Germany’s Defence Budget Cuts: Implications for Military Aid and European Security

Germany’s Defence Budget Cuts and Their Implications

The German government is poised to allocate a mere four billion euros in its 2025 budget, a staggering reduction nearly halving the 7.5 billion euros designated for this year. This budget proposal, finalized by the coalition government after extensive negotiations last Friday, is now set to undergo scrutiny by the German parliament. If these cuts are ratified, defence analyst Alain de Neve from the Royal Military Academy of Belgium warns that the ramifications will be significant.

“This reduction will undoubtedly have financial implications,” de Neve stated in an interview with Euronews. “In terms of tangible military assistance, particularly regarding equipment supplied, Poland is currently outpacing Germany. It is evident that Ukraine’s neighboring countries are the most active contributors to this aid. Additionally, the United Kingdom has emerged as a more substantial contributor compared to France, Spain, or Italy,” he elaborated.

Since 2022, the European Union and its member states have collectively donated 38 billion euros in military aid, with Germany accounting for 28 billion euros of this total. German assistance has primarily been delivered through “funds for the security capacity building initiative,” alongside five billion euros worth of military equipment dispatched by its armed forces.

Potential Use of Frozen Russian Assets

The G7, an assembly of the world’s seven largest economies, is currently deliberating the possibility of utilizing a portion of the 300 billion dollars in frozen Russian assets to provide military equipment for Ukraine. However, as de Neve points out, the political and technical complexities of this endeavor will not be straightforward. “This initiative could hardly serve as a sustainable resource for supporting Ukraine in its struggle against Russia,” he remarked.

“We must recognize that these 300 billion dollars will eventually need to be distributed among multiple countries. The G7 will be the forum for this discussion and negotiation. At present, we are uncertain about the allocation of these funds to the various states. Furthermore, it remains unclear whether there will be any consensus to mobilize this reserve, which would not constitute a permanent solution,” he added.

In light of these challenges, the question arises: can Europe assume a leadership role in the current situation? De Neve finds this prospect daunting. “It is very difficult to envision such a scenario,” he stated.

The U.S. Role and Future Aid to Ukraine

Currently, only the United States provides more military support to Ukraine than Germany. However, the upcoming elections in November pose a potential threat to the continuity of this aid. The Democratic administration has committed to maintaining its current support levels, yet Republican candidate Donald Trump has signaled intentions to withdraw U.S. funding to Ukraine if he is elected.

“The primary risk lies in the possibility that a slight decrease in European aid to Ukraine could coincide with a significant reduction in U.S. assistance, particularly if Donald Trump were to regain power,” de Neve cautioned. “The overarching question is: can Europe take control in the prevailing circumstances? It’s undeniably challenging to imagine. There will certainly be aspects where Europe cannot offset the decline in U.S. military and financial support. Nonetheless, Europe has acknowledged for some time that the conflict between Ukraine and Russia is fundamentally a European issue,” he explained.

Strengthening the European Defence Industry

Recognizing the gravity of the situation, EU leaders resolved last February to establish a new mechanism for Ukraine, allocating 50 million euros to be utilized by 2027. This initiative aims to bolster the nation’s recovery and facilitate the reforms necessary for its candidacy for EU membership.

Moreover, the Union has realized the imperative of investing more in its own defence industry, both to assist Ukraine and to deter potential aggression from Russia, particularly against its bordering states. “Europeans find themselves between a rock and a hard place. On one side, there is the necessity to provide aid to Ukraine, enabling it to withstand Russian pressure. On the other hand, there is the urgent need for European rearmament and greater economic resources. Given that budgetary resources are inherently limited, all European nations will, in one way or another, have to make difficult choices in the coming months and years,” de Neve remarked.

To navigate these complexities, Ursula von der Leyen, the president of the European Commission, has proposed the appointment of a member of her executive team solely dedicated to a defence portfolio. This individual will oversee the implementation of the first European defence industrial strategy aimed at enhancing Europe’s preparedness and security. Meanwhile, the EU’s security and defence policy will continue to be managed by the chief diplomat of the EU, with former Estonian Prime Minister Kaja Kallas recently appointed to succeed Josep Borrell.