornado and Eurofighter jets. Meanwhile, the naval capabilities were aging with limited options for upgrades.

In a 2011 speech, Defense Secretary Robert Gates expressed concern about declining European defense capabilities, cautioning that future US leaders may question the value of NATO investments. The situation did not substantially change even after Russia’s annexation of Crimea in 2014, nor with NATO’s reaffirmation of a 2% spending goal at the Wales Summit that same year. It took until 2022, after Russia invaded Ukraine, for Germany’s defense spending to really begin to rise.

Shortly after the invasion, German Chancellor Olaf Scholz delivered a speech marking a “turning point,” announcing a special fund of 100 billion euros for military investment. He promised that Germany would increase its defense spending to over 2% of GDP. By early 2024, Germany indeed reached the 2% threshold and even rose to 2.4% that year.

Following Scholz’s administration, Friedrich Merz was elected in May after Scholz’s government lost in the December 2024 elections. Merz proposed a sharp increase in defense spending, aiming at over 3.5% of GDP by 2029, significantly surpassing previous levels.

While Merz’s plan is welcomed, it remains uncertain whether he can deliver. The German public is understandably uneasy about Russia’s actions in Ukraine and, so far, hasn’t reacted negatively to government proposals. Yet, maintaining social welfare programs, which have long benefitted Germans, may prove challenging. Any cuts or alterations could lead to backlash against increased defense funding.

Additionally, Germany is likely to continue purchasing US defense products, currently estimated at around $15 billion, despite overall unpopularity of the US in Western Europe. It’s unclear if the new government under Merz will manage the pressures that lie ahead. One can only hope for a successful outcome, as Germany plays a vital role in NATO’s deterrence strategy against Russia, a country whose ambitions in Central Europe have raised significant concerns.