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European Defence Investment Plans: €500bn Boost Revealed

by Ahmed Hassan - World News Editor

Germany is pressing France to significantly increase its defense spending, arguing that greater financial commitment is essential for achieving European strategic autonomy. The call from German Foreign Minister Johann Wadephul comes amid growing concerns about the reliability of U.S. Security guarantees and a broader push within Europe to bolster its own defense capabilities.

Wadephul’s remarks, made in an interview with German public broadcaster Deutschlandfunk, directly addressed French President Emmanuel Macron’s frequent calls for greater European sovereignty. Anyone who talks about it needs to act accordingly in their own country, Wadephul stated, implicitly criticizing France’s current level of investment in defense. The comments were made at the Munich Security Conference, where Wadephul and Chancellor Friedrich Merz met with U.S. Secretary of State Marco Rubio.

The pressure on France reflects a growing frustration within Germany regarding the distribution of defense burdens within the European Union. While Germany has committed to increasing its own defense spending to 5% of GDP by 2035 – a target agreed upon by NATO members last June – Wadephul indicated that France is not on track to meet the same goal. Unfortunately, efforts in the French republic have also been insufficient to achieve this so far, he said.

This push for increased French spending is occurring against a backdrop of heightened geopolitical uncertainty. European nations are increasingly questioning the long-term commitment of the United States to European security, particularly given potential shifts in U.S. Foreign policy. The possibility of a less engaged U.S. Has spurred a renewed focus on building independent European defense capabilities.

Germany’s own commitment to bolstering its defense budget is substantial. A €500 billion special fund, established in 2025, is dedicated to infrastructure and climate neutrality projects, but also includes a significant component for defense spending. The fund allows the German government to bypass its constitutional debt brake and make large-scale investments. The law applying to the fund was retroactive for 2025, with investments reaching €37 billion that year.

The German government’s decision to create this special fund, alongside the increased defense commitment, signals a fundamental shift in its fiscal policy. For decades, Germany adhered to a strict policy of budgetary discipline. The creation of the fund represents a departure from that approach, prioritizing long-term investments in competitiveness and security.

However, the fund has not been without its critics. Concerns have been raised about the potential for the funds to be diverted to projects that do not contribute to long-term economic growth or climate neutrality. Observers have stressed the importance of focusing on new investments rather than simply reallocating existing funds.

The broader European context is also crucial. A White Paper for European Defence – Readiness 2030, presented in March 2025, outlines a new approach to defense and identifies key investment needs. The ReArm Europe Plan, which accompanies the White Paper, provides financial incentives for EU member states to increase their defense spending. The European Commission has also proposed a new financial instrument, the Security Action for Europe (SAFE) Regulation, to help countries invest in areas like missile defense, drones, and cybersecurity.

The Commission has also indicated that member states can activate the national escape clause of the Stability and Growth Pact, providing them with additional budgetary flexibility to increase defense spending within EU fiscal rules. This demonstrates a willingness to accommodate increased defense expenditure, recognizing the changing security landscape.

The debate over defense spending within Europe is likely to intensify in the coming years. Germany’s call for France to increase its investment is a clear signal of its desire for a more equitable distribution of the defense burden. The success of the European effort to enhance its defense capabilities will depend on the willingness of all member states to commit the necessary resources and to coordinate their efforts effectively.

The implications extend beyond purely military considerations. Increased defense spending is expected to stimulate economic activity in the defense industry, creating jobs and fostering innovation. However, it also raises questions about the trade-offs between defense and other priorities, such as social welfare and environmental protection. The German government, for example, has simultaneously pursued increased defense spending alongside efforts to reduce energy costs, highlighting the complex budgetary challenges facing European nations.

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