{"id":1970956,"date":"2025-06-24T16:32:43","date_gmt":"2025-06-24T14:32:43","guid":{"rendered":"https:\/\/pre.efe.com\/?p=1970956"},"modified":"2025-06-24T22:54:27","modified_gmt":"2025-06-24T20:54:27","slug":"germany-budget-bets-on-defense-growth-with-public-investment-push","status":"publish","type":"post","link":"https:\/\/pre.efe.com\/en\/latest-news\/2025-06-24\/germany-budget-bets-on-defense-growth-with-public-investment-push\/","title":{"rendered":"Germany budget bets on defense, growth with public investment push"},"content":{"rendered":"\n

Berlin, June 24 (EFE).\u2013 German Vice-Chancellor and Finance Minister Lars Klingbeil presented on Tuesday the country\u2019s draft budget for 2025, outlining historic public investments to boost defense capabilities and reignite growth in Europe\u2019s economic power house.<\/p>\n\n\n\n

The budget proposal includes total spending of \u20ac503 billion, with \u20ac115 billion, 22.8 percent of the total, earmarked for investments, a “record figure,” according to Klingbeil.<\/p>\n\n\n\n

With this financial roadmap, Chancellor Friedrich Merz\u2019s government aims to reverse two consecutive years of recession and simultaneously strengthen Germany\u2019s military readiness.<\/p>\n\n\n\n

Defense spending surges The draft budget allocates \u20ac62.4 billion to defense in 2025, equivalent to 2.4 percent of Germany\u2019s GDP. This marks a significant increase from the \u20ac51.95 billion earmarked in the previous budget, and spending is expected to continue rising in the coming years.<\/p>\n\n\n\n

“By 2029, we will gradually increase defense spending so that we reach NATO\u2019s 3.5 percent target,” Klingbeil said.<\/p>\n\n\n\n

Defense Minister Boris Pistorius welcomed the plans. \u201cWe have made a historic shift in defense spending.\u201d<\/p>\n\n\n

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\"\"<\/figure>\n<\/div>\n\n\n

The defense ministry has benefited from constitutional reforms passed before the current legislature, which allow defense borrowing above the 1 percent GDP cap, along with the creation of a \u20ac500 billion infrastructure fund for the next 12 years.<\/p>\n\n\n\n

According to Pistorius, the \u20ac62.4 billion in the regular defense budget will be supplemented by \u20ac24.4 billion from this special fund.<\/p>\n\n\n\n

If parliament approves the proposal, Germany\u2019s armed forces will have more than \u20ac86 billion in funding for 2025, including funds to hire 10,000 new soldiers this year.<\/p>\n\n\n\n

Investing in modernization Klingbeil emphasized that the budget also aims to pull the country out of economic stagnation. Germany\u2019s GDP contracted by 0.3 percent in 2023 and by 0.2 percent in 2024, with little to no growth forecast for 2025.<\/p>\n\n\n\n

\u201cNothing is more costly than the stagnation of recent years. That\u2019s why it\u2019s right to invest more, to guarantee higher investments and solve the structural problems of the past,\u201d Klingbeil said.<\/p>\n\n\n\n

The government plans to direct millions toward modernizing infrastructure in transport, telecommunications, education, research, and climate protection. For 2025 alone, \u20ac22 billion will be invested in upgrading railway infrastructure.<\/p>\n\n\n

\n
\"\"<\/figure>\n<\/div>\n\n\n

\u201cWe will invest more than \u20ac100 billion in the rail network between now and 2029,\u201d Klingbeil said. He acknowledged that past austerity policies aimed at producing budget surpluses had led to under-investment across critical sectors.<\/p>\n\n\n\n

\u201cOur country has faced cutbacks in many areas. The investment backlog is massive. Now we\u2019re pushing forward. We want excavators rolling quickly, and our companies and workers will benefit,\u201d he added. Klingbeil also pledged strict oversight to ensure \u201cevery euro is well spent.\u201d<\/p>\n\n\n\n

Opposition criticism Despite the boost in public investment, the draft budget includes a planned debt increase of \u20ac82 billion. Klingbeil defended this move, noting that Germany\u2019s public debt remains relatively low at 63 percent of GDP, far below levels in countries like France or the United States, where public debt exceeds 100 percent.<\/p>\n\n\n\n

However, the rising debt drew criticism from the far-right Alternative for Germany (AfD), the country\u2019s main opposition party, which warned that public borrowing could reach \u20ac850 billion by 2029.<\/p>\n\n\n\n

Meanwhile, the Green party accused the government of squandering a “historic opportunity” to tackle climate change and dismissed the budget as a “distribution of election gifts” and a “cover-up of budget holes.”<\/p>\n\n\n\n

The Left party also condemned the “billion-euro military spending.” EFE<\/p>\n\n\n\n

smm-sk<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Berlin, June 24 (EFE).\u2013 German Vice-Chancellor and Finance Minister Lars Klingbeil presented on Tuesday the country\u2019s draft budget for 2025, outlining historic public investments to boost defense capabilities and reignite growth in Europe\u2019s economic power house. The budget proposal includes total spending of \u20ac503 billion, with \u20ac115 billion, 22.8 percent of the total, earmarked for … Read more<\/a><\/p>\n","protected":false},"author":198164071,"featured_media":1970966,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[122140],"tags":[],"class_list":["post-1970956","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-50"],"acf":[],"yoast_head":"\nTanks, Tracks, and Turnaround: Inside Germany\u2019s \u20ac503B Plan EFE<\/title>\n<meta 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