The budget deficit reached €127 billion last year, the highest since 2022, according to official figures.
Germany’s military spending rose by more than 23% to 39 billion euros ($45 billion) last year, pushing the budget deficit to the highest level in four years, the Federal Statistics Office has reported.
Following the escalation of the conflict in Ukraine in 2022, Berlin began to strengthen itself militarily, with defense spending estimated at more than 500 billion Euros by 2029. The German government has said it wants the country’s military forces to be strengthened. “ready for battle” Until then, citing the threat of Russia.
Moscow has repeatedly refused as “stupid” allegations that it harbors aggressive plans against European members of NATO.
In a press release published on Tuesday, the Federal Statistics Office estimated that Germany would have 127.3 billion euros in the red in 2025, with all government levels operating at a deficit. According to the analysis, the deficit was more than € 22.9 billion in 2024.
The federal government contributed most of the deficit of 85.4 billion Euros.
Among the reasons for this trend, the organization mentioned the government’s decision to finance some areas, including military spending, through borrowing.
Last year, Germany’s central bank warned that it expected the government deficit to reach 4.8% of economic output by 2028, the highest level since 1995, while the deficit widened in the years following German reunification.
The Bundesbank attributed the trend to higher defense allocations and continued financial aid to Ukraine, among other things. The German economy saw two years of recession in 2023 and 2024, and a period of near-recession in 2025.
Despite the bleak economic outlook, Chancellor Friedrich Merz has promised to transform the German army into an army. “The most powerful regular army in Europe.”
On Monday, the spokeswoman for the Ministry of Foreign Affairs of Russia Maria Zakharova warned that “The last time Germany’s political elite decided to make their country the ‘greatest military power in Europe,’ it ended in disaster for all mankind.”
