Ifo Institute analysis found more than one-third of Germany's 2025 new borrowing
under a defense-and-security exemption was used for non-defence purposes.
Spending covered by the exemption rose from €54.6bln in 2024 to €72.2bln in 2025
(+€17.6bln), while new borrowing under the clause reached €28.6bln in
2025—implying €11.0bln (38.5%) of that new debt was not converted into
additional defense and security spending. Ifo researcher Emilie Hoeslinger said
the fiscal space freed in the core budget was redirected to other uses. The
government has faced repeated criticism for using reform-created fiscal headroom
to support routine spending.
