Germany Raises Public Debt to Boost Defense Spending and Support Ukraine

German President Frank-Walter Steinmeier signed significant amendments to the country’s constitution that will facilitate an increase in public debt aimed at enhancing defense capabilities and providing support to Ukraine. Steinmeier’s decision marks the culmination of efforts to reform Germany’s financial restrictions. The amendments will weaken the stringent “debt brake,” a constitutional rule that previously limited the federal government’s borrowing capacity. The changes will take effect once published in the Federal Legislation Bulletin.

The amendments have already begun to produce tangible results. On the same day, the Bundestag Budget Committee approved an additional military aid package for Ukraine amounting to 3 billion euros. This decision is part of a broader strategy by Berlin to bolster its military capabilities and support Kyiv amid the ongoing conflict with Russia.

The constitutional changes were proposed by the ruling coalition of the CDU/CSU and the SPD, who, following their electoral victory in February 2025, set out to enhance Germany’s defense readiness. The Bundestag adopted the amendments on March 18, with the Bundesrat approving them on March 21. These changes permit defense spending that exceeds 1% of GDP to be financed through borrowing, circumventing previous budgetary limitations. CDU/CSU leader Friedrich Merz, described the reform as a “signal to the enemies of freedom,” emphasizing Germany’s commitment to reestablishing itself as a formidable military power in Europe.

The decision has sparked mixed reactions domestically and internationally. According to reports the amendments gained support from 513 Bundestag deputies, while 207 voted against them, including members of the Alternative for Germany, The Left, and the Sahra Wagenknecht Alliance parties. Critics have raised concerns about the potential increase in the national debt burden, with Commerzbank estimating that by 2035, Germany’s public debt could reach 90% of GDP, resulting in annual interest costs of up to 37 billion euros. Nevertheless, Merz contends that investments in defense and infrastructure, including the creation of a 500 billion euro fund, will drive economic growth in the coming years.

Germany’s decision has also drawn attention on the international stage. NATO welcomed the move, viewing it as a positive contribution to the alliance’s overall security framework.