Why Germany can’t afford not to spend billions on defence

For decades, Germany prided itself on fiscal restraint, wielding the Schuldenbremse, or debt brake, as both shield and creed, a safeguard against excess and a symbol of post-war prudence. But in an era of resurgent Russian aggression and global upheaval, that restraint has become a liability. Now in a historic pivot, Germany has shed its self-imposed shackles, embracing power and reshaping Europe’s security order for generations to come.

At the height of the Cold War in 1963, Germany’s defence spending reached a robust 4.9 per cent of GDP, a testament to a nation prepared for the existential threats of the era. Yet that commitment eroded over decades, to 1.9 per cent in 1992 and a mere 1.1 per cent by 2005, a fiscal retreat reflecting a growing complacency. The country failed to meet Nato’s 2 per cent defence target for more than 30 years, until 2024.