July 18, 2024, Berlin
Germany, once Ukraine’s biggest European supplier of military aid, plans to cut future assistance by half. This change is due to other spending priorities, as noted in a finance ministry document.
On Wednesday, the German finance minister presented the 2025 budget. Military aid to Ukraine will be reduced to €4 billion, according to a draft.
Finance Minister Christian Lindner said Ukraine would need to rely more on European funds and hoped-for income from frozen Russian assets. He mentioned a plan to make $50 billion available this year, which Ukraine can use as needed.
The decision to cut aid was first reported by Reuters. This explains the German coalition’s unexpected budget agreement after an all-night session two weeks ago. Chancellor Olaf Scholz, Lindner, and Vice Chancellor Robert Habeck had struggled to fund social programs and climate initiatives without breaking debt rules.
They announced the budget move just before Berlin’s summer holiday. This timing shows they knew the decision was politically sensitive. Kyiv may see it as another example of Germany over-promising and under delivering on aid.
Germany has previously been slow to help Ukraine, initially offering helmets before the full-scale invasion. Despite this, Germany has done more for Ukraine than any other European country, providing artillery shells, armoured vehicles, air defence, and other systems. Defence Minister Boris Pistorius has urged other countries to do the same, especially on air defence.
Chancellor Scholz has emphasized Germany’s aid to Ukraine and urged other European countries to do more. This is crucial as a possible re-election of Donald Trump in the U.S. could mean less American aid to Ukraine, leaving Europe to fund and arm Ukraine alone.
If Trump wins the U.S. presidential election, Berlin might need to reverse its decision to cut aid. Despite the cabinet’s approval of the draft budget, the final budget must still pass through parliament. Lawmakers from the three governing parties need to finalize the details by the end of the year.
Ingo Gädechens, a lawmaker from the CDU, criticized the government, saying their promises to support Ukraine are empty. Germany’s fiscal flexibility is limited by its constitutional debt brake, restricting the federal deficit to 0.35% of GDP except in emergencies. Finance Minister Lindner has not declared the war in Ukraine an emergency.
The coalition is also divided on how to finance its own military needs. Scholz promised to rebuild Germany’s armed forces and meet NATO’s 2% GDP spending target. Germany is likely to meet this target with a special €100 billion fund created in 2022. However, this fund will run out by the end of 2027, raising questions about funding from 2028 onward.
Lindner stated that in 2028, Germany will need an additional €38.9 billion. He said Germany will either need to grow faster or take on more debt, a fundamental issue for the next federal government to address.