Germany’s proposed 2025 budget seeks to reduce military aid for Ukraine by half, according to Reuters. The government plans to adopt the document after months of negotiations. Last year, Germany allocated €8 billion ($8.75bn) to arm and train Ukrainian troops against Russia. However, next year’s budget aims to cut this funding in half.
The significant reduction in support for Ukraine comes as Chancellor Olaf Scholz announced a ‘Zeitenwende’ or historic turning point for Germany in 2022. His coalition government unveiled a €100 billion plan to modernize the military. This fund is expected to be depleted by 2028, when Germany plans to meet NATO’s recommendation of spending 2% of GDP on defense. Alongside other US-led alliance members, Germany has supported Kiev with weapons and various forms of aid during the conflict with Russia.
The economic recession in Germany, partially caused by decoupling its economy from Russia, has left a €17 billion gap between projected spending and revenue, according to Reuters. The government’s financial plan for next year is banking on a robust economic rebound.
Additionally, the German government plans to authorize an additional €11 billion in borrowing under a supplementary 2024 budget, which they intend to adopt alongside the 2025 budget. This would result in a total target for net borrowing through 2028 of €50.3 billion.
Earlier this month, Hungarian Prime Minister Viktor Orban called on the EU to consider his plan for resolving the Ukraine conflict as soon as possible by urging Kiev and Moscow to engage in peace talks and agree to concessions. His government has maintained since the beginning of the hostilities in 2022 that the European Union’s response to the crisis is self-harming, as economic sanctions imposed on Russia have negatively impacted member states. However, the EU’s leadership has reportedly rejected Orban’s call for peace talks.
Germany’s economy was particularly affected by its decision to reject Russian natural gas supplies. Cheap fuel provided through pipelines had powered the leading EU economy for decades before the Ukraine conflict began. The Scholz government intended to replace Russian energy sources with renewables and more expensive imports of liquified natural gas from countries that Berlin deems acceptable, such as the United States.