The so-called “traffic light” coalition government of Olaf Scholz, combining the chancellor’s Social Democrats (SPD) with the Greens and the pro-business Free Democrats (FDP), lasted less than three years. It may “only” have been a “transitional government,” as former Green leader Omid Nouripour (a foreign policy expert) described it in late summer 2024. At that time, the writing of an early end was already on the wall, and the self-chosen moniker of a “coalition for progress” sounded hollow.
It is likely that Nouripour will prove even more correct in retrospect. The question, however, that most political parties are trying to avoid during Germany’s strange election campaign is: transition to where? With the notable exceptions of the Greens, whose leader Robert Habeck has openly suggested that defense spending of 3.5 percent of GDP will be necessary henceforth, where exactly Germany is heading has remained quite vague.
When it comes to the area of foreign and security policy, Germany has certainly made progress of sorts under Scholz. The most important step was the multifaceted, if often hesitant, reaction to Russian President Vladimir Putin’s full-scale invasion of Ukraine and his attempted wholesale reversion of Europe’s security order. Key here was the immediate establishment of the €100 billion “special fund” for the Bundeswehr, Germany’s armed forces. The signal was clear: After all the ducking and dodging during the long reign of Angela Merkel, Germany would now finally pull its weight and add a military dimension to its foreign policy.
And thanks to the surprising political talent that is 64-year-old Boris Pistorius—practically unknown previously—who took over as defense minister in January 2023 after his hapless predecessor left the scene, the rebuilding of the Bundeswehr has started in earnest. Without his “can-do” leadership, Germany may well have been procrastinating about whether or not it is really able to permanently station a brigade of 5,000 soldiers in Lithuania in order to make Putin think twice before he attacks NATO allies in the Baltic. Pistorius is the first German defense minister in living memory who has so far not only been scandal-free, but is also the country’s most popular politician.
Something Special
The German term for “special fund,” Sondervermögen, sounds impressive. What it means, though, is debt running outside the official budget. The Scholz government has been unable to explain what exactly will happen after the special fund is depleted (by 2027 at the latest). The uncertainty this entails has hampered efforts to scale up Europe’s arms production and left Germany’s allies with the impression that Berlin might not really mean it, after all.
The logical conclusion would be that the defense budget would need to jump from roughly €50 to €80-90 billion in order to meet the NATO goal of spending at least 2 percent of GDP; or it would require more “special funds.” Spending 3.5 percent of GDP (which is a figure that Germany needs to spend to meet NATO plans) would mean a defense budget north of €150 billion.
During the campaign, Scholz has appeared to harken back to the Merkel years when SPD politicians tried to argue that it was in no one’s interest to spend more on defense―Germany’s neighbors wouldn’t like it! Another favorite claim was that no one had any idea what to spend the extra money on. Scholz, echoing his “no real change necessary” message that has been irksome when it comes to quite a few policy fields, also rejected any idea of cutting the welfare state to free up funds for the Bundeswehr or Ukraine. Playing the one against the other, however, seems to no longer be working particularly well as a campaign strategy.
The leader of the center-right Christian Democrats (CDU/CSU), Friedrich Merz, who was leading the polls by a huge distance at the time of writing and is on track to become Germany’s next chancellor, has left it at saying that for him the 2-percent goal was “the lower limit.” In a speech on security policy in late 2024 he also suggested that shifts within the German budget may be necessary, without giving any details. That’s not a winning strategy either.
Getting the Basics Right
Therefore, this will be the most crucial task for Germany’s next government: an agreed fiscal policy, including a “reformed” or abolished “debt brake,” that allows for spending what is necessary on defense—and that much looks like something near 3.5 percent.
Revitalizing the Bundeswehr remains a huge task. The idea of bringing back compulsory national service for all school leavers, which the CDU/CSU is likely to push for once in government, would delay and complicate it. Germany’s armed forces need to become a more professional and more attractive employer and less bureaucratic in every way; to accomplish that alone will use up a substantive portion of the budget before even starting to consider which capabilities the Bundeswehr, quite urgently, needs to add.
Beyond this, the next government needs to work more closely with European allies. Fences with Paris need to be mended, relations with Warsaw to be made closer. And London, too, needs to feature more strongly in the German foreign policy mindset (again, Pistorius has forged ahead, here with the bilateral Trinity House military cooperation agreement).
The fact that the FDP chose to blow up the Scholz coalition right after the reelection of Donald Trump as US president has meant that Germany will be missing initially when it comes to formulating a European response to whatever the second Trump administration will mean for Europe’s security. It is likely that it will take until May or June to form a new government and thus allow Germany to play a significant role again, including when it comes to further strengthening the EU. And this will be necessary to ensure that Europe can withstand the challenges it now faces not only from Moscow and Beijing, but also from Washington.
That is a bad state of affairs. However, the coalition-building after the election on February 23 is likely to become a moment of truth. The Scholz government managed to paper over fundamental disagreements by giving each party what it wanted most. Germany’s next government will need to set clear priorities.
Henning Hoff is executive editor of INTERNATIONALE POLITIK QUARTERLY.
