On Tuesday, the new German government approved the draft budget for the current year and the budgetary guidelines until 2029. They provide for a tripling of defense spending in five years. The government now intends to achieve the NATO objective of 5 percent of GDP for military spending and other expenses related to war by 2029 instead of 2035.
The budget of the Ministry of Defense will increase from 52 billion euros in 2024 to 153 billion euros in 2029. This represents almost 27 percent of the total budget against 11 percent so far. In addition, additional billions will be spent to develop an infrastructure compatible with the war and which promotes wars. This year alone, 8.3 billion euros were assigned to military support in Ukraine.
This armament program is funded by new massive loans. The Minister of Finance, Lars Klingbeil, already plans to contract new loans totaling 143.1 billion euros this year. By 2029, this sum should reach 185 billion euros. In total, the additional debt amounts to 850 billion euros. The burden of the German government’s debt will increase by more than half in five years, going from 1,617 billion euros (April 30, 2025) to 2,464 billion euros.
This is possible thanks to the authorization of credits of more than 1,000 billion euros in loans that the Christian Democratic Union/Christian Social Union and the Social Democrats adopted in March with the support of the Greens; And at the Bundesrat (Federal Council) also with that of the Left Party. This has exempted military spending and certain investments from debt brake provisions.
With this new important debt, the Minister of Finance Klingbeil, who is also president of the SPD, tries to delay an open confrontation with the working class. This would be inevitable if all the funds for the rearmament were immediately transferred to social spending and other budgetary positions. However, this does not mean that the population will not have to pay the price of rearmament.
The simple fact that Klingbeil has the financial margin necessary to contract new so high loans is the result of decades of social cuts. The debt brake, which sets strict limits to state loans, was inscribed in the fundamental law in 2009 specifically for this purpose. As Klingbeil pointed out, the low debt ratio of 63 percent compared to other countries now allows him to contract new important loans. What has been saved in social spending, local governments and other socially relevant areas is now paid in rearmament and war.
Given that the debt brake continues to apply to all areas outside of resetting and investment, the austerity measures will continue tirelessly. Klingbeil boasted of having rejected additional requests from his cabinet colleagues around 50 billion euros. The number of officials at the national level must be reduced by 8 percent by 2029.
There is also no solution in sight for the crisis facing municipalities. Many fear that tax reductions for businesses and rich, introduced by the government at the beginning of the month, will lead them completely to bankruptcy. The so-called “investment incentive system” allows companies to request higher depreciation and pay less tax. The corporate tax, half of which goes to the national government and the other half to the Lands, will gradually be reduced by 15 to 10 percent.
The government fills the financial crisis of insurers of sickness and dependence by loans which they will have to reimburse. Klingbeil justified it by saying that their income will increase again with the economic recovery. But this is a dairy calculation with a milk pot. Employers’ organizations and the business press are already growing in massive cuts in social spending and pensions. The government will do this at the latest when the increasing debt service will engulf a large part of the budget.
Before leaving for the NATO summit on Tuesday, Chancellor Friedrich Merz stressed that Germany did not increase its military spending “to please the United States and their president. We do this on the basis of our own views and convictions. ” This is undeniably the case. But that the stake is peace in Europe and protection against attacks supposedly prepared by Russia, as Merz said in his government declaration, is a lie.
For years, the main representatives of the German elite have required Germany to play a political and military role again that is commensurate with its economic weight. The Merz government said its objective was to make the Bundeswehr (German armed forces) the strongest army in Europe.
By the advance of NATO in Eastern Europe and its support for the 2014 coup d’etat in Ukraine, the Western powers caused a reactionary attack on the Putin regime, which was surrounded and threatened in its existence. Since then, Germany has deliberately fueled the war in Ukraine, supporting it by delivery of arms worth billions and sabotaging any negotiated solution which does not imply the complete surrender of Moscow.
For the first time, the German armed forces permanently parked a brigade in Lithuania, a key strategic location that would place them at the center of war if the conflict with Russia is intensifying.
The objective is not only the complete control of Ukraine, but also the submission and dismantling of Russia, and unhindered access to its precious natural resources. In a world increasingly dominated by conflicts between great powers, commercial wars and military confrontations, the expansion of German imperialism takes up the same direction as in the first and the Second World War, where he already occupied Ukraine and tried to subjugate Russia, then the Soviet Union.
These are the objectives that Merz, Klingbeil and the whole ruling class continue again today with their offensive for rearmament. They must be stopped. This requires the construction of a powerful international movement in the working class and among young people, which links the fight against war, social cuts and dictatorship, to the fight against capitalism.
