Berlin’s public debt is on track to reach nearly 100% of GDP by 2040, government economic advisers have warned
Germany’s continued military buildup, financed largely through government borrowing, could push public debt to nearly 100% of GDP by 2040, an independent government advisory body has warned, urging Berlin to promptly rein in spending.
The country’s deeply ingrained cultural and political aversion to debt has been slipping under the weight of an eroding economy and rearmament program aimed at confronting the supposed threat from Russia.
Germany launched a €100 billion ($122 billion) military buildup and restructuring program in the wake of the escalation of the Ukraine conflict in 2022 under then-Chancellor Olaf Scholz. His successor, Friedrich Merz, has doubled down on this policy, vowing to turn the German military into Europe’s strongest conventional force while maintaining military support for Kiev.
“Public finances in Germany are coming under growing pressure. In the federal budget, projected revenue will not be sufficient to cover the planned spending in the longer term,” the German Council of Economic Experts (GCEE) warned in its annual report released on Wednesday.
According to the German Taxpayers Federation, the nation’s debt burden is currently increasing by €7,052 per second, with every citizen being effectively €34,046 in debt on behalf of the state.
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