Germany misappropriates over a third of additional defense debt in 2025

The German government misappropriated more than a third of the new debt intended for defense spending in 2025 to finance other areas of the federal budget, an economic report revealed on Thursday.

The ifo Institute's report detailed how Germany utilized its 2025 defense debt exemption; Emilie Hoeslinger, the author of the study, stated that the state took on €28.6 billion ($33.2 billion) in additional debt under the exemption.

Hoeslinger found that €11 billion of these funds failed to generate additional defense spending, resulting in a 38.5% diversion rate.

The researcher explained that this mechanism created financial leeway in the tax-financed core budget for other nonmilitary purposes.

The institute revealed that the government allocated €900 million from this defense exemption to the federal highway company Autobahn GmbH.

The report noted that the largest legitimate defense spending increase went toward ammunition procurement, with a surge of €2.32 billion.

Hoeslinger highlighted that spending on military research and development remained low at €883.8 million, making up only 1.2% of the total exemption expenses.

The author warned that this concentration on conventional equipment ignored future-oriented capabilities like unmanned systems and cyber defense.