marin21_Steffen KuglerBundesregierung via Getty Image_scholzgermanymilitary Steffen Kugler/Bundesregierung via Getty Images

Germany’s Emerging War Economy

Reversing its decades-long aversion to rearmament, Germany has pledged to increase military spending and accepted a leadership role in Europe's longstanding quest for strategic autonomy. But to meet the challenges of an age in which the threat of war is always present, Germany and Europe must invest heavily in military innovation.

MUNICH – On February 27, three days after Russia invaded Ukraine, German Chancellor Olaf Scholz stood before a special session of the Bundestag and declared the invasion a “turning point” (Zeitenwende) in German history. In his speech, Scholz also pledged to increase defense spending by €100 billion ($98.5 billion), reversing Germany’s decades-long aversion to rearmament.

Scholz further clarified the meaning of “turning point” in an hour-long speech at Charles University in Prague in August. There, he outlined his vision for the “militarization” of Europe under German leadership and called for a stronger, more “sovereign” European Union that is more effective at defending itself and competing against the influence of foreign powers.

For decades, Germany spent little on its military. Much to the chagrin of the United States and other NATO partners, it preferred to rely on the US for protection. But in the wake of Russia’s aggression, it is clear that Germany cannot continue to fall short of NATO’s 2%-of-GDP target for military spending. Policymakers must commit to bolstering the country’s armed forces.

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