German opposition leader Friedrich Merz signals defence spending increase

German opposition leader Friedrich Merz, expected to become chancellor in next month’s election, stated on Wednesday that Germany would increase defence spending but stopped short of endorsing NATO’s 5% GDP target proposed by U.S. President-elect Donald Trump.

Speaking to Bayerischer Rundfunk, Merz said, "We first really have to reach the 2% lower limit in Germany. We are not there yet," adding that specific percentages were less important than ensuring effective defence capabilities.

Markus Soeder, leader of the Christian Social Union (CSU), agreed that military spending should increase, suggesting it should rise to "well over 3%." However, Germany’s current ability to meet NATO’s 2% target relies on a special fund set to expire in 2028, raising concerns about maintaining this level of expenditure.

Defence spending has become a central campaign issue ahead of Germany’s 23 February parliamentary elections, with pressure mounting due to Trump’s proposals and tensions with Russia.

While Merz believes Germany can finance increased defence spending without special funds, Economy Minister Robert Habeck of the Greens has proposed a 3.5% target funded through loans. Social Democrat Dirk Wiese dismissed Trump’s demands as "complete madness" and criticised Habeck’s proposal as "somewhat half-baked," echoing outgoing Chancellor Olaf Scholz.