Up in Arms
Angry at Trump, the Continent is
unifying and militarizing with haste.
Germany is moving fast to rearm. The nation held elections on February 23. It has yet to agree on a coalition—but on March 4 it agreed to what would be one of the biggest increases of the German military since the end of World War ii.
Donald Trump and Vladimir Putin have, between them, shocked Germany into action.
United States Defense Secretary Pete Hegseth traveled to Europe on February 10 demanding that European powers boost their spending—not to 2 percent of their annual economic output as President Trump demanded during his first term, but to 5 percent. Vice President JD Vance supported that message at the Munich Security Conference February 14-16, accusing Europe of turning its back on democracy and free speech, and warning that there would be no more support from America if this was the case.
Finally, on February 28 Donald Trump and Volodymyr Zelenskyy held their explosive meeting, arguing and shouting over each other in front of the press. Shortly afterward, Trump cut off aid and then intelligence from Ukraine.
Much of this is understandable. The U.S. does shoulder the burden of Europe’s defense. It has spent millions propping up Ukraine. It seems clear that Hunter Biden and other Biden family members had corrupt dealings in Ukraine that its current leaders have not exposed.
Nevertheless, these moves are terrifying Europeans. They are realizing they cannot rely on the U.S., and that without America’s protection they are naked and vulnerable in a dangerous world.
Germany Goes Nuclear?
Even before Germany’s elections, Friedrich Merz, Germany’s likely next chancellor, gave a bold speech. “We need to have discussions with both the British and the French—the two European nuclear powers—about whether nuclear sharing, or at least nuclear security from the [United Kingdom] and France, could also apply to us,” he said.
Politico noted that this marked “a huge shift in position” and “a major strategic shift for Germany.”
These are themes that French President Emmanuel Macron has brought up repeatedly, but that Germany has been coy about. In 2020, after one such outburst, Trumpet editor in chief Gerald Flurry wrote, “A clear trend is taking place: President Macron demands what Germany wants. I don’t believe Macron would ever say what he said unless Germany approved of it. He acts as a sort of puppet to Germany!”
“Imagine if a German chancellor gave a speech like Mr. Macron did, demanding that all Europe support Brussels’ dictates,” he wrote. “Germany wouldn’t dare make such a proposal right now! But it is definitely in Germany’s interest—and Macron is the one pushing for it!”
Now, Germany dares.
In his election victory speech, Mr. Merz continued with this theme. “My absolute priority will be to strengthen Europe as quickly as possible so that, step by step, we can really achieve independence from the U.S.A.”
That is a stunning statement from a German leader—and, again, reminiscent of statements from Macron.
Unsurprisingly Mr. Macron was quick to respond. Within days, a French official told the Telegraph they could easily send a military jet with nuclear bombs to Germany, and that such an action might also pressure Britain to share its nuclear missiles. Then Mr. Macron himself replied on March 5: “Responding to the historic call of the future German Chancellor, I have decided to open the strategic debate on the protection of our allies on the European continent through our (nuclear) deterrence.”
Germany currently has American nuclear bombs. But that gives the U.S. a lot of leverage: Do what we want, or we remove your nuclear umbrella. This offer from France strengthens them greatly against the U.S.
But the most dramatic announcement came from the leaders of main German parties on March 4.
A Military Superpower
The deal between the right-wing Christian Democrats (cdu) and left-wing Social Democrats (spd), proposed by Friedrich Merz, would amend the German constitution, eliminating all restrictions on military spending. The constitution limits how much Germany can borrow. Under the new deal, all military spending above 1 percent of gdp would not count toward the debt limit; if the money is for weapons, Germany can borrow as much as it likes. The deal would unlock €500 billion for infrastructure over 10 years and make it easier for states to borrow money.
These two parties introduced Germany’s constitutional balanced budget rule in 2009, and now they are ready to kill it.
EuroIntelligence called the plan “without a doubt the biggest U-turn in Germany since 1969 when Germany started to revalue the D-mark. And it has been made possible by Donald Trump. The sheer depth and the breadth of the coalition agreement goes beyond anything political observers, us included, imagined possible.”
Berenberg Bank’s chief economist, Holger Schmieding, called Merz’s proposal “a really big bazooka,” and “a fiscal sea change for Germany.” “Germany is finally taking on the leadership role which, given its size and its fiscal space, it should have assumed years ago,” he said.
Germany Thinks the Unthinkable
Leaked plans show Merz wants to spend an extra €400 billion on defense, though it is unclear on what timescale.
Back in 2022, Chancellor Olaf Scholz announced a €100 billion fund to boost defense spending. He was clear that it would be in addition to Germany spending 2 percent of its gdp on its military, the nato minimum. Later he watered down this pledge, and used the fund to bring Germany up to that nato minimum level of funding.
What Merz proposed is four times larger. Last year Germany spent €61.9 billion on its defense. An extra €400 billion is colossal. If spread over five years, German defense spending would more than double.
“The immense figures under discussion in Berlin would have been politically unthinkable a week ago, before the total loss of faith in U.S. friendship,” wrote the Telegraph’s Ambrose Evans-Pritchard. “If enacted on anything close to this scale, such a high-octane blast of military Keynesianism will entirely change the economic and geopolitical shape of the world” (March 5).
Marcus Söder—leader of the Christian Social Union party, which works with the Christian Democrats—spelled out what they wanted. “We need a drone force of 100,000 drones, 800 new tanks, 2,000 Patriot missiles and 1,000 Taurus just for Germany as a protective shield like the ‘Iron Dome,’” he said. “Only the strong will be taken seriously.”
European Military Spending
The same day as Merz voiced his plans, European Commission President Ursula von der Leyen announced a similar rearmament push for all of Europe. “We are in an era of rearmament,” she said. “Europe is ready to massively boost its defense spending.”
This plan would also mean that money borrowed for military spending would be exempted from European funding rules. The European Commission would provide €150 billion in loans for defense.
Von der Leyen’s plan will make a difference—but not as much as Merz’s. Many EU states are close to maxing out their credit cards. France is the EU’s second-largest military spender. Their debt is 110 percent the size of their economy. Italy, in third place, has a debt-to-gdp ratio of over 130 percent. Neither can easily borrow more. By contrast, Germany’s debt-to-gdp ratio is just 62 percent. Germany already has the EU’s largest defense spending. Merz’s plan would make it imposingly dominant, leaving France and all other EU nations in the dust.
Across Europe, stocks in defense firms are soaring. Rheinmetall shares rose nearly 20 percent in the few days of trading after the Trump-Zelenskyy fracas. bae Systems rose 16 percent; Germany’s Hensoldt AG, more than 30 percent; France’s Dassault Aviation, 10 percent; France’s Thales SA, which makes defense electronics, better than 20 percent. Investors clearly expect a bonanza of military spending.
Redesigning Factories
While defense is booming, Europe’s manufacturing industry as a whole is struggling. There is an obvious solution.
Germany’s current chancellor, Olaf Scholz, announced in February that the Alstom train factory in Görlitz would stop making train carriages and instead build tanks, after the Franco-German defense giant knds took it over. A few weeks later, Rheinmetall announced it will retool two factories making car parts into manufacturing ammunition.
The Italian news outlet Corriere della Sera published leaked details of plans to shift Italy’s auto industry to making arms. Subcontractors in Italy currently make parts for the German car industry; they could shift to supplying the German arms industry. “It is becoming obvious to everybody that defense spending is the way to offset job losses in the car industry,” said Schmieding.
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