Published by Global Banking & Finance Review®
Posted on June 23, 2025
2 min readLast updated: January 23, 2026
Add as preferred source on GoogleGermany plans to increase its defence spending to 3.5% of GDP by 2029, with significant budget increases and borrowing reforms.
By Maria Martinez
BERLIN (Reuters) -Germany will boost defence spending to 3.5% of gross domestic product by 2029, sources said on Monday, aiming to send a strong signal with its 2025 budget ahead of this week's NATO summit in The Hague.
Germany's total defence spending will go up from 95 billion euros ($108.89 billion) in the draft budget for 2025 to 162 billion euros in the budget framework for 2029, the sources said.
The draft budget for 2025 and the budget framework for 2026 will be approved by the cabinet on Tuesday with record investments of 115.7 billion euros in 2025 and 123.6 billion euros in 2026, up from 74.5 billion euros in 2024.
Borrowing will go up in the budget from 33.3 billion euros in 2024 to 126.1 billion euros in 2029, the sources said.
Germany will be able to borrow a total 378.1 billion euros for defence between 2025 and 2029 thanks to debt brake reform from March.
A special fund for infrastructure, which is excluded from Germany's debt brake that limits borrowing to 0.35% of GDP, will add borrowing of 37.2 billion euros in 2025 and 57.9 billion euros in 2026.
($1 = 0.8724 euros)
(Reporting by Maria Martinez, Holger Hansen and Christian Kraemer; editing by Matthias Williams)
Germany's defence spending is set to increase to 3.5% of GDP by 2029.
Germany's total defence spending will rise from 95 billion euros in 2025 to 162 billion euros by 2029.
Germany will be able to borrow a total of 378.1 billion euros for defence between 2025 and 2029.
The draft budget for 2025 includes record investments of 115.7 billion euros, while the budget for 2026 is set at 123.6 billion euros.
The debt brake reform will allow Germany to increase its borrowing significantly, impacting its defence budget positively.
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