Germany’s finance minister announced on Tuesday that the country aims to increase its defense budget to 3.5% of gross domestic product by 2029 as part of new government spending plans.
Before officially taking office last month, Chancellor Friedrich Merz’s coalition passed legislation easing debt limits to allow for higher defense spending. This move comes ahead of a NATO summit where member countries are expected to raise the defense spending target from 2% to 3.5% of GDP, with an additional 1.5% potentially dedicated to defense-related infrastructure.
Finance Minister Lars Klingbeil stated that Germany’s defense spending will reach 2.4% of GDP this year and pledged a gradual increase to meet the 3.5% NATO target by 2029. Klingbeil, who also serves as vice chancellor, emphasized the importance of spending funds efficiently, including fostering greater European cooperation on procurement, research, and development.
Germany had long faced criticism for missing the 2% defense spending goal. After Russia’s full-scale invasion of Ukraine in 2022, former Chancellor Olaf Scholz committed to raising defense expenditure to 2% and established a special modernization fund worth 100 billion euros ($115 billion). This fund helped Germany meet the 2% target but is expected to be depleted by 2027.
Merz has promised that the government will fully finance efforts to transform the Bundeswehr into Europe’s strongest conventional army.
More broadly, the government plans to increase overall spending from 503 billion euros this year to 573.8 billion euros by 2029. Additionally, a new 500 billion-euro fund will be created to improve Germany’s infrastructure over the next 12 years.
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