Germany diverted over a third of defence-designated debt in 2025, Ifo finds
An Ifo analysis finds that 11 billion euros of Germany's 2025 defence-exemption borrowing went to other budget purposes, a 38.5% misappropriation rate.
More than a third of the additional debt Germany raised in 2025 under its exemption for defence and security-related spending was directed to other purposes, according to an analysis by the Ifo institute.
"Instead, the spending leeway that became available in the core budget was used for other purposes," said Ifo researcher Emilie Hoeslinger.
The finance ministry did not immediately respond to a request for comment.
Spending covered by the sectoral exemption came to 54.6 billion euros in 2024 and climbed to 72.2 billion euros in 2025. While that spending rose by 17.6 billion euros, additional borrowing under the exemption reached 28.6 billion euros in 2025. According to Ifo, the gap left 11 billion euros in extra debt that did not translate into additional defence and security spending, implying a misappropriation rate of 38.5%.
Beyond defence, the sectoral exemption also covers aid to Ukraine, IT security, civil defence and civil protection of the population, and the intelligence services.
The government has been repeatedly accused of using some of the financial firepower created by its taboo-busting fiscal reforms to prop up day-to-day spending.