If Germany were to increase its defense expenditures to five percent of its economic output, as demanded by the future US President Donald Trump, a financing gap of a total of 370 billion euros would arise in the next legislative period, according to a study by the Cologne-based Institute of the German Economy (IW), as reported by the “Rheinische Post” (Friday edition).
Already in 2028, an additional 170 billion euros would be required, equivalent to a third of the current federal budget, the study says. This includes the special fund of 100 billion euros established in 2022, which will be exhausted in 2027.
Since this special fund will only last until 2027, the IW in its study already expects a financing gap of 21.5 billion euros in 2028 to achieve the NATO quote of two percent. If the increase is to 2.5 percent, a gap of around 50 billion euros would be missing in 2028, and around 75 billion euros in the period from 2025 to 2028.
“If the NATO target is increased to three percent in four steps from 2025, the financing gap would rise to over 74 billion euros in 2028 and 136 billion euros in the entire legislative period” writes IW expert Hubertus Bardt, assuming that this future scenario is most likely to occur. The party programs would not provide an adequate answer to how the financing gaps could be closed.