Pistorius has limited financial wiggle room to invest in Germany’s military to make it “fit for war,” as he recently put it. That is because of Germany’s so-called “debt brake,” which restricts the federal deficit to 0.35 percent of GDP, except in times of emergency.
Pistorius, a social democrat, has been campaigning to exempt defense spending from those spending rules in recent weeks — a stance he doubled down on on his U.S. trip. “Expenditure for defense and civil protection should not be included” under debt brake rules, he told the German Press Agency.
German Finance Minister Christian Linder, the leader of the Free Democratic Party (FDP) who is renewing attempts to brand himself as the government’s fiscal hawk, shot back at Pistorius, arguing that raising debt to finance defense spending is not the answer.
“Unfortunately, Mr. Pistorius is only singling out the option of creating security through debt,” he told the German Press Agency. “The citizens would thus be saddled with more and more permanent interest burdens,” he added. “The better way is to reallocate money in our large state budget and get the economy moving.”
The coalition spat over how to finance defense spending leaves open the question of how Germany will pay for the promised military expansion. That question is only becoming more urgent now that a €100 billion special fund set aside in 2022 for boosting Germany’s military is already projected to run dry by 2028, according to Pistorius’s own estimate.
By Pistorius’ count, Germany will need to spend around an additional €7 billion next year to maintain its defense commitments and meet the NATO defense spending target of at least 2 percent of GDP. This is the first year that Germany is projected to meet that 2 percent target, and Chancellor Olaf Scholz has vowed to continue to meet the target every year going forward.
