Janice R. Andrews
Berlin, Germany – German Chancellor Olaf Scholz has firmly opposed U.S. President-elect Donald Trump’s proposal for NATO allies to increase defense spending to 5% of their gross domestic product (GDP), labeling it as financially unviable.
Speaking at a campaign event in Bielefeld, Scholz highlighted the significant economic implications of meeting such a target. “Spending 5% would amount to over €200 billion ($204 billion) annually, which is nearly half of our federal budget,” Scholz explained. “Achieving this would require either substantial tax increases or deep cuts to areas like pensions, local governance, and transportation infrastructure—options I cannot support.”
Germany recently met NATO’s current spending target of 2% of GDP for the first time since the Cold War. Scholz reiterated his commitment to maintaining this level, stating, “We will continue to allocate 2% of our GDP to defense. If someone wants more, they need to explain where the extra funding will come from.”
Germany’s Defense Spending Challenges
Following Russia’s full-scale invasion of Ukraine in 2022, Scholz delivered a pivotal “Zeitenwende” (historical turning point) speech, announcing a €100 billion special fund to modernize Germany’s Bundeswehr. Despite these efforts, Germany’s defense spending remains constrained by strict constitutional rules on deficit spending and a limited federal budget.
While Scholz holds firm on the 2% commitment, German Defense Minister Boris Pistorius suggested a need for increased investment in defense. Speaking in Kassel, where he handed over advanced German-built howitzers to Ukraine, Pistorius stated, “Two percent should only be the starting point. If we aim to maintain the necessary pace and scale for our security, significantly higher spending will be required in the coming years.”
Pistorius, a prominent member of Scholz’s Social Democratic Party (SPD), has been gaining popularity in polls and was recently considered as a potential candidate to replace Scholz in upcoming elections. However, he withdrew from the race while continuing to advocate for enhanced military readiness.
NATO’s Varied Reactions
Poland, NATO’s highest defense spender relative to GDP, partially supported Trump’s proposal. Polish Defense Minister Wladyslaw Kosiniak-Kamysz described the suggestion as a “wake-up call” for NATO members. In an interview with the Financial Times, he stated, “Setting ambitious targets forces a necessary debate. Without such goals, some countries may delay prioritizing their military budgets.”
Poland currently allocates 4.2% of GDP to defense, with plans to raise this to 4.7% by 2026. Other NATO members with high defense spending include Estonia (3.43%), Latvia (3.15%), Lithuania (2.85%), and Finland (2.41%), all of which share borders with Russia or its allies. In contrast, the United States, despite its role as NATO’s largest financial contributor, spends about 3.37% of its GDP on defense.
Security and Economic Sustainability
The differing perspectives on Trump’s proposed 5% target highlight the challenges NATO members face in balancing security needs with economic realities. Scholz’s firm stance on maintaining the 2% commitment reflects Germany’s cautious approach, prioritizing fiscal responsibility over rapid increases in military expenditure.
As NATO continues to debate future spending goals, Trump’s bold proposal has reignited discussions on equitable burden-sharing and the need for robust defense investments. For Germany, navigating these demands will require a careful balance between fulfilling security commitments and safeguarding domestic priorities.
