According to an internal calculation by the Ministry of Defense, Germany is in danger of missing NATO’s two percent target again in 2026. The reason is that the federal government plans to no longer finance arms aid to Ukraine from the federal budget after 2026.
Budget planning and NATO goals
Again “Spiegel” reported that despite a minimal increase in the defense budget, the defense ministry’s targets are 1.96 percent, which is below NATO’s target. The federal government’s plan is to no longer finance arms aid to Ukraine from the federal budget after 2026, but rather through a 50 billion dollar loan organized by the G7 states.
Consequences of the new financing
The reduced expenditure is the result of the restructuring of the financing of arms aid. Until now, the costs for deliveries from Berlin to Ukraine were declared as defense-related expenditure and included in the NATO budget. The budget includes 7.5 billion euros for 2024 and 4 billion euros for 2025. The planned elimination of this item from 2026 could mean that German spending could fall back below the alliance’s requirement of spending at least two percent of gross domestic product on defense.
Concerns within the governing coalition
The federal government’s internal calculations are raising concerns within the coalition. The SPD budget politician Andreas Schwarz expressed concern: “If we do not reach the two percent target, we are playing with the trust of our allies.” Germany had achieved NATO’s 2021 target of spending at least 2.12 percent of gross domestic product on defense for the first time. The looming relapse could significantly undermine the trust of the allies in German politics.
