Germany could increase military spending to as much as 3.5% of economic output as it ramps up investment to reverse years of neglect of the armed forces, according to Defense Minister Boris Pistorius, Report informs via Bloomberg.
A commitment by NATO members to spend at least 2% of GDP on defense “can only be the starting point” and European nations need more capable armed forces as they expand their engagement around the globe, Pistorius said Saturday during a panel discussion at the Munich Security Conference.
As well as “sufficient amounts of money,” the push will require an increase in manufacturing capacity among defense contractors, he said, adding that securing enough funds will be difficult given Germany’s stretched finances.
“That all has to fit together and then we might reach 3% or maybe even 3.5%, it depends what’s happening in the world and in our economy,” Pistorius said.
Germany came under fire for years from NATO allies for not spending more on its military before Chancellor Olaf Scholz proclaimed a “historical turning point” following Russia’s full-scale invasion of Ukraine.
With the support of the opposition conservatives, Scholz’s ruling coalition set up a special fund for defense outlays worth €100 billion ($108 billion). Even though most of that money has already been spent or allocated, Germany only just managed to hit the target this year for the first time.
Scholz pledged in a speech earlier Saturday in Munich that Germany will continue to meet the NATO spending commitment “in the 2020s, the 2030s and beyond.”
However, Pistorius acknowledged that once the special fund is exhausted after 2027, it will be a major challenge for Germany to find the cash.