Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
GERMANY’S GIANT SPENDING “bazooka” to beef up its military and modernise its infrastructure passed a final hurdle today after the government signed off on the increased spending.
Chancellor-in-waiting Friedrich Merz had voiced confidence it would pass, as it did through the lower house days earlier, with the help of the Social Democrats of outgoing leader Olaf Scholz and the Greens.
Merz has stressed the need to build up Europe’s defences against a hostile Russia as US President Donald Trump has cast doubt on the future strength of the NATO alliance.
German media have scrambled for superlatives to describe the fiscal plan, labelling it an “XXL-sized” funding “bazooka”.
The package will see strict rules around debt loosened, clearing the way for a spending surge.
The plan exempts defence spending above one percent of GDP from strict debt rules and sets up a 500-billion-euro ($545-billion) fund for infrastructure over 12 years.
All in all, it paves the way for over one trillion euros (dollars) worth of outlays in Europe’s top economy, which has shrunk for the past two years.
Merz’s top priority is to build up the armed forces as fears grow Russia could in the future threaten an EU ally, with confidence waning that the United States would come to Europe’s defence.
Germany has long been reluctant to spend big on its military, and funding dropped off sharply after the Cold War ended.
In recent years, Germany’s Bundeswehr has been mocked for equipment failures, including helicopters that don’t fly and rifles that don’t shoot straight.
Russia’s full-scale invasion of Ukraine three years ago jolted Scholz into action. He announced 100 billion euros in extra defence spending which has allowed Germany to meet the NATO target of two percent of GDP.
But much remains to be done, and the parliamentary commissioner for the armed forces, Eva Hoegl, has warned the military still has “too little of everything”.
Major orders have been placed, including for new German-built submarines, but they will take years to build and deliver.
The chief of Rheinmetall, Germany’s largest defence company, Armin Papperger, said last week that “an era of rearmament has begun in Europe that will demand a lot from all of us”.
German politicians have long complained about late trains, crumbling bridges and vast areas with poor mobile phone and internet coverage.
“We have a lot of infrastructure that dates back to the 1960s and 1970s,” says the transport ministry, which estimates 5,000 bridges need rebuilding.
On the insistence of the Greens, €100 billion will flow into a climate fund and could help pay for projects such as renewable energy and electric car recharging stations.
Experts have voiced hope the spending splurge will help kickstart an economy that has shrunk for the past two years, and boost growth in the wider eurozone.
But analysts warn that money alone won’t be the answer and call for reforms to bring down energy costs, slash bureaucracy and attract more skilled foreign labour.
“Modern infrastructure is essential for one of the world’s largest economies, but it doesn’t inherently drive innovation, sector transformation or new growth opportunities,” wrote ING analyst Carsten Brzeski.
He said “the chances of a cyclical rebound in the German economy… have clearly increased” but also stressed the need for “real structural reforms”.
Otherwise, he warned, the fiscal package “will only be a very huge flash in the pan”.
The money splurge signals a radical departure for a country famously reluctant to take on debt, fearful the repayments will burden future generations.
Aside from green-lighting vastly more borrowing for defence, the package will also allow state governments to run annual deficits of up to 0.35 percent of GDP.
Brzeski wrote that the new package meant that the debt brake “is not officially dead but buried alive”.
Merz – who during the election campaign had insisted he would stick with the debt brake – has stressed that it’s not just a huge pot of play money for politicians.
He has warned the SPD that belt-tightening will be needed elsewhere, especially in welfare spending.
German debt will increase, but experts say that at a current ratio of 62% of GDP – about half that of the United States – there is still room for manoeuvre.
To embed this post, copy the code below on your site
Germany building up it’s military….. what can possibly go wrong?
@R kelly: 4th Reich?
@R kelly: What could go wrong ‘that hypothetical’ new Germany then invading western Europe whilst the Russians invade Germany. And thus another two-front war on Germany’s hands. Sound familiar?
@Keth 417: Why would Germany invade Western Europe?
@honey badger: Many wars never need a why, just a Who. Most rules and plans affecting millions, if not billions come from a small group of people, sometimes even just an individual who thinks he knows best. Also, if I was to rejuvenate my country but needed to keep the economy working, I might invade the lesser powers. In this case not Russia, but the rest of Europe. We can see this happening already in paper and digitally with the EU, but these decisions require votes from each country state. Imagine one did not need a vote from each country to implement directives?
Don’t waste a cent on Ukraine, better off burning the money
@R kelly: surely what could possible go reich?
@Luas Vuitton – Penneys Drag Queen: Lol
@R kelly: Lots has already gone wrong in that Putin is now emboldened due to years of appeasement. The horrors of WW2 won’t be forgotten but are now 80 years ago. Germany is a different place.
@R kelly: what a bell end comment
@honey badger: It’s not like they haven’t done so before…
@Gerard Hayden: the French invaded Russia back in the day. What are you saying ?
@R kelly: protecting Europe. Hope Ireland starts to get the finger out and update our military and increase there wages
@Keth 417: good to see you being positive
I won’t pretend to be a political mathematician, but this prep for war, most probably a phony war, sounds like a way of spending Germany, and Europe as a whole, out of an economic slump. War, or the seeming threat of war, using Russian invasion as an excuse being the reason for spending. Spending will bring industry, thus employment and therefore incoming taxes. I’m reminded of Hitler doing the same thing in the 1930′s. But also reminded, unfortunately, that Mr Hitler was then compelled to go to actual war in order to keep the economy moving. WW2 got the US out of the Great Depression also. That’s my take/Open to correction.
Btw, would love to see an article addressing the EU’s plan ‘inviting’ investment of private savings.
@Keth 417:
Hard to find a translation in German for,
“Sure it will b grand”
@Keth 417: EU arming itself just as we are overrun with fighting age militants, Say good bye to your savings they’re next.
@H Woo: lol. Perhaps it will be grand. But with all of this sabre rattling, if I were in power, my first priority in the face of inevitable war would be an pan agreement to keep it ‘conventional’. No nukes. Let the economy of war, not the Big Red Button speak.
@087 bed: Well… As I understand it, it’s planned to be a voluntary scheme to invest – call me naive, lol. However, I can imagine if a war did break out or looked imminent, the voluntary would become mandatory.
@Keth 417: the Great Depression in the US started off with the financial crash of 1929 but turned into a depression due to Herbert Hoover’s disastrous introduction of sweeping “protectionist” tariffs under the Smoot-Hawley Act. This killed the economy – as protectionist tariffs usually do – and led to Hoover being obliterated when running for re-election against FDR. It was largely FDR’s New Deal policy that pulled the US out of the Great Depression and crowned JM Keynes as one of the greatest economic minds of the 20th century. The US economy had mostly healed by the time the US entered World War II, although WWII did kick-start an extended economic boom (hence the term ‘boomers’ for children born in the next couple of decades). Alas, history has a habit of repeating itself…
@Keth 417: well I won’t be investing in any instruments of death and destruction I can assure you. My money is staying in bonds and tobacco stocks.
@Kevin Collins: I stand somewhat corrected then. Thanks for this data, sincerely. Hoover huh? Dam! And ‘Boomers’…. Good to know the origins. Thanks again.
@George Bowling: They’ll start by calling them ‘Voluntary investments’, then they may transmute into ‘Mandatory War Bonds’. Ahh…who knows. I wanna know what’s the payoff per investment? That’s why an article examining this topic would be interesting.
@H Woo: Alles klar, wunderbar.
@Athena: it sounds nice,how much is the pint.
@Keth 417: Germany are not using the Russian invasion of Ukraine as an “excuse” for spending big on military. If that were the case they would have started a few years ago when the war began. The fact that the US under Trump is no longer a trusted ally, evidenced by their pro Russian stance in “negotiations” and his continued aggressive rethoric that Europe is ripping off the US and they don’t pay their share in NATO.There is truth in the latter part, but that is largely predicated by US policy for decades..with the goal to remain the top dog as a military force. This is a consequence of the US abandoning its longstanding geopolitical position.Trump is ushering in another era of “might is right”, the age of reasoned diplomacy is over. Of course Germany/ Europe needs to respond accordingly.
@Keth 417: or they can invent a digital currency and see where that takes them
@Brian: Yes, agreed, there is that. The US pulling out does help though. Greases the wheels, so to speak.
@Brian: Germany literally did start spending big “using the Russian invasion as an excuse” as soon as the Russia invaded. It’s in the article
@Keth 417:
Hopefully the mutual destruction factor means something.
@H Woo: Try „Wird schon schief gehen!“
This has the appearance of a giant slush fund. There is no plan or costings of how this money is to be spent. (How do you create an MIC?) The number was just plucked out of thin air. There is no analysis of the actual problems and their causes. Just throwing money at something is never a good idea although the right people will do very well. Germany has a serious corruption problem ( Berlin Airport etc.).
@Des Hanrahan: germany is not throwing money, they realized who and what is international war criminal putin is. They realized that trump is selling nato and eu to putin , so there is nobody to defend eu other than eu countries themselves. putin will not stop on Ukraine. russia is mass producing arms and weapons and with a full arsenal they are going to advance further Ukraine.
@Lei tatt: I cannot help but feel that this is old, even stale news. It altogether sounds far too simplistic, even smacks of vain glory on Putin’s part. We live in a multi-layered world with hidden deals and plans within plans. If I were Putin, I would be glad of a deal excluding Ukraine from joining NATO, thus utilising Ukraine as a neutral zone, and retaining a moderate and rich amount of Ukraine as a bonus. Perhaps Russia might learn the lessons of Hitler and Napoleon overreaching their grasp, lest Europe become Putin’s Stalingrad?
@Lei tatt: stop dreaming, how is Russia going to control 400 million plus in Europe with 150 million and add the USA with 350 million that’s 750 million against 150 million, if you exclude older people, kids and people with physical disabilities you could have 400 million against 90 million. But if they join up with china, well we’re goosed then, say Goodbye to 95% of all living things.
@Des Hanrahan: Regarding the argument that Russia is going to invade Europe . This is crazy . There is nothing in Europe that Russia either needs or wants . At this stage Russians detest Europeans ; not because of the support for Ukraine or the sanctions but because of the racism and want to have as little to do with us as possible . The war in Ukraine started because of a particular set of circumstances starting in 2014 . There is no point or benefit in Russia attacking Europe .
@Lei tatt: doubt there’s any appetite for that given the current slaughter
A new prison for the AfD.
Germany is arming again. I bet the Poles are getting worried.
@Ichabod Crane:
Poles are arming themselves to the teeth, they have experienced the “Socialists” in the past and have no intention of living under its jackboot again.
@H Woo: so have former East Germans
@H Woo: Socialism and communism are two different things. *sigh*
@Jacintha Dumbrell: They are two cheeks of the same posterior!
@Ichabod Crane: the Poles have been re arming themselves on a large scale for over a decade now, they probably have one of the largest standing armies in Europe at the moment, and it all started with Russian aggression into Crimea, nothing to do with Germany.
@Jacintha Dumbrell:
People who believe that, are the first in to the Gulags. When they start shouting ” This is not what it says in the book”.
Lads and Lassies, is WWIII starting? Because I ain’t go out joining no EU Army.
@Tommy: not if you’re 12, no.
@Tommy:
No worries,
IQ of 86 or above.
Us Germans aren’t all smiles and chocolates you know.
@Paddy Ryan:
First we do the work then we have das laughs.
@Paddy Ryan: are you from the land of chocolate???
Russia has no interest in Europe, I’d wish they would grow the fk up. Why would Russia pick a fight with a population of 400 million Vs 150 million how could they control that many people plus you would have the USA step in. This warmongering is ridiculous. It’s these weapons companies with their trillions in the pockets of politicians to keep the money flowing by creating more wars.
@brendan C5: Shoigu is currently in North Korea. You should watch RT, read Tass and Russian social media (a lot of stuff ends up on Telegram). You might get a better idea of what is going on in Russia. Certain European states have every reason to be worrried. Even at the thin edge, how would you fancy living in Hungary (and not on a weekend break).
@brendan C5: Here’s a theory:
1. The EU some years ago knew the European economy is going down the tubes.
2. They provoke Russia by befriending Ukraine via the promise of EU and NATO membership.
3. Russia angy, Russia invades Ukraine, thus giving Europe (EU) the chance to spread fear and enact new laws and new spending – not to go to war with Russia, but to get itself out of recession.
I know… it sounds ludicrous, insane, unbelievable. I don’t even believe it. But maybe it’s where we are.
@Keth 417: what algorithms are you on!
@Keth 417: Unbelievable. Straight from russian propaganda tv.
@Keth 417: Now that’s pure Russsian propaganda right there. Congrats!
@Ian: Ironically, it suits both Russia and the EU. Unfortunately, Ukraine is the patsy or the fall guy, some might argue.
@Alan: Just proposing it, not that I believe it, as stated. But look… It’s working. The EU have the perfect excuse to spend, enact new laws and powers etc. This possible new greater war, even the prep has been called ‘The new Covid’.
@brendan C5:
One country at a time.
Helmut Mór and friends busy commenting on military hardware. They couldn’t even finish the Airfix 1/72 Spitfire Vc mammy got them.
As an Irish man, I’m envious of this German commitment to the safety of its own country.
Step up FF/ FG.
@Toyo Ke: I hope out German comrades invest heavily in weapons and defence. We must stand up and fight fight fight!!
@Buster Lawless:
After all the Germans are our Glorious Allies in Europe according to Paddy Pearce and the 1916 Proclamation
@H Woo: How could he, and being executed and everything for it, oh, somebody needs to learn their history, no problem preaching about an Irish regime that executed more Irish men than Britain did during the War of Independence. Those who do not learn their history are doomed to repeat it.
@Brian D’Arcy:
?
I’m delighted.
We need a stronger military in Europe swing as Putin now controls the USA.
@Fergus O’Donnell: seeing as. Darn autocucumber
@Fergus O’Donnell: you live in fairytale land….be careful for the reds under the bed too….the military industry doesn’t even bother with new propaganda to rob taxpayers money.
@Dere:
Thank God the Wests military industry complex makes far superior weapons then the Kremlin.
I can’t wait to see all the commenters flocking to this post especially the ones who know nothing about European politics
@Machine Learning IRE: sausages
@Del Ray: German sausages are the würst.
@Machine Learning IRE:
The usual anti Western Democracy peace loving communist losers will be walking up soon, stand by.
@Fergus O’Donnell: I thought that was a Larry Betts comment for a minute there:-)
@Fergus O’Donnell: Are they brat?
Well done to Friedrich Merz for taking charge and making sure that Germany step up to the plate when it comes to defence spending. He’s been great as Leader of the CDU so far and will make a superb Chancellor when he’s officially confirmed in a few weeks. For too long, Germany has been freeloading off America and NATO when it comes to defensive protection and with Russia continually increasing their aggression towards Europe, it’s crucial that Germany reaches 2% of GDP for defence spending. By reducing welfare handouts, cutting energy subsidies and reforming pension benefits, Merz is a rare example of a politician who has actually laid out how he’s going to pay back any of the money which is being borrowed. It’s time for other EU countries, including Ireland, to follow Germany’s lead.
@William Jennings: you do know that until recent years that Germany has been highly restricted to the size and spending on its military since WW2, the last British Troops pulled out in 2020, the US still has about 40 military installations in Germany, so freeloading is a strong term to use against the restrictions placed upon Germany in this regard.
@Andrew Giles: Well I didn’t see any mainstream political parties up until now calling for Germany to bolster its military capabilities and all of them have been more than happy to let America do the protecting for them. Germany only has 180,000 active soldiers. America has 35,000 soldiers in Germany alone. I’m not objecting to the American soldiers there, I’m just saying that they should compliment rather than take charge of Germany’s military. When Germany was reunited 35 years ago, they could have immediately set out to improve their army but they chose to accept help from foreign countries like the US and the UK instead.
@William Jennings: they didn’t choose to do anything, they were still under restrictions stemming from WW2, They weren’t allowed to improve their army, simple as that.
I beginning to wonder if Palestine and Ireland have a connection,i mean why so many articles?christ the proddie lads flew a flag and then the lads in Derry flew a Palestine flag and here we are thinking that they are an Irish state or something.any articles about the Christian’s being massacred in the country’s that we don’t mention ?
@Altoir:
The Orish Left do not give a grit about the sand pikies, its all about America.
Germany and U.K. are the two we need to firmly support. Thos is a major deterrent for the autocrats east and west who are determined to destroy democracy, peace and our shared European values.
@Argus Romsworth: France and UK. Can’t trust the Jerries. They don’t like it up ‘em either (ooooh saucy).
@Luas Vuitton – Penneys Drag Queen: Don’t Panic, don’t panic Mr Mannering! But the Hun do have exceedingly good tailoring.
@Luas Vuitton – Penneys Drag Queen: Germany has lead the way for our shared European values for many decades. They are most certainly the main one to follow and encourage to lead.
Weapon that will cripple Russia and kill Putin and his warmongers are unfortunately now necessary.
@thomas molloy: it’s the west that are the warmongers, who has been going west with a war organisation called NATO for the last 70 years. And a weapon that will cripple Russia, I think you’ll find Russia already has them in the form of nuclear and hypersonic missiles that can carry nuclear.
@brendan C5:
Nobody is forced to join NATO.
The counties that were under the Communist jackboot have no wish to be enslaved again by the Kremlin.
Putin is not a threat to Europe .this is a manufactures lie to enrich the elites and the industrial military complex.
The only way europe is going to fund this military expansion is by private in vestments from peoples deposit accounts now this will not go down well with EU citizens so they will have to conjoure up a threat “PUTIN THE BOGEYMAN ” to instill fear and hatred of Russia .what young man in europe would be stupid enough to join the military inorder to enrich the global elite’s
@Vincent Hickey:
Comrade, You are fooling no one.
A major tidal change and hopefully greater euro alliance.
Terrible that Europe has to spend billions on the war machine just because of one dictator in Moscow.
Billions need to be spent elsewhere not enriching arms companies. Crazy world we live in.
So we’ve been doing nothing. I was in Russia 10 years ago and we were intimidated by a lady border patrol. It wasn’t nice and we were a little scared. We laughed it off, we’re not laughing anymore. Russia has been growing since the 14th century if not before that . What I find strange is the total lack of awareness by the rest of the world about this issue. We were in the Hermitage museum and what
a spectacular sight to see. Yet I couldn’t ignore the
terrible sight of the downtrodden Russian I saw everywhere. It was very sad to see.
I hope that will change soon. But I doubt it.
Regards
Ken Byrne
They could start by selling off all those fax machines that the civil service relies on
Germany is already the E. U.s pay master and is the worlds second biggest exporter of goods . Everyone knows that the only opinion that matters in Europe is germanys and of course deutschlands uriah heap (france).
have your say