German rearmament threatens welfare state, analysis finds

A new analysis in Der Freitag argues that Germany's massive rearmament spending, financed through debt, will directly undermine the welfare state. Interest payments on debt-financed military expenditures are projected to exceed €65 billion by 2029, consuming one in eight euros of the federal budget. While the government claims that special funds and the welfare state remain separate, the article contends that the old 'butter or guns' trade-off applies. The suspension of the debt brake for defense and the creation of a special fund for war goods will lead to draconian cuts in transfer payments, healthcare, and pensions. The author, Velten Schäfer, traces the fiscal logic back to the 'Swabian housewife' principle that one can only spend what one earns, and each euro only once. The piece concludes that the connection between exploding arms spending and social cuts is direct and unavoidable.