Germany invests 500 billion euros and presses European Union for rearmament

Germany, represented by the current chancellor Olaf Scholz (SPD) and the conservative leader and chancellor elected Friedrich Merz (CDU), presents on Thursday (6) at the Extraordinary Union’s Extraordinary Summit in Brussels, a proposal to expand the block’s military investments. The initiative reflects the climb of European militarization in the face of the collapse of the imperialist order, in which economic interests of the European Union (EU) and the United States overlap with the defense discourse of Ukrainian sovereignty.

The future chancellor announced last Tuesday (4) a package of 500 billion euros (about $ 3.1 trillion) in military investments for the next ten years. The statement took place alongside Markus Söder (CSU), Saskia Esken (SPD) and Lars Klingbeil (SPD), leaders of the parties who negotiate the formation of the next government.

In addition to providing a significant increase in defense spending, the proposal includes a constitutional change to exempt military expenses above 1% of public debt limit GDP. It is a turn in the posture of Friedrich Merz, who spent the election campaign defending the maintenance of Schuldenbremse – the constitutional rule that limits Germany’s public indebtedness.

Before the elections, the conservative leader criticized any attempt to make this standard more flexible and even classified the creation of special funds as a “Taschenspielertrick” to circumvent tax discipline. However, given the new international scenario and pressure within the European Union, Merz now argues that defense spending above 1% of GDP are exempt from this restriction.

“The parliamentary elections of 2025 took place less than ten days ago and political events in the world are unfolding quickly. In Europe, the conditions under which we should act in Germany changed faster than we could predict last week, ”Merz said in his statement on Tuesday (4), justifying the turn in his speech on fiscal policy and defense.

The proposal has already received the endorsement of the Social Democratic Party (SPD), which is part of negotiations for the formation of the new government. During Tuesday’s pronouncement, Lars Klingbeil and Saskia Esken, co-leaders of the subtitle, called the Schuldenbrem flexibility of a “necessary measure” and highlighted that the investment plan includes, besides the military budget, a special infrastructure fund of another 500 billion euros for the next ten years.

This fund is expected to allocate 100 billion euros to federated states, allowing investments in areas such as transport, digitization and energy.

The possible new coalition, however, wants to approve the proposal even before the new government, still within the current legislature. The strategy is justified by the fact that CDU/CSU and SPD still have, along with green, a two -thirds majority in the present Bundestag, allowing to change the constitution without depending on parties from the far right or radical left.

With the recomposition of Parliament after the elections, this majority will no longer be guaranteed, as the new results have given more weight to the alternative to Germany (AFD), which promises to block any constitutional change related to the military budget. Therefore, CDU/CSU and SPD bet on an accelerated vote, seeking to approve the plan before the new legislature began.

War industry and the role of Germany in the new European military order
The change in German fiscal policy occurs in a broader context of restructuring the European bloc to the uncertainty about the role of the United States in the conflict between Russia and Ukraine. Germany’s proposal is part of the broader package of the European Union, announced by the president of the European Commission, Ursula Von Der Leyen, which provides for the increase in the bloc’s military spending by 800 billion euros.

However, none of the measures announced so far includes concrete diplomatic efforts for a ceasefire. All solutions found by European leaders walk to the Belicista side.

Uncertainty about US commitment to NATO is accelerating the process of remilitarization of the continent, with Germany assuming an unprecedented protagonism since World War II. If formerly Berlin was cautious with the growth of its military sector, today leads the European rearmament movement.

And among the main beneficiaries of this process, of course, are the giants of the war industry, such as German Rheinmetall, producer of the Leopard tanks, and Airbus, which operates in the manufacture of military aircraft.

See the German companies that will make greater profit:

• Rheinmetall – Manufacture of tanks, ammunition and heavy artillery.
• Airbus Defense and Space – Military Aircraft and Defense Spatial Technology.
• Krauss-Maffei Wegmann (KMW)-Leopard 2 tanks production.
• Diehl Defense – production of missiles and air defense systems.

Last week, Rheinmetall announced that it is converting factories that previously produced parts to the auto industry to units to manufacture military equipment, a sign of the structural change that the German economy faces under the justification of national security.

The European Union, in turn, follows the same logic as Washington: expanding its economic and military influence under the pretext of the defense of democracy. The German government bets that by making room for the military sector in its budget, it will be strengthening its position as a European power.

Ukraine’s defense discourse, however, hides the fact that Kiev’s dependence on the West grows every day, while the European Union strengthens its own defense industry and projects itself as a global military actor.

The left alert and the threat of a new arms race
Sectors of the German left have denounced the new defense policy as a strategy to consolidate an economic project based on the strengthening of military industry to the detriment of social investments. Jan Van Aken, leader of Die Linke, classified the decision of Merz and the SPD as a “statement of political bankruptcy” and denounced that the maneuver to approve constitutional change in the current legislature represents a “blank check for rearmament”.

The parliamentarian stated that the left studies the possibility of legally contesting the accelerated process of the proposal in Bundestag. The critique of the left is not limited to the increase in military spending, but also to the political use of Schuldenbrem, the tax rule.

“When it comes to investments in infrastructure, housing or health, CDU and SPD advocate the debt limit. But when money goes to tanks and missiles, suddenly the rule can be ignored, ”said Van Aken.

Germany’s posture in the European summit also reflects a change in the bloc’s foreign policy. While countries like France and Poland press for an even more aggressive stance on Russia, leftist parties such as Die Linke (the left) show concern about the possibility of a new arms race.

The German proposal to flexible the fiscal rules for military spending creates a precedent that can be followed by other nations, intensifying the dismantling of austerity policies only when this favors the military sector.

The crisis of Western imperialism is evident in the contradiction between European discourse and its actions. Germany and the European Union do not position themselves as pacification forces, but rather as new actors in a dispute by global influence, which does not necessarily strengthen Ukraine, but stimulate the bloc’s industrial and financial interests. Security discourse hides an economic and geopolitical project that can have irreversible impacts on the stability of the continent.