Germany is pushing hard for a major increase in defense spending in the E.U.’s next multi-year budget, in an ambitious about-turn on its post-Cold War security policy. The push comes amid shifting geopolitical sands and a groundswell of momentum across Europe for action to strengthen collective defenses.
For decades, Germany was leery of military spending. But recent global events have created a “Zeitenwende,” or turning point — Germany is now the world’s fourth largest spender on its military. Its defense spending has increased, rising toward NATO’s 2% GDP target, with a further massive push from a special fund of €100 billion that was set up in 2022.
“Even German Defense Minister Boris Pistorius has shown readiness to progressively increase defense expenditure to 5 percent of the GDP every year over the rather long period of five to seven years, a vast leap compared to what is being spent now.
This re-focus on defense is not even entirely national: Germany is promoting closer European cooperation and joint funding. The EU’s discussions focus on how to bring together national defense efforts in a more coherent European approach.
The European Commission unveiled the “Rearm Europe” plan with the objective of raising €800 billion for defence through means such as the new “Security Action for Europe” (SAFE) instrument and the €150 billion in loans it would provide to member states in order to be able to make joint purchases.
Germany’s push for defense prioritization inside the EU budget follows the EU Parliament adjourning to call for 2026’s budget to emphasis on strategic preparedness, security and economic competitiveness.
Ways to do this include an “EU defence spending shortfall levy” that would encourage states spending below a certain level on defence to contribute more to the common budget. This would funnel billions of dollars every year into cooperative mutual security, serving to level the burden.
In summary, the aim is to build up greater strategic autonomy for Europe, to rely less on external support for defence. Despite remaining issues to resolve on both the complex fiscal rules to navigate and investments that need to be better coordinated, Germany’s determination underscores Europe’s shared ambition to strengthen its defense industry base and its security in an ever-more uncertain world.
