Germany’s imperialist rulers are making a sharp shift to boost preparations for war — and to kick-start their floundering economy — with a historic debt deal. Their goal was captured in a Financial Times headline, “From a welfare state to a warfare state.”
This move was hastened by sharpening competition and conflicts between capitalist rulers worldwide, including Washington’s move to shift its gun sights from Moscow to Beijing. This includes its efforts to broker a rapid “peace” deal between Moscow and Kyiv and to pressure European powers to shoulder the responsibility for Ukraine’s security.
The imperialist world order, lorded over by the U.S. rulers since they emerged victorious from World War II, is coming apart.
From his first term, President Donald Trump has demanded European powers take a far greater share of the responsibility and expense for their own defense.
The German rulers’ military is in decrepit shape. “German land forces are down to a readiness of around 50%,” Col. Andre Wuestner of the German Armed Forces Association told Reuters Feb. 13. For instance, they admit they have virtually no drones at all. Conscription was abandoned in 2011.
Army barracks are in a “disgraceful state,” Reuters reported, pointing to a “lack of working toilets, clean showers and Wi-Fi.”
Rival European powers, with Berlin in the lead, are now fast-tracking plans to bolster their militaries, upgrade their arsenals and reduce their dependency on the U.S. “nuclear umbrella.”
Just over a week after Germany’s recent elections, Friedrich Merz, the country’s chancellor-in-waiting, announced March 4 his conservative Christian Democrats and likely coalition partners, the Social Democrats, had made a deal. Berlin’s rearmament was given added urgency, he said, after “recent decisions by the American government.”
The plan would end Berlin’s long-standing “debt brake” imposed after the 2008 financial crisis, to allow potentially unlimited borrowing for military spending. It would also create a 500 billion euro ($540 billion) 10-year fund to drive infrastructure investments in roads, rail and other steps to strengthen the capitalist economy.
Up to 1 trillion euros of additional borrowing would become available over the next decade, equivalent to more than a fifth of Germany’s entire gross domestic product today. This, Berlin hopes, will resurrect Europe’s largest economy after years of stagnation.
To overturn Germany’s constitutional limits on debt requires a two-thirds parliamentary majority. To pass the changes, Merz needs to win the Greens to back the deal before the new Bundestag is seated March 25. Otherwise, the parliament’s enlarged right and left contingents could block the accord.
Deutsche Bank said the speed and size of the proposed “fiscal expansion is reminiscent of German reunification” in 1990.
“Political developments in Europe and the world are evolving faster than we anticipated just a week ago,” Merz said. He also called for reintroducing compulsory military service.
A parallel plan, “ReArm Europe,” was launched the same day by European Commission President Ursula von der Leyen. It allocates 800 billion euros overall, with 150 billion euros to be loaned to European Union member governments to buy missiles and drones, artillery and ammunition, tanks and trucks, as well as for air defenses and cybersecurity.
“Mobilize Europe’s immense resources,” von der Leyen urged, “to unleash our industrial and productive power” to uphold our mutual “security.” More accurately, this means to strengthen Europe’s capitalist rulers’ ability to wage war to protect their investments and profits.
For years the German rulers, top dog in the EU, have faced an industrial slump sharpened by high energy costs, competition from cheaper products from China, and now new tariffs threatened by Washington. Removing the debt taboo will allow struggling auto giants like Volkswagen to repurpose idle factory capacity into armaments production. Stock prices for German arms manufacturers like Rheinmetall and Thyssenkrupp soared.
Spread of nuclear arms
Both Merz and French President Emmanuel Macron see using existing French and British nuclear arms to stand as protection for Europe, as Washington is discussing removing their decadeslong deployment there. And the German rulers are weighing the possibility of breaking another taboo — the development of nuclear weapons in Germany.
Polish Prime Minister Donald Tusk March 7 raised Warsaw joining in, acquiring “nuclear weapons and modern unconventional weapons.”
As national ruling classes are increasingly driven to maneuver for advantage against foes and friends alike, more will seek to acquire nuclear weapons.
Out of 160,000 U.S. troops stationed around the world, the second-largest contingent is in Germany. This was boosted to 50,000 troops after Moscow’s all-out assault on Ukraine. U.S. nuclear weapons are based at the Buchel Air Base in western Germany. Thousands of U.S. troops are stationed further east, in Poland, Romania and Bulgaria.
The Socialist Workers Party calls for Moscow to get its invasion forces out of all Ukrainian territory. The party also demands Washington get its armed forces and nuclear weapons out of Europe, all of Europe.