The Merz Administration’s Security and Defense Policy: Analysis and Future Scenarios

The newly formed German government under Chancellor Friedrich Merz represents a significant shift in Germany’s approach to security and defense policy. This report analyzes the current policy framework, explores potential scenarios, and critically examines the implications and challenges of these policies.
The CDU/CSU and SPD coalition, established in early 2025, has prioritized security and defense as evidenced by its coalition agreement beginning with this very topic. ”Germany stands before historic challenges,” states the preamble, setting the tone for a government focused on addressing what it perceives as an increasingly threatening international environment7.
Current Security and Defense FrameworkStrategic Priorities and Threat AssessmentChancellor Merz has articulated a clear threat perception, stating unequivocally that ”the European security architecture of recent decades no longer exists” and that Germany’s security is ”acutely threatened by Russia”18. This assessment forms the foundation of his government’s security policy.
In multiple speeches, Merz has emphasized that Putin’s aggression extends beyond Ukraine: ”It is a war against Europe, not just against Ukraine. It is a war – also against our country – that takes place daily”5. He specifically identifies hybrid threats including cyberattacks on data networks, attacks on supply lines, arson and murders within Germany, espionage against military barracks, and disinformation campaigns5.
Merz has also highlighted a broader ”axis of anti-democratic autocracies” comprising Russia, China, Iran, and North Korea that challenges democratic systems worldwide18. This worldview reflects a return to more traditional geopolitical thinking focused on state-based threats rather than the asymmetric challenges that dominated security discourse in previous decades.
Institutional ReformsThe cornerstone of Merz’s security architecture is the establishment of a National Security Council within the Chancellor’s Office. This body is intended to be ”the hub and pivot of the federal government” for matters of internal and external security1618.
The Council will include ministers responsible for internal and external security, representatives of the federal states, and key security authorities16. In crisis situations, it will coordinate information to ”obtain a unified situation picture” and ensure the government speaks with one voice18.
Within the first year of his administration, Merz has pledged to develop a new National Security Strategy that will ”present the starting position, describe the possibilities, and derive actions from them”18. The guiding principle will be: ”We want to be able to defend ourselves so that we don’t have to defend ourselves”18.
Defense Spending and FinancingThe Merz government has taken bold steps on defense financing. The coalition has amended the constitution to allow for debt-taking specifically for defense purposes5. Merz has initiated discussions with the SPD to approve up to 200 billion euros in special defense expenditures14, and defended a debt package with proposed borrowing of up to 500 billion euros exclusively for infrastructure and defense measures2.
The coalition agreement states that defense expenditures must ”rise significantly and stringently” by the end of the legislative period, aligning with NATO capability targets7. Though specific numbers are avoided in the coalition agreement, previous statements from the CDU/CSU parliamentary group called for at least 2% of GDP to be spent on defense annually in accordance with NATO guidelines9.
Military Reform and ModernizationA major focus of the Merz administration is reforming the Bundeswehr’s procurement system, which has long been criticized for inefficiency and delays. The coalition plans to implement a new law to accelerate planning and procurement in the first half of its term8, building on a 71-point concept previously developed by the CDU/CSU to modernize the procurement system8.
The government will establish a multi-year investment plan for defense capabilities to ensure long-term financial planning security7. This includes modernizing technologies, European satellite surveillance, and drones as necessary steps to strengthen Germany’s security and NATO partnership2.
Notably, despite discussions about conscription, the coalition agreement does not include a return to mandatory military service7.
Policy Options and Future ScenariosScenario 1: Accelerated Military BuildupUnder this scenario, the Merz government would fully utilize the approved special funds to rapidly increase Germany’s military capabilities, focusing on both conventional deterrence and response to hybrid threats.
Potential outcomes: Enhanced deterrence against Russia, stronger position within NATO, increased military readiness, and potential leadership in European defense integration.
Devil’s advocate perspective: This massive spending increase could strain Germany’s already challenged fiscal position. The focus on military solutions might escalate tensions with Russia rather than reduce them. As seen in previous German rearmament efforts, spending money effectively remains a challenge – simply having funds doesn’t guarantee effective force modernization8. The planned reforms of the procurement system may not deliver results quickly enough to ensure effective spending of the new resources.
Scenario 2: European Defense Integration LeadershipIn this scenario, Germany under Merz would prioritize European defense cooperation, standardization of equipment, and joint capabilities development.
Potential outcomes: More efficient allocation of resources across Europe, stronger collective deterrence, reduced dependence on the US, and a strengthened European pillar within NATO.
Devil’s advocate perspective: Merz has specifically rejected common funding mechanisms for European defense18, which could limit the depth of integration possible. European defense integration has been attempted repeatedly with limited success due to divergent national interests. France and other partners might resist German leadership in this domain. The German defense industry might oppose standardization that threatens its market position.
Scenario 3: Comprehensive Security ApproachUnder this scenario, the National Security Council would effectively coordinate both internal and external security policies, addressing conventional military threats alongside hybrid warfare, terrorism, and cybersecurity challenges.
Potential outcomes: More coherent security policy, better coordination across government departments, improved response to non-traditional threats, and enhanced resilience against Russian hybrid operations.
Devil’s advocate perspective: The expanded surveillance powers and stricter security measures could raise civil liberties concerns. The coalition has been described by critics as a ”Great Control Coalition” with plans for biometric surveillance and AI for facial recognition in public spaces15. The National Security Council might concentrate too much power in the Chancellor’s office, reducing ministerial independence and potentially creating constitutional tensions.
Scenario 4: Ukraine-Centered Security PolicyIn this scenario, support for Ukraine remains the centerpiece of German security policy, including delivery of previously withheld weapons systems like Taurus missiles.
Potential outcomes: Stronger deterrence against further Russian aggression, enhanced standing with Eastern European allies, and a clearer German position in the conflict.
Devil’s advocate perspective: This approach could escalate the conflict with Russia or risk drawing Germany closer to becoming a party to the war – something Merz explicitly said he wants to avoid13. It could also strain relations with partners pursuing diplomatic solutions. The SPD’s traditionally more cautious approach to military engagement could create tensions within the coalition.
Critical Assessment and ChallengesFiscal SustainabilityThe proposed defense spending increases represent a massive financial commitment that could impact other government priorities. Merz himself acknowledged that rising debt poses a long-term challenge for public budgets2. Maintaining this level of defense spending may prove difficult given Germany’s aging population, infrastructure needs, and other fiscal challenges.
Coalition CohesionWhile Merz has criticized previous governments for lack of coordination, his own coalition with the SPD may face similar challenges in maintaining a coherent security policy. The SPD traditionally has been more hesitant about military spending and interventions than the CDU. This fundamental tension could emerge as specific policy decisions are required.
Implementation CapacityThe ambitious procurement reforms face significant hurdles. Previous attempts to reform Germany’s defense acquisition have achieved limited success. The 71-point plan8 is comprehensive but may be difficult to implement against bureaucratic resistance and entrenched interests.
Balancing Act with RussiaMerz describes Russia as an existential threat while simultaneously stating Germany must not become a party to the war13. This creates a fundamental tension in policy that will require careful calibration of deterrence measures against escalation risks.
Democratic Oversight and Civil LibertiesThe expanded surveillance powers and stricter security measures could challenge Germany’s strong tradition of civil liberties protection. The coalition agreement emphasizes ”zero tolerance” toward ”enemies of democracy”15, but balancing security imperatives with democratic principles will remain a challenge.
ConclusionThe Merz administration represents a significant shift in German security and defense policy, characterized by increased threat perception, higher defense spending, institutional innovation through the National Security Council, and ambitious reform plans for the Bundeswehr.
The success of this approach will depend on several factors: the government’s ability to effectively implement reforms, maintain coalition unity on security issues, balance fiscal constraints with defense needs, and navigate the complex relationship with Russia without escalation.
While the strategic direction is clear, the practical implementation challenges are substantial. Germany’s historical reluctance to take a leading military role in Europe creates both opportunities and constraints for the Merz government as it attempts to position Germany as ”a leading middle power” rather than ”a sleeping middle power”13.
The coming years will reveal whether this ambitious security agenda can transform Germany’s defense capabilities and strategic posture, or whether institutional inertia and political divisions will limit its impact – all while the threat environment continues to evolve.