Germany, facing political and security pressures, is set to allocate a record budget aimed at bolstering its military capabilities and revamping its infrastructure, marking a pivotal shift in its investment strategy.
Germany's Historic Military and Infrastructure Spending Surge

Germany's Historic Military and Infrastructure Spending Surge
Germany's recent budget proposal includes a significant increase in military spending, aligning with NATO's new expectations.
Germany's finance minister Lars Klingbeil announced on June 24, 2025, that the government will invest heavily in both military and infrastructure as part of an ambitious plan to stimulate its sluggish economy. The budget aims to increase military spending to 3.5 percent of the country’s GDP by 2026, just ahead of a pivotal NATO meeting in The Hague where member countries are discussing an increase to 5 percent of GDP.
For years, Germany has struggled to allocate sufficient funds to military and infrastructure projects, lagging behind its NATO counterparts. However, rising geopolitical tensions, particularly focused on Russia, have prompted a change in strategy. "What we are doing here is a paradigm shift in investment policy," Klingbeil stated as the draft budget was unveiled in Berlin.
The proposed budget hinges upon substantial borrowing, amounting to €115.7 billion (approximately $134 billion) for this year. Of this, about €62.4 billion is specifically earmarked for enhancing military capabilities. This new framework is designed to facilitate continued increases in military funding through 2029, laying the groundwork for meeting NATO's 5 percent spending target, advocated by leaders including former U.S. President Trump.
The announcement marks a significant moment for Germany, Europe’s largest economy, signifying a notable shift after decades of underinvestment in its military and public infrastructure. The steps are positioned as essential not only for national defense but also for revitalizing the economy, amidst a backdrop of increasing global security concerns.
For years, Germany has struggled to allocate sufficient funds to military and infrastructure projects, lagging behind its NATO counterparts. However, rising geopolitical tensions, particularly focused on Russia, have prompted a change in strategy. "What we are doing here is a paradigm shift in investment policy," Klingbeil stated as the draft budget was unveiled in Berlin.
The proposed budget hinges upon substantial borrowing, amounting to €115.7 billion (approximately $134 billion) for this year. Of this, about €62.4 billion is specifically earmarked for enhancing military capabilities. This new framework is designed to facilitate continued increases in military funding through 2029, laying the groundwork for meeting NATO's 5 percent spending target, advocated by leaders including former U.S. President Trump.
The announcement marks a significant moment for Germany, Europe’s largest economy, signifying a notable shift after decades of underinvestment in its military and public infrastructure. The steps are positioned as essential not only for national defense but also for revitalizing the economy, amidst a backdrop of increasing global security concerns.