Germany approves historic defence spending boost

Homeland April 1, 2025

first-of-its-kind agreement between the UK and Germany on defence.

Germany’s Bundesrat has approved a landmark defence and infrastructure spending bill, unlocking hundreds of billions of euros to modernise the country’s armed forces and boost national security.

The legislation, which amends Germany’s constitutionally enshrined fiscal rules, will enable the government to significantly increase military spending while also creating a €500 billion special fund for infrastructure projects over the next 12 years.

Germany Ramps Up Defence Investment

The bill was passed with 53 out of 69 votes, well above the 46-vote threshold needed. The decision signals a major shift in Germany’s defence policy, strengthening its armed forces amid growing global security concerns. The move aligns with Germany’s commitment to enhanced European defence cooperation and comes amid calls from NATO allies for greater burden-sharing in military spending.

Political Challenges and Approval

The passage of the bill was not guaranteed, as some smaller parties had voiced opposition. In Bavaria, concerns were raised by the Free Voters, a junior coalition partner to the Christian Social Union (CSU), about the financial implications of the package. However, Free Voters leader Hubert Aiwanger ultimately backed the measure, stating: “Demanding the sensible use of these funds is always better than saying I failed.”

Chancellor-in-waiting Friedrich Merz, leader of the Christian Democratic Union (CDU), had pushed for the bill’s approval ahead of the next parliament session starting 25 March, fearing opposition from Die Linke (The Left) and Alternative for Germany (AfD), both of whom will gain seats in the new Bundestag.

Impact on the UK Defence Sector

For the UK, Germany’s increased defence spending could present new opportunities for defence collaboration, particularly within NATO and the wider European defence industry. The investment could lead to joint procurement projects, enhanced military interoperability, and greater demand for British defence exports in key areas such as aerospace, cyber defence, and maritime security.

As the UK continues to expand its own defence industrial strategy, this development reinforces the growing trend among European nations to bolster military capabilities, ensuring readiness in an increasingly volatile geopolitical landscape.

With this news, Gordon Woodward, Managing Director at M&E Global, shared his thoughts on the impact of this spending across the defence sector. Woodward said: “During the current period of international disharmony, the German government’s historic commitment to its defence is a brave yet reassuring decision.

“Germany’s decisive actions stand as a pivotal example, urging other European nations to make similarly significant commitments to their own defence. While Britain has pledged to increase military spending, its leadership should reflect on the fact that Germany – a country often criticised for bureaucratic inertia – has risen to meet pressing threats with resolve and action. Britain’s politicians must follow suit and take immediate steps to bolster the nation’s defence budget without further delay.”

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