Germany to Modernize Its Army with $107m Special Fund

By Staff, Agencies

Germany will release $107 million to modernize its army via a special defense fund proposed after Russia’s special military operation in Ukraine, according to the German finance ministry.

An agreement was reached between Germany’s opposition and the ruling coalition – which includes the Social Democrats, the Greens, and the Free Democrats. 

A two-thirds majority was required to exempt the defense fund from a constitutional debt brake, allowing Berlin to achieve NATO’s target of spending two percent of GDP on defense.

The money is to be used over several years to increase Germany’s regular defense budget of over $53m, and the fund will be financed by additional debt.

Three days after the beginning of the Russian operation in Ukraine in February, Germany’s Chancellor Olaf Scholz pledged a special budget of over $107 billion to rearm the German military and modernize its outdated equipment over the next few years.

But critics accused Scholz of timidity in his support for Kyiv and failing to take enough concrete action in terms of arms deliveries.

The release of funds for the military is a major reversal for Germany, which in recent years dragged its feet on complying with its NATO spending commitments, drawing criticism from Washington in particular.

After the end of the Cold War, Germany significantly reduced the size of its army, from around 500,000 in 1990 to just 200,000 today.