“If Europe wants to avoid war, Europe must prepare for war,” were the words used by Commission President Ursula von der Leyen on the same day that the German parliament voted to amend the Constitution.
As is well known, the amendment was voted to bypass the “debt brake” on military equipment, a move that marks a turning point in Germany’s post-war history.
Von der Leyen’s admission, a variation on the Latin saying “si vis pacem para bellum” (if you want peace, prepare for war), awakens historical memories that go back more than a hundred years.
It echoes the spirit of the speech delivered in the Reichstag by the then Chancellor of the German Reich, Theobald von Bethmann-Hollweg, on August 4, 1914, at the session that granted war credits to the Kaiser for the conduct of World War I.
After emphasizing the peaceful intentions of the government, the Chancellor adopted the war cry of Emperor Wilhelm II: “Only in defense of a just cause will our sword be drawn from its scabbard. The day has come when we must draw it – against our will, against our honest efforts. Russia has set fire to our house. We are in a forced war with Russia and France.”
We know what happened next. The greatest bloodshed that Europe had ever known followed, and paved the way for the even bloodier and more destructive World War II.
Military Keynesianism
The concept of military or militaristic Keynesianism is constantly resurfacing in public discourse, as Europe – with Germany at the forefront – enters the arms race. While Keynesianism argues that increased public spending can stimulate the economy, its military version emphasizes military spending, over spending on health, education and social welfare.
A version of militaristic Keynesianism was implemented by the US in World War II, when a gigantic program of state investment – spearheaded by the military industry – acted as a lever to restart and grow the economy after the Crash. Many say that it was not the social aspect of Roosevelt’s New Deal that saved the US, but the “war effort”. But so did the Nazis of the Third Reich, financing enormous military spending from state deficits – even though they were not at all “Keynesians”
The German doctrine of militarization
Matthew Reed, researcher and coordinator of the Berlin-based Zetkin Forum for Social Research, analyzes the consequences of the new doctrine of militarization, which now dominates Europe.
The decision approved by the outgoing German parliament, a few days before its dissolution, inaugurates the largest armaments program in Germany since the founding of the Federal Republic in 1949, the analyst notes.
The conservative Christian Democratic Union (CDU) and the Social Democratic Party (SPD) – still negotiating a coalition government after the new Bundestag convened on March 25 – secured the support of the Greens to pass a revision of the Schuldenbremse, Germany’s strict anti-debt law enacted in 2009.
Development through armaments
The three centrist parties rushed to pass the amendments in the last week of the outgoing parliament, because otherwise they would have to rely on the support of the far-right Alternative for Germany (AfD), which won an additional 69 seats in the new parliament.
While the AfD is not opposed to increasing military spending, cooperation with the far-right party remains taboo for many Germans and would risk both prolonging the negotiations on militarization and provoking greater public backlash.
Driven by the CDU-SPD-Greens trio, the amendments met with limited popular resistance and enjoy the support of business, the climate lobby and the trade union leadership.
After the imposition of broad sanctions on Russia in 2022 and China’s productivity lag in key sectors such as electric cars, the German economy is stuck in a two-year recession.
With the arrival of US tariffs, the projected growth of 0.2% for 2025 now looks illusory. In the shadow of a third consecutive year of recession, businessmen, media commentators and even union leaders are now advocating a strategy of “growth through armaments” as a lever to restart the economy.
The “special package” for infrastructure as a “fig leaf”
The “special financing package for infrastructure and climate neutrality” that accompanies the increase in militarization will be financed with 500 billion euros of additional borrowing. These funds will be distributed over 12 years. However, it has not yet been clarified where they will be directed. As part of the infrastructure, SPD politicians mention rail and road networks, ports, energy supply, education and hospitals.
However, without any concrete targets having been practically set, the incoming CDU-SPD government is free to define what falls under the category of “infrastructure”. The “special financing package” ultimately serves two purposes: it is a fig leaf to appease striking nurses, train drivers and car workers, and it will expand the infrastructure needed to supply the military supply chain.
Escape clauses
The transition to a war economy is being hailed as a win-win in Berlin and Brussels. On the one hand, strengthened national armies in Europe can further increase the pressure on the European Union’s main enemy, Russia.
As Polish Prime Minister Donald Tusk put it on 6 March 2025: “Europe must participate in this arms race and win it… I am convinced that Russia will lose this arms race – just as the Soviet Union lost a similar arms race 40 years ago.”
At the same time, increased military spending has the potential to be a game-changer for Europe’s largest economies.
While EU states currently rely heavily on imported American military equipment, the European Commission President has repeatedly stressed the need to “buy more European military equipment.”
To facilitate this, von der Leyen announced a new “national escape clause” that would allow member states to bend otherwise rigid fiscal rules if the purpose is exclusively for military spending.
War industry
Share prices of European arms companies such as Rheinmetall and Leonardo have soared after the EU announced its €800 billion “ReArm Europe” plan.
The number of people employed in the EU’s arms industries is constantly growing, and, at around 581,000 people across the EU in 2023, was around 15% higher than in 2021. For EU companies struggling against Chinese supremacy and US protectionism, militarization also offers an urgently needed lifeline. Volkswagen, for example, recently announced that it is open to returning to military vehicle manufacturing, which was one of the company’s main production lines during the Third Reich.
German elites have thus embarked on a comprehensive transition from neoliberal austerity to wartime Keynesianism. Their strategy can be summed up in the words of Dutch Admiral Rob Bauer: “The army may win battles, but the economy wins wars.”
