According to the Financial Times, Germany is projected to borrow approximately €838 billion between 2027 and 2030, with its defense budget potentially rising from around €109 billion in 2027 to €183.6 billion in 2030. The Welt also noted that core defense spending in 2027 is expected to be around €109.7 billion, with total new debt exceeding €200 billion.
In the past, Germany acted as an anchor of fiscal discipline within the Eurozone, with its debt brake and "black zero" tradition keeping its government bond supply relatively restrained. The change now is that defense spending is being given higher priority. The Russian threat, NATO objectives, and uncertainty surrounding US security commitments are pushing Germany from a low-spending, strongly constrained fiscal model to a high-spending, high-financing-demand model.
This will simultaneously affect three chains: first, the supply and interest burden of German government bonds; second, the order visibility of the European defense industry; and third, the understanding of fiscal discipline within the Eurozone. While the budget still needs to pass through parliament and the implementation process, and plans cannot be directly translated into actual orders, Germany's fiscal narrative has shifted from "whether it can borrow" to "how much to borrow for security."
