Current medium-term budget planning not towards 2% NATO objective.
The German government initiated a “turnaround in the financing of the Bundeswehr”
to meet alliance commitments and adjust to a changing security environment.
To reach NATO’s 2% of GDP target by 2024, defence expenditures would have
to more than double within seven years to around EUR 80 bn. Spending
increases planned by the FinMin suggest that the defence/GDP ratio might
rather remain close to current levels of around 1.2%. But adjustments of the
medium-term budget are common under a new government.
More fiscal leeway for spending increases than many NATO/Eurozone partners.
Germany is in a more comfortable fiscal position to reach the NATO target than
many other Eurozone/NATO peers. France will cut its defence spending this
year to stay in the Maastricht fiscal limit – but at 1.8% of GDP is closer to the
More is demanded of other euro area members, such as Spain
and Italy with limited fiscal space and defence spending at half the NATO target.