Berlin must assume leadership to initiate fundamental systemic changes that go beyond reactive measures — this is the central message of an analysis published in December 2025 by the Institut für Europäische Politik (IEP), authored by Dr. Pia Fuhrhop and Dr. Ronja Kempin.
The war in Ukraine is deepening the divide between the US and Europe. In the second quarter of 2025, American military aid dropped to just 0.49 billion euros, while European aid rose to 20.53 billion euros. At the NATO summit in 2025, Berlin and most European alliance members committed to increasing defense spending to 5% of GDP by 2035.
The new German government under Chancellor Friedrich Merz has declared its ambition to shape the future of European defense. Merz announced that the Bundeswehr would become the strongest conventional army in Europe.
To achieve this self-imposed goal, the IEP identifies three important steps. First, Germany should clearly announce EU and NATO reforms. Within NATO, a vision for a strengthened European pillar is needed. Within the EU, Berlin should commit to additional methods for jointly financing arms procurement.
Second, Germany should clarify how it will support the Commission in building an internal market for defense equipment. Developing such a market requires waiving Article 346 of the Treaty on the Functioning of the EU (TFEU), which protects national autonomy in security matters related to arms production and trade.
Third, Berlin should critically assess overlapping bilateral and multilateral formats. While these include, for example, the United Kingdom and improve defense capabilities, their proliferation risks a loss of strategic coherence. They should be prioritized and integrated into the EU decision-making process.
Germany wants to fight for leadership on multiple fronts. In 2025, the Ministry of Defense had a record budget of 86.37 billion euros. At the European level, ties with key partners were strengthened: a new chapter was opened in relations with France, and a friendship treaty was signed with the United Kingdom. Since the start of the war, Germany has delivered weapons worth 40 billion euros to Ukraine.
Despite Germany's activity, reality constrains German ambitions. The coalition agreement defines comprehensive European strategic sovereignty but does not specify goals or changes. Implementing the IEP's proposals could lead to a reduction of national control over defense decisions, particularly in procurement, production, and arms policy. The IEP envisions a strengthened European pillar of NATO, but in practice, greater EU autonomy could shift the balance between alliance structures and national decisions.
