dw.com
Germany's Military Spending Surge: Economic Boom or Risky Gamble?
Germany's Bundestag approved a multi-billion Euro investment package on March 18th, 2025, prioritizing infrastructure and defense spending, leading to a significant boost in the arms industry's profits but drawing concerns from economists about its limited overall economic impact.
- What are the immediate economic consequences of Germany's decision to drastically increase military spending?
- On March 18th, 2025, the Bundestag approved a multi-billion Euro infrastructure investment package, significantly increasing defense spending and potentially making Germany's military the strongest conventional force in Europe. This decision led to a surge in the stock prices of German arms manufacturers, such as Rheinmetall, whose share price increased from €59 in 2020 to between €1700 and €1800 in June 2025.
- What are the potential risks and downsides of Germany's focus on military spending as a primary driver of economic growth?
- The economic impact of Germany's increased military spending will be limited, despite the short-term gains for the arms industry. The lack of competition in this sector due to high demand may lead to inflated prices and increased profits for arms companies, rather than broader economic growth. Long-term, this strategy may hinder investment in more economically productive sectors.
- How do economists assess the long-term economic impact of increased military spending compared to investments in other sectors, such as infrastructure and education?
- This massive investment, while boosting the arms industry and some related sectors, has drawn criticism from economists. Studies suggest that every Euro invested in military spending generates only €0.50 in additional economic activity, significantly less than investments in infrastructure or education. This is because military equipment doesn't create ongoing economic value; it's akin to insurance, with potential loss if unused.
Cognitive Concepts
Framing Bias
The article's framing subtly favors the narrative of economic opportunity, particularly for the military industry. The headline (if there was one, implied from the text) and opening sentences highlight the unprecedented spending and the benefits for certain industries. While the concerns of economists are presented, the emphasis on the positive economic effects, particularly for specific companies, shapes the reader's perception towards a more positive view of this large military investment. The use of terms like "gigantic economic stimulus program" contributes to this effect.
Language Bias
The article uses language that is generally neutral but occasionally leans towards the positive when describing the economic effects of military spending. Words and phrases such as "excellent news," "golden times," and "gigantic economic stimulus program" suggest a positive assessment, and while these are presented within a balanced context, this is still a potential bias. Neutral alternatives could include "significant investment", "substantial economic effects", and "considerable economic impact".
Bias by Omission
The article focuses heavily on the economic impacts of increased military spending, giving significant attention to the perspectives of economists and military industry representatives. However, it omits perspectives from other stakeholders, such as citizens concerned about the ethical implications of increased militarization, environmental activists worried about the resource consumption of military production, or politicians who opposed the spending package. The lack of diverse viewpoints limits the reader's ability to form a complete understanding of the issue and its potential consequences. While space constraints might explain some omissions, the near-exclusive focus on economic arguments constitutes a noticeable bias.
False Dichotomy
The article presents a somewhat simplified dichotomy between economic benefits (for military industry and related sectors) and economic drawbacks (lower overall economic return compared to other investments). While acknowledging the economists' concerns, it doesn't fully explore the complex interplay between national security, economic growth, and societal priorities. The argument could be strengthened by considering that national security is not solely an economic issue and has intrinsic value beyond purely monetary considerations.
Sustainable Development Goals
The massive investment package for infrastructure and defense will create jobs in various sectors, boosting economic growth. However, the economic impact of military spending is predicted to be moderate, with each euro generating only 50 cents of additional economic activity, compared to investments in infrastructure or education that yield higher returns. The article highlights the positive impact on the arms industry, with increased revenue and stock prices for companies like Rheinmetall.