Defense budget in the federal budget: So much money

At the end of their report, the auditors made it clear: “It will be important to use the funds made available by Parliament effectively and responsibly,” says a letter from the Federal Audit Office to the Bundestag’s Budget Committee. In their report on the 2027 defense budget, the auditors point to arms inflation: increased demand and limited competition are causing sharp price increases in the industry.

This demand is also reflected in the high defense budget that the Bundestag is currently introducing. At the end of November, Parliament is expected to approve the budget for the coming year. The defense budget is the second largest item after the Ministry of Labor. According to the draft, spending on the Bundeswehr should increase by another 30 billion euros compared to the current year and then total 140 billion euros.

Around 110 billion euros come from the core budget, which is expected to total around 555 billion euros - meaning that every fifth euro from the regular budget goes to the Bundeswehr. In addition, there is almost 30 billion euros from the special debt pot for the Bundeswehr, which was set up in 2022 as a result of the Ukraine war.

A look at the books makes it clear the sums that are being handled here: Due to a planning chaos between a Dutch shipyard and the Federal Ministry of Defense, it has long been clear that a major major project of the Navy, the construction of Class 126 frigates, can hardly be implemented.

When Defense Minister Boris Pistorius (SPD) stopped the project in June, around 2 billion euros in taxpayers' money had already flowed into shipbuilding and thus been sunk. In addition, there could be claims for damages amounting to billions, which the shipyard confronted the federal government with at the beginning of October.

Military spending is in stark contrast to savings in other areas. For comparison: The cuts in housing benefit, which could affect around a million households in Germany, will save the federal and state governments 740 million euros each for 2027, according to the draft law.

The savings for the public budget correspond to the value of a Meko frigate that the Navy should get instead of the failed F126. According to the Bundeswehr, the first tranche of four ships will cost a total of 6.3 billion.

The federal government counters comparisons like this with its budget rules: the debt brake for defense spending has effectively been suspended since March 2025. The costs of military equipment can therefore be covered by new loans and are not, on the face of it, in direct competition with other expenditure.

However, this argument ignores the fact that these ever-increasing debts also incur ever-increasing interest rates, which limits the scope for future spending. According to the Bundestag, the interest burden is expected to rise from around 42 billion euros in 2027 to 81 billion euros in 2030.

There are therefore voices in the Bundestag calling for an end to the special debt rule for defense spending. So far, this criticism has come primarily from the opposition. “The debt-financed shadow budgets such as the special fund may only be reserved for temporary, exceptional situations,” said the defense policy spokesman for the Left, Ulrich Thoden.

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He criticizes “lax price controls” that would ensure massive profits for defense companies. Thoden calls for an excess profits tax for weapons manufacturers “or better yet, a price cap that limits the profits of defense companies from the outset.”

One problem here would be that the demand for weapons has increased so much worldwide that countries are queuing up at the arms manufacturers. It is common for customers to buy their way up the order lists. Germany, with its almost unlimited spending options, has long enjoyed the status of a premium customer.

The SPD MP Andreas Schwarz, as the budget manager for defense spending, is very critical of his minister Pistorius: "It's about what the money is being spent on and whether we are getting the right thing. We owe that to the troops and the taxpayer," he tells the taz.