A victory in the U.S. presidential election by Trump, who has signaled that he would draw back Washington’s aid to Ukraine, could force Berlin to reverse its decision.
Even though the cabinet gave its blessing to the draft, a final budget remains far from the finish line. The bigger hurdle will be in parliament, where MPs from all three governing parties will have to hammer out the details by the end of the year.
“The many promises of the chancellor and his defense minister to continue to support Ukraine are turning out to be hollow phrases,” Ingo Gädechens, a lawmaker from the center-right Christian Democratic Union (CDU), told POLITICO.
Germany’s fiscal flexibility is significantly limited by its constitutional debt brake, which restricts the federal deficit to 0.35 percent of GDP, except in times of emergency. Lindner has resisted declaring the war in Ukraine such an emergency.
At the same time, the coalition has been at odds over how to finance its own military needs in order to fulfill Scholz’s promises to rebuild Germany’s armed forces and meet NATO’s annual spending target of 2 percent of GDP.
Germany is likely to meet that target thanks to extraordinary spending from a special €100 billion fund the government created in 2022. Yet that money will be exhausted by the end of 2027, raising the question of how Berlin will fund the shortfall from 2028 on.
“We have an extraordinary need for action in 2028 amounting to €38.9 billion,” Lindner said, adding that Germany would either have to grow faster or take on more debt. “It is a fundamental question and one that the next federal government will also have to address.”
Henry Donovan contributed reporting.
