German FinMin doubles down on 2023 debt brake goal after defence spending deal

The governing coalition agreed with its conservative CDU/CSU rivals on Sunday to change the constitution to allow for a credit-based special fund, proposed after Russia's invasion of Ukraine, that will raise defence spending towards the 2% NATO target. While the final agreement promises a strategy for strengthening cybersecurity, as requested by the Greens, the document said that any spending in that area would have to come from the regular budget.

Germany's plans to spend 100 billion euros ($108 billion) on its armed forces over the coming years will not change the government's goal of returning to its debt brake in 2023, Finance Minister Christian Lindner said on Monday.

"While in the past it was possible due to the emergency situation of war and crisis to mobilise special funds, we will now end expansive fiscal policy in Germany," Lindner said, stressing that a special defence fund agreed to by political parties would only be available for the Bundeswehr. The governing coalition agreed with its conservative CDU/CSU rivals on Sunday to change the constitution to allow for a credit-based special fund, proposed after Russia's invasion of Ukraine, that will raise defence spending towards the 2% NATO target.

While the final agreement promises a strategy for strengthening cybersecurity, as requested by the Greens, the document said that any spending in that area would have to come from the regular budget. "It is clear to everyone that more needs to be done in the area of cybersecurity," Lindner told reporters in Berlin, but he said this would rely on "generally setting the priorities of the budget negotiations in conjunction with the debt brake".

German Foreign Minister Annalena Baerbock, a member of the Greens, told the Deutschlandfunk radio broadcaster that the compromise on cybersecurity was necessary in order to secure support for the special defence fund, which requires a two-thirds majority to pass in the Bundestag legislature. "It is a joint agreement, a good compromise, in which we ensure that NATO can rely on us," Baerbock said, pointing to gaps in German defence that were "much more dramatic" than first thought when Russia invaded Ukraine in late February. ($1 = 0.9282 euros)

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