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In a recent discussion with the DPA news agency, German Finance Minister Christian Lindner outlined a potential increase in defense spending by up to 9 billion euros ($9.7 billion) by 2028, contingent on the nation’s ability to control its debt.
Lindner, representing the Free Democrats (FDP), said that such financial flexibility would become feasible should Germany manage to bring its debt below the European Union’s benchmark of 60% of the gross domestic product. This move aligns with the broader strategy to recalibrate the country’s spending priorities amid rising geopolitical tensions.
The backdrop to this financial strategy includes Germany’s substantial borrowing during the pandemic and the war in Ukraine, with emergency loans totaling around $321 billion taken in 2020, 2021, and 2022.
According to Lindner, Germany is set to start repaying this debt with an annual budget of $9.6 billion beginning in 2028. However, the finance minister suggests that if the pandemic’s impact on the national debt level is sufficiently mitigated by then, these repayments could see significant reductions, thereby freeing up funds for other purposes. Lindner said, “If we fall below this limit, then the repayment of coronavirus debt planned from 2028 could be discussed again. This would make billions available that will help us achieve the leap to the NATO target in the federal budget.”
This all comes as Germany has already ramped up its defense spending due to rising tensions, notably after the start of the war in Ukraine. Following Russia’s invasion, Germany allocated over $100 billion to fund the procurement of modern weaponry. The country also vowed it was committed to spending the minimum defense spending requirement outlined by NATO (which is 2% of the country’s GDP).
