But even though Germany’s annual defence expenditures rank amongst the ten
highest globally, compared to the size of its economy (the world’s fourth largest),
it ranges only in the lower average. At around 1.2% of GDP it is also below the
2% target that NATO members aim to reach by 2024.
With the end of the cold war, the importance of defence in Germany’s
government spending declined substantially. This is illustrated by a drop in the
German military budget by more than 30% between 1990 and 2000 (adjusted
for prices, see chart 2).2 Over the same period, the ratio of defence spending to
GDP halved from more than 2% to just above 1%. In the early 2000s, the
defence budget was raised again in order to account for Germany’s increased
foreign obligations but – adjusted for price – remained far below pre-unification
A major reform of the Bundeswehr (German armed forces) ended military
conscription in 2011. Defence spending stagnated and the number of active
military personnel declined from almost 250,000 to 177,900 in 2017.