In riposte to Trump, Merz says Germany can defend its military spending push - Finance news and analysis from Global Banking & Finance Review
Finance

In riposte to Trump, Merz says Germany can defend its military spending push

Published by Global Banking & Finance Review

Posted on July 3, 2026

3 min read

· Last updated: July 3, 2026

Add as preferred source on Google

Germany Defends Record Defence Spending Amid Trump Criticism Ahead of NATO Summit

Germany's Defence Spending and NATO Relations

By Miranda Murray and Matthias Williams

Chancellor Merz Responds to U.S. Criticism

BERLIN, July 3 (Reuters) - Germany does not have to shy away from talking up its record on defence spending, Chancellor Friedrich Merz said on Friday, when asked about U.S. President Donald Trump calling Germany's past efforts "ridiculous".

NATO Summit and European Unity

The issue of defence spending has loomed large as NATO leaders prepare to gather next week in Ankara, where Europeans aim to set aside strife with Trump over Iran and Greenland and show they are stepping up to defend the continent.

Germany's Increased Defence Budget

"Germany is doubling its defence budget within four years. This is the greatest effort we have ever made to strengthen our defence capabilities. In this respect, we have no reason to shy away from anyone," Merz told reporters.

"We will state this, with all due modesty, and we are doing so as the European Union’s largest member state, bearing a responsibility within Europe."

Trump's Criticism of NATO Allies

Trump took to Truth Social to lambast the defence spending records of NATO allies this week. "Ridiculous for the U.S.A. to continue along this one sided path when the relationship is not reciprocal," said one post. In another, he said Germany's spending was "MUCH LOWER" between 2014-2025 than the U.S. or other NATO allies, adding "Ridiculous!"

NATO's Defence Spending Goals

In The Hague last year, NATO leaders agreed to spend 3.5% of GDP on core defence items such as weapons and troops by 2035 — up from a previous goal of 2%.

Germany's Commitment to NATO Targets

"We, too, take the Russian threat very seriously, and we are arming ourselves against it," Merz said as he hosted leaders of the Baltic states in Berlin. "We will reach the 3.5% benchmark set in The Hague as early as 2029, well ahead of the agreed deadline."

Strains Within the NATO Alliance

The past 12 months have severely strained the alliance, with Trump threatening to take Greenland from fellow NATO member Denmark and then waging a war against Iran that roiled the global economy without consulting European allies.

Impact on U.S.-European Relations

The war also rattled personal ties between Trump and European leaders including Merz, who said the U.S. was being humiliated by Iran.

(Reporting by Miranda Murray and Matthias Williams, editing by Friederike Heine and Alex Richardson)

Key Takeaways

  • Germany is on track to double its defence spending by 2029, reaching around €162 billion annually, with funding via debt reforms and a special fund (defensenews.com).
  • At the 2025 NATO summit in The Hague, allies agreed to lift spending to 5 % of GDP by 2035 (3.5 % for core defence, 1.5 % for security-related items); Germany plans to meet the core 3.5 % component by 2029 (en.wikipedia.org).
  • Despite U.S. President Trump calling Germany’s past defence efforts “ridiculous,” Merz insists there’s no shame in leading Europe’s military build‑up and that Germany holds responsibility as the EU’s largest member (sueddeutsche.de).

References

Frequently Asked Questions

What did Chancellor Merz say about Germany's defence spending?
Chancellor Merz stated that Germany is doubling its defence budget within four years, making it the largest effort to strengthen its defence capabilities yet.
How did President Trump criticize Germany's military spending?
Trump called Germany's previous defence spending efforts 'ridiculous' and said their contributions were much lower compared to the U.S. and other NATO allies.
What is Germany's target for defence spending as a percentage of GDP?
Germany aims to reach a 3.5% GDP defence spending benchmark by 2029, ahead of NATO's agreed 2035 deadline.
Why is defence spending a major topic for the upcoming NATO summit?
Defence spending is central as NATO leaders want to show they are united and increasing investments to defend Europe amidst tensions with the U.S. and threats from Russia.
How have recent world events strained relations within NATO?
Events like Trump's stance on Greenland and the conflict with Iran have created tensions between the U.S. and European allies, impacting personal and diplomatic relationships.

Tags

Related Articles

More from Finance

Explore more articles in the Finance category