Germany Commits to 3.5% Defense Spending by 2029

Chancellor Merz’s Coalition Pushes Long-Term Military Funding as NATO Increases Pressure

Tone & Political Bias: Moderately Right-Leaning

Why: The article highlights military buildup, debt-rule loosening, and a focus on strengthening NATO alignment—topics typically emphasized by center-right governments.

What Happened

Germany’s Finance Minister Lars Klingbeil announced on Tuesday that the country will raise its defense spending to 3.5% of gross domestic product (GDP) by 2029. The statement came as he unveiled the new government's financial roadmap, ahead of a NATO summit where alliance members are expected to endorse a new 3.5% spending benchmark. The move represents a significant shift in Germany’s defense policy and budget priorities.

Background: From Under-Spending to Leading NATO Commitments

Germany has long been criticized by NATO allies for not meeting the alliance’s previous goal of 2% of GDP on defense. That changed in 2022 following Russia’s full-scale invasion of Ukraine. Then-Chancellor Olaf Scholz announced a 100 billion-euro special fund to modernize the military and hit the 2% target.

Germany met the 2% mark with the help of this one-time fund. However, the fund is expected to run out by 2027.

Chancellor Friedrich Merz, who took office recently, has made it a top priority to extend and expand this commitment. He stated that his government would ensure the Bundeswehr—Germany’s armed forces—becomes the strongest conventional army in Europe.

New Targets, New Rules

The new coalition government—formed last month—passed legislation allowing it to loosen traditional limits on public debt to support military spending and infrastructure investment. The government expects defense spending to reach 2.4% of GDP in 2024. According to Finance Minister Klingbeil, spending will gradually increase each year until it reaches the 3.5% NATO quota in 2029.

In addition, NATO is also discussing a broader target: 3.5% of GDP for direct defense spending and another 1.5% for infrastructure that can support military needs. Germany’s latest plan puts it in line with those future goals.

Efficiency and European Cooperation

Klingbeil emphasized that while spending will increase, the government would focus on the efficient use of funds. He said the administration will seek better cooperation across Europe in areas such as procurement, research, and development.

“We will be very vigilant that the money is spent efficiently,” he said during the announcement.

Germany’s role in shaping a more integrated European defense framework is expected to grow as it becomes one of NATO’s largest contributors in absolute spending terms.

Budget Outlook Beyond Defense

While military spending is a major focus, Germany's broader fiscal policy also includes a substantial increase in overall federal spending.

Government spending is projected to rise from 503 billion euros in 2024 to 573.8 billion euros in 2029.
A separate 500 billion-euro fund will be allocated over the next 12 years to upgrade the country’s infrastructure.

These plans underline the Merz government’s dual approach of boosting national defense while addressing long-term economic and infrastructural needs.