Germany Plans 3.5% GDP Defense Budget by 2029

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    In Berlin, Germany’s Finance Minister has announced that the government intends to increase defense expenditure to 3.5% of the gross domestic product (GDP) by the year 2029. This declaration comes as part of the recent government’s budgetary plans, which were unveiled on Tuesday.

    Under the leadership of Chancellor Friedrich Merz, the coalition has successfully navigated its financial blueprint through parliament. This was achieved by bending the country’s strict regulations on acquiring debts to secure elevated defense funding, a move made even before the coalition formally assumed power last month. The decision was strategically timed before the commencement of a NATO summit on Tuesday, where there’s an agenda to boost defense expenditure goals from 2% of GDP to 3.5%, along with an additional allocation of 1.5% for potential defense-related infrastructure.

    Finance Minister Lars Klingbeil has highlighted that Germany’s military spending is set to reach 2.4% of GDP this year. He has articulated a gradual increase in defense funding, with a target to achieve a NATO quota of 3.5% by 2029. As the Vice Chancellor, Klingbeil stressed a commitment to the efficient utilization of resources, emphasizing enhanced collaboration at a European level in areas such as procurement, research, and development.

    Germany has faced longstanding criticism for its previous inability to meet the 2% defense spending benchmark. However, following the onset of Russia’s comprehensive invasion of Ukraine in 2022, the then-Chancellor Olaf Scholz promised a rise in defense spending to reach the 2% mark. Alongside this, Scholz declared the establishment of a significant 100 billion-euro modernization fund for the military.

    This initiative enabled Germany to meet the 2% defense target, although the allocated fund is projected to be depleted by 2027. Chancellor Merz has assured that the government is committed to ensuring that the Bundeswehr, Germany’s military, receives all necessary financial backing to establish it as the leading conventional force in Europe.

    Furthermore, the administration’s comprehensive strategy details an increase in total government expenditure from 503 billion euros this year to an anticipated 573.8 billion euros by 2029. Additionally, a substantial 500 billion-euro fund is being established to modernize Germany’s infrastructure over a long-term horizon of the next 12 years.