Germany plans sharp rise in defense spending to $125B in 2027

Germany will significantly ramp up defense spending in 2027, allocating €109.7 billion ($125.3 billion) to the military — an increase of nearly one-third from the current year — according to the government’s draft budget approved by the Cabinet on Monday.

The proposed 2027 federal budget foresees total spending of €555.4 billion, up from €524.5 billion this year. According to public broadcaster ZDF, a large share of the new funds would go toward the armed forces and new procurement projects.

The plan aims to meet NATO spending commitments and strengthen military capabilities as the United States prepares to reduce its military presence in Europe, government sources said.

The core defense budget would rise to €109.7 billion next year from €82.7 billion in 2026. Defense outlays are projected to continue climbing sharply, reaching €183.7 billion by 2030.

The draft budget also sets aside €11.6 billion in military aid for Ukraine in 2027, with annual support declining to €8.5 billion in subsequent years.

To fund the surge, Chancellor Friedrich Merz’s coalition government plans substantial new borrowing. The core federal budget alone would include €118.7 billion in fresh debt next year.

The draft budget must still be approved by parliament.