Chancellor Olaf Scholz, in a major shift for Germany’s defence policy, has committed 100 billion euros ($113bn) in military spending as he promised a revamp of the country’s armed forces following Russia’s invasion of Ukraine.
“It’s clear we need to invest significantly more in the security of our country, in order to protect our freedom and our democracy,” Scholz said on Sunday during a lengthy special sitting of the German parliament in Berlin.
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“We will from now on, year after year, invest more than two percent of gross domestic product (GDP) in our defence,” he said.
Germany, Europe’s strongest economy, has come under criticism from the United States and other NATO allies for not investing adequately on defence. At a 2014 NATO meeting, former Chancellor Angela Merkel had pledged to increase the country’s military expenditure to more than 2 percent of its GDP by 2024, but later said the country would not have met that target until well after the agreed timeframe.
“We will set up a special ‘Bundeswehr’ fund,” Scholz told legislators, adding that the budget will be used for investments and armaments projects and that the special army fund should be written into the constitution.
Al Jazeera’s Dominic Kane said the speech marked a “clear change of policy” that “effectively tore up the playbook of successive German governments since the end of the Cold War”.
Crucially, Scholz also announced the construction of two new terminals for liquefied natural gas in response to what some critics said was Germany’s over-reliance on Russian gas.
The terminals are to be located in Brunsbuttel and Wilhelmshaven in northern Germany, he said.
Following Russia’s invasion of Ukraine, Germany put on hold the Nord Stream 2 gas pipeline project designed to bring Russian natural gas directly to Germany via the Baltic Sea.
Germany intends to phase out its nuclear power production by the end of this year, leaving observers questioning how Europe’s biggest economy will fulfill all of its energy needs.
Scholz also noted that heavy sanctions imposed by Western allies against Russia were already showing effect, warning that further embargoes could come if Moscow failed to change course.
“Already in the last week, the Russian stock markets sank by more than 30 percent. That shows: our sanctions are working,” said Scholz. “And we reserve the right to impose further sanctions,” he warned.
On Sunday, Germany also imposed a three-month ban on all Russian flights from its airspace from 14:00 GMT, the transport ministry said, adding that humanitarian flights would be exempted.