Germany recently approved a budget that will reduce its military aid to Ukraine from $8 billion to $4 billion.
The decision will affect the outcome of the war in Ukraine, as countries may reconsider their current and future military contributions.
Although next year’s budget adds $1.4 billion more in defense spending than in 2024, Germany will nearly halve its military aid to Ukraine.
NATO membership requires countries to dedicate at least 2 percent of their GDP to its military. For years, Germany has been criticized for failing to meet the NATO target. Despite pledges at the 2014 alliance summit to reach this benchmark, for years Germany’s defense spending hovered around 1.5 percent of GDP.
In 2022, after Russia invaded Ukraine, Germany established a $100 billion special defense fund. With this fund, the country promised to exceed the NATO requirements.
However, it wasn’t until 2024 that Germany hit 2 percent for the first time since the early 1990s. This year, it allocated more than $8 billion to directly support Ukraine, second only to the U.S., which sent $107 billion.
Last August, the German government removed a clause making it a legal requirement to spend 2 percent on defense each year.
Instead, Germany’s spending goal has been adjusted to an average of 2 percent over five years.
Next year, Germany’s spending will barely reach the 2 percent requirement. After the special fund is used up or expires, as it is expected to do in 2028, defense spending will fall well below 1.2 percent of GDP.
European Union rules further restrict Germany’s financial flexibility. Consequently, the 2025 budget is less generous to Ukraine.
German Finance Minister Christian Lindner argues that “Ukraine’s financing is secured for the foreseeable future thanks to the European instruments and the new G7 loans.”
Germany’s new defense budget marks a significant shift that will test the solidarity and resolve of global support for Ukraine. Once the G7’s 50 billion dollar loan runs out, who will take financial responsibility?
Will the U.S., Europe, or other actors step up their contributions, or will this mark the beginning of a global decrease in aid to Ukraine? Given the financial uncertainties, Ukraine may face difficult decisions regarding its future.
