By: Michael Meyer
History sometimes appears like an endless series of bad jokes. There is a popular expression to describe the phenomenon that those least expected often find themselves initiating world-historic change: “Only Nixon could go to China.” The newest addition to this genre is the life and death of Germany’s ‘debt brake’, a constitutional deficit spending limit that has become somewhat emblematic of European austerity politics – I wrote about it in the latest issue of the JASON Magazine. Up until the federal election in February, the debt brake stood steadfast as a pillar of German fiscal policy as if it were the Eleventh Commandment. Naturally then, in one of history’s ironic turns, the end of the debt brake as we know it has not only come much sooner than expected, but it was moved to the dustbin of history by the very same coalition of Christian Democrats (CDU) and Social Democrats (SPD) that introduced it 16 years prior, led by a conservative chancellor who is known as one of Germany’s primary austerity hawks: Friedrich Merz.
For the entirety of the previous government’s existence, the debt brake had been the bane of every reform that the SPD and the Greens had hoped to implement. Their own intra-coalition quarrel with the liberal FDP aside, it was the CDU as the main parliamentary opposition that wrestled down attempts to bypass Germany’s tight deficit spending rules at the constitutional court in 2023, triggering a chain of events that would ultimately lead to the government’s collapse in the following year. After the fall of the ‘progressive’ coalition, the conservatives assumed the leading position to take their place and quickly gave up their hardline opposition to reforming the debt brake as well. A simple reminder that times have changed did the trick: “In view of the threats to our freedom and peace on our continent, the rule for our defence now has to be ‘whatever it takes’”.
Court Jesters of Trumpism
Germany’s fiscal volte-face is an expression of a larger European trend catalysed by a political earthquake. While Donald Trump’s electoral victory last November already reignited debates about more European independence from the US, the real kicker followed three months later. On 28 February, Ukrainian President Volodymyr Zelensky met US President Trump and Vice President JD Vance in the Oval Office for a highly anticipated, televised meeting. Their discussion over continued American support for Ukraine and a controversial minerals agreement quickly devolved into a heated confrontation. Trump and Vance pressed for Ukraine to agree to an immediate ceasefire with Russia – something Zelensky expectably resisted without firm security guarantees. The meeting ended abruptly and with threats to withdraw all US support for Ukraine, in turn drawing widespread criticism from US allies.
Zelensky, as many say, stepped into Donald Trump’s trap. The escalation of this viral event retroactively manufactured legitimacy for what Trump had planned to do all along. It is, to use Joe Rogan’s favourite phrase, entirely possible that others have stepped into the very same trap. Before his election, Trump repeatedly announced that he would make the European NATO members pay their fair share where they had previously unduly profited from the US’s security guarantees, meaning that they would have to invest two percent or more of their annual GDP in defence. By provoking the break with Zelensky and threatening to pull the plug for Ukraine, Trump stirred up the leaders of European NATO states like a flock of headless chickens. All of a sudden, a war that is being perceived as an existential conflict for the future of Europe is now entirely Europe’s own responsibility. There is an undeniable irony to the way European leaders were pushed to spend way North of the demanded two percent on their militaries in an effort to unite against Trump, when really they are doing his bidding.
Yet, there is more to it than just a bad breakup. From the European perspective, the official reason for the planned militarisation of the continent is a growing threat posed by Russia: “If Putin wins, he will not stop at Ukraine.” It is, however, highly questionable whether the EU and European NATO members are defending themselves against such a clear and present military danger. Surely, recent airspace transgressions in the Baltics could be read as an intentional provocation to sow discord between EU members. But viewing these incidents as precursors of an imminent attack fails to acknowledge that there is neither elite nor public support for a direct military confrontation with NATO, and Russia clearly lacks the capabilities to sustain such a confrontation even if it wanted to. Even with the US chickening out, the military budget of NATO-Europe is already significantly bigger than that of Russia, which is still struggling to gain ground in its ongoing war against a much smaller army. Is Europe simply overreacting due to ‘war fever’, then? Perhaps there is another angle to be considered here. When abandoning the narrow focus of current security discourse, it becomes apparent that the massive military buildup is inextricably tied to economic developments.
Make Cars, Not War!
More precisely, the need to address long-standing underinvestment problems has led to the return of an approach to economic policy often called military Keynesianism. With traditional European industries struggling and economic stagnation becoming the new normal, military spending offers a convenient solution that allows governments to pump money into the economy while avoiding accusations of fiscal irresponsibility. It is politically palatable precisely because it can be framed as a necessity rather than a choice. What could not be done to save the climate or build infrastructure can suddenly be done to build tanks and missiles.
This economic dimension is particularly instructive for the German case. The recent shift in funding priorities means that the struggling car industry is increasingly crowded out by arms production, effectively staging military Keynesianism as an easy fix to address the country’s stagnating GDP. “The Germans can’t sell their cars. So they make tanks”, as the Financial Times put it. Since Trump’s inauguration and the announcement of Merz’s armament plans, Rheinmetall’s market capitalisation has more than tripled and surged to 55.7 billion euro in March, surpassing the steadily declining car manufacturer Volkswagen at 54.4 billion euro for the first time in history. The military tech giant recently announced plans to take over one of Volkswagen’s now unused production plants. Of course, the downward spiral of the once prosperous and internationally acclaimed German car industry is only one example, but it is symbolic for the country’s export-economy like no other.
For many in German politics, it has long been clear that the economy is in desperate need of investments on a historic scale. However, after decades of ideological mobilisation against deficit spending, such a U-turn would have been an untenable endeavour for either major party of the political centre. If it was going to happen, it would have to be for a cause much greater than the German economy, and the shock left behind by Russia’s full-scale invasion of Ukraine provided exactly that. Former social democratic chancellor Olaf Scholz made the first attempt, but his widely received Zeitenwende-speech remained little more than smoke and mirrors. Among the reasons for the Social Democrats’ inability to mobilise more state resources was its liberal coalition partner, and internal conflicts pertaining to concerns of a possible escalation hampered the commitment to a more active role in Ukraine. Contrary to his predecessor, Friedrich Merz now has the mandate of heaven. Considering the chaos created by Zelensky’s unlucky meeting in the White House, he is well equipped with a plausible cause and faces no relevant opposition to the core idea behind his plans.
It is certainly welcome that the artificial constraints on the production capabilities of the German economy are at least partially lifted. Yet, the focus on military spending should raise grave concerns. Not only because real resources are still limited: a finite amount of labour power, steel, and energy can only be used to produce a finite amount of goods, regardless of whether they are military or civilian. But also because the employment of military equipment becomes a temptation once it is readily available. This aspect is particularly worrying in light of the dizzying speed of the radical right’s growth. Even if current centrist governments in liberal democracies could be trusted to use their armies exclusively for defensive purposes (and there are many examples in recent history to doubt this), it remains an increasingly real possibility that it could eventually fall into the hands of the hard right. In April, the Alternative for Germany (AfD) polled ahead of the CDU for the first time, making it the strongest party in the country. Should a right-wing extremist force like the AfD come to power, it would obtain command over a military that was conveniently stacked up by its predecessors. Moreover, far right ideologies are already alarmingly common within Germany’s armed forces. Notoriously right-wing units like the Special Operations Forces (KSK), whose members have repeatedly been accused of building a ‘shadow army’ with weapons stolen from its official inventory, will be beneficiaries of these investments.
Compulsory Freedom
This concern is hardened by the fact that economic militarism comes alongside a militarisation of society at large. In March, the German government officially established a new Heimatschutzdivision (Homeland Security Division), intended solely for domestic operations. This division is tasked with protecting critical infrastructure such as transport routes, depots, and power plants in the event of war. But its mission also includes suppressing possible hunger revolts and anti-war protests. Regular exercises include training for actions against striking workers and demonstrators, often in cooperation with the police. The move is framed as necessary to ensure ‘peace and order on the home front’ while Germany engages in external military operations. Meanwhile, Germany’s Green Party, once the champions of pacifism, proposed a compulsory ‘freedom service’ that would require all adults from 18 to 67 years of age to spend six months either in military service or in civilian crisis management. The proposal, framed as promoting ‘social cohesion’ and ‘resilience’, represents a jarring reversal of the party’s historical opposition to military conscription and compulsory service.
The notion of defending freedom and democracy against the aggressive authoritarianism of the great powers serves as a major framing device for all current European militarisation campaigns. Ironically, it is precisely the same militarisation agenda that facilitates the erosion of democracy, freedom, and basic rights on the continent. Across Europe, there is a marked shift toward military readiness over efforts to maintain peace with diplomatic means. The European Commission has unveiled major new initiatives to increase defence spending, amounting to a total of 800 billion euro to support the arms industry, including a 150 billion euro loan facility provided directly by the EU. At the same time, European governments are cracking down not only on social spending but also on worker’s rights, including the eight-hour work day, undoing major historical achievements of the labour movement.
There is a growing consensus among EU leaders that Europe must ‘take greater responsibility’ for its own security, reduce dependence on the US, and prepare for potential war, particularly with Russia. This militarisation is accompanied by a decline in public debate about peace strategies, with dissenting voices increasingly criminalised. Serious infringements on fundamental rights, such as travel bans and account freezes, imposed as sanctions on individual journalists through merely administrative decisions by the EU council without court hearings and convictions demonstrate a dismantling of rule of law principles, the separation of power, and press freedom in Europe. Increasingly, the challenging of official narratives regarding geopolitical conflicts, especially Gaza and Ukraine, is quickly equated with crime and treason under dubious accusations of supporting terrorism, antisemitism, or spreading disinformation and propaganda. In employing these uncannily familiar techniques, European states and the EU mirror the authoritarianism they claim to fight.
Edited by: Luca Vousten and Petra Massaro
Image Source: Canadian WWII industrial propaganda poster (1940). Photo credits: Pratt and Whitney Aircraft Company Limited via Wikimedia
