Germany’s Bundestag has voted to pass a constitutional amendment that would authorize increases in defense, infrastructure, and some foreign aid spending, financed through increased borrowing.
"The decision we are taking today... can be nothing less than the first major step towards a new European defense community,” said likely incoming chancellor Friedrich Merz. EU Commission President Ursula von der Leyen commented that the vote “sends a very clear message to Europe that Germany is determined to invest massively in defense."
The vote comes amid pressure from the European Community (and the Trump administration) to increase its overall defense spending and begin to wean off military dependency on Washington. Over the last several weeks, Merz and France’s Emmanuel Macron have issued a clarion call regarding this and concerning Ukraine, where they have also pledged assistance in a new “coalition of the willing.”
Debt-averse Germany has had strict limits, currently only allowing for borrowing equal to .35% of its GDP. This new amendment cleared the two-thirds vote required in the Bundestag and would exempt any defense spending or foreign aid for countries “attacked in violation of international law” from borrowing restrictions.
In addition to loosening borrowing limits for defense spending and foreign aid, €500 billion will be earmarked for infrastructure borrowing, as stipulated by the Greens, whose votes were needed for the two-thirds majority.
"This historic breach of Germany's accustomed dread of incurring public debt is risky in terms of domestic politics," said university lecturer and research scholar Molly O'Neal, who is also a non-resident fellow at the Quincy Institute. "It was rushed through the outgoing parliament in order to frustrate the strong opposition of the AfD on the right and Die Linke on the left. These parties together will have a blocking minority in the new parliament. Viewed objectively and without panic, the relaxing of the debt brake allows Germany to meet the expectations of the U.S. and NATO on defense spending. The Germans are not likely to deploy peacekeepers in post-conflict Ukraine without a U.S. backstop guarantee."
The amendment is set for a vote in Germany’s second chamber, the Bundesrat, on Friday. At first, the outcome seemed uncertain as some regional governments voiced opposition to raising the debt limit. However, the head of Bavaria’s State Chancellery announced today that Bavaria’s six members in the Bundesrat would vote in favor of the amendment, ensuring that the measure will likely have enough votes to overcome the two-thirds majority requirement in that chamber.
Aaron is a reporter for Responsible Statecraft and a contributor to the Mises Institute. He received both his undergraduate and masters degrees in international relations from Liberty University.
Top Photo: A general view of the Parliament as German Bundestag President Baerbel Bas delivers words of commemoration on the occasion of the one-year anniversary of Hamas' October 7 attack, ahead of a session of the lower house of parliament Bundestag, in Berlin, Germany, October 10, 2024. REUTERS/Lisi Niesner
Top image credit: France's Prime Minister Francois Bayrou arrives to hear France's President Emmanuel Macron deliver a speech to army leaders at l'Hotel de Brienne in Paris on July 13, 2025, on the eve of the annual Bastille Day Parade in the French capital. LUDOVIC MARIN/Pool via REUTERS
If you wanted to create a classic recipe for political crisis, you could well choose a mixture of a stagnant economy, a huge and growing public debt, a perceived need radically to increase military spending, an immigration crisis, a deeply unpopular president, a government without a majority in parliament, and growing radical parties on the right and left.
In other words, France today. And France’s crisis is only one part of the growing crisis of Western Europe as a whole, with serious implications for the future of transatlantic relations.
The latest shock in France has come with the announcement by Prime Minister Francois Bayrou that he will call a parliamentary vote of confidence on September 8 over his plan for €43.8 billion ($51.1 billion) in budget cuts to address France’s budget deficit 5.8 percent of GDP — almost double the three percent that is supposed to be the limit for members of the Eurozone, and the highest in Europe after Greece and Italy, leading to a debt to GDP ratio of 113 percent. French GDP growth last year was only 1.2 percent and the economy is projected to grow by a mere 0.6 percent this year.
Bayrou’s plan includes the freezing of welfare payments, reductions in pensioners’ benefits, the abolition of two national holidays, deep cuts to state jobs, and unspecified tax increases for the wealthy. The only area of state spending that will increase is the military — and it is President Macron’s pledge (in line with the promise of Europe’s NATO members to President Trump) radically to increase military spending that has brought France’s fiscal crisis to a head.
This would involve the French military budget rising from around two percent now to 3.5 percent (plus another 1.5 percent in “defense-related” infrastructure spending). In July, Macron promised that the French military budget would reach €64 billion in 2027, three years earlier than previously planned and twice the figure in 2017. He also promised that this would not involve any increase in debt. Bayrou’s thankless task is to try to reconcile these two promises.
Bayrou is prime minister today because his predecessor, Michel Barnier, was ousted nine months ago in a vote of no confidence after he passed the 2025 budget by emergency decree having failed to gain a parliamentary majority for budget cuts. This was the first time a government had been ousted by a no confidence vote since 1962.
Bayrou stands a very good chance of being the second premier in a year to fall this way. On the face of it, his challenge looks insuperable. The loose coalition of centrist parties that supports the government was beaten in the snap elections called by Macron in the summer of 2024, and despite an election deal with the left in the second round to keep National Rally (which won a plurality of votes) down to third place in the number of seats, have only 210 seats in the National Assembly, compared to 142 for the radical rightists National Rally and its allies, and 180 for the left-wing New Popular Front.
Both of these groupings have declared that they will vote to oust the government if it persists with its budget plan. The socialists are strongly opposed to austerity measures, and are allied with trades unions that have announced a nationwide strike on September 10 to block the budget.
As for Marine le Pen, leader of the National Rally, her friendliness towards the government is hardly likely to have been increased by what many see as a politically-motivated legal case launched against her by the government, which (unless overturned on appeal) will lead to her being banned from standing in the next presidential elections.
If Bayrou’s government falls, there are likely to be fresh parliamentary elections; and the premier’s best chance may be that neither of the opposition blocs are afraid that the French public would blame them for a new political crisis, and that if the government is prepared to abandon some of its budget cuts (or covertly abandon the case against Le Pen), one or other could abstain in the no-confidence vote, leading to a government victory.
This is far from certain however. Radical socialist leader Jean-Luc Melenchon has already said that Macron himself should resign if the government loses new elections.
The implications of this crisis extend far beyond the borders of France. Bayrou has warned that if it does not reduce its debt, France will risk the fate of Greece after the 2008 financial crisis, when it suffered years of recession and very harsh and bitterly unpopular austerity measures imposed by the European Union (at the instigation of Germany) as a condition of its bailouts.
It seems inconceivable however that Brussels would be able to impose such austerity measures on France, the second largest economy in the EU. Presiding over deepening economic decline would be the politically easier choice. Moreover Germany, the largest economy, is facing severe budgetary problems of its own. Disputes over the budget brought down the last German coalition government.
The present coalition of Christian Democrats and Social Democrats have agreed (despite deep unhappiness among fiscal conservatives in the CDU) to increase borrowing from €33 billion in 2024 to €81 billion this year and €126 billion in 2029 in order to pay for a doubling of Germany’s military spending and huge (and badly needed) investment in infrastructure. Economists are warning however that this will not be sustainable without cuts in social welfare. As elsewhere in Europe, Germany’s problems in this regard are being worsened by its aging population, which both reduces the tax base and creates a huge lobby against cuts to pensions and healthcare.
The German elections in February saw a surge in support for the far-right Alternative for Germany (AfD) which opinion polls now show as close to overtaking the Christian Democrats as the most popular party. If this rise is sustained up to the next German national elections due in 2029, then one of two things will happen: either the other parties will maintain their “firewall” against allowing AfD into government, which will require a permanent, unstable and deeply divided coalition of perhaps all the other parties against them, or the firewall will collapse, leading to a German government far to the right of anything seen since 1945.
In Britain too, the Labour government of Keir Starmer is deeply unpopular. It has suffered two humiliating revolts by its own MPs against its attempts to cut social welfare so as to increase military spending and is facing the defection of many of its voters to a new left-wing party. Debt to GDP stands at 103 percent and rising.
As in France and Germany, the right-wing populist Reform Party of Nigel Farage is surging in the polls, and has a real chance of forming the next British government.
Some of these radical parties of the right and left (like AfD and the socialists in France) are openly opposed to European military support for Ukraine and increases in military spending. Others fell in line behind NATO under the shock of the Russian invasion, but are strongly opposed to a European reassurance force for Ukraine. All believe (though with very different emphases) that their countries’ problems are overwhelmingly internal ones, that will not be solved by higher military spending.
The lessons for the Trump administration are the following: first, be very skeptical of European promises to significantly increase military spending. Even if present governments are sincere, it may well be simply beyond their power.Second, however, be careful of pushing them too hard. The political and economic stability of Europe is an old and vital US interest — far more vital than the exact borders of Ukraine.
Finally, be even more careful about encouraging and guaranteeing a European “reassurance force” for Ukraine. Lacking both adequate resources and adequate political support, the European planners of this force are in no position to guarantee it themselves.
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Top image credit: France's President Emmanuel Macron, Britain's Prime Minister Keir Starmer and Germany's Chancellor Friedrich Merz arrive at Kyiv railway station on May 10, 2025, ahead of a gathering of European leaders in the Ukrainian capital. LUDOVIC MARIN/Pool via REUTERS
Europe appears set to move from threats to action. According to reports, the E3 — Britain, France, and Germany — will likely trigger the United Nations “snapback” process this week. Created under the 2015 Iran nuclear deal (JCPOA), this mechanism allows any participant to restore pre-2015 U.N. sanctions if Iran is judged to be in violation of its commitments.
The mechanism contains a twist that makes it so potent. Normally, the Security Council operates on the assumption that sanctions need affirmative consensus to pass. But under snapback, the logic is reversed. Once invoked, a 30-day clock begins. Sanctions automatically return unless the Security Council votes to keep them suspended, meaning any permanent member can force their reimposition with a single veto.
For Europe, the looming October 18, 2025 sunset clause — the date when these U.N. sanctions are set to permanently expire — has created a sense of urgency. By acting now, European governments hope to maximize leverage over Tehran and force renewed cooperation. Yet in doing so, Europe risks narrowing, if not closing altogether, the space for diplomacy at the very moment it is most needed.
The move comes in a deeply fraught context. The JCPOA was already fragile before this summer’s war. The unraveling began in 2018, when the Trump administration unilaterally withdrew from the deal despite repeated confirmations from the International Atomic Energy Agency (IAEA) that Iran was in compliance. Washington not only pulled out, but also reimposed sweeping sanctions, devastating Iran’s economy and undoing the bargain at the heart of the deal.
European leaders promised to shield Iran from U.S. pressure and preserve the agreement. But they failed to deliver the economic relief that was central to the JCPOA’s logic. By 2019, with no benefits forthcoming, Tehran began to exceed limits on enrichment and stockpiles. Iranian officials pointed to provisions in the accord that allowed such steps if other parties were not meeting their obligations.
The fragile balance collapsed further this summer. In June, joint U.S.–Israeli strikes targeted Iran’s nuclear facilities. In response, Tehran expelled IAEA inspectors and suspended cooperation with the agency, arguing that it had failed to condemn what Iran described as an unlawful act of aggression. Trust — already frayed — was all but destroyed.
Against this backdrop, Europe’s snapback gamble looks less like a path to reviving cooperation than an escalation designed to squeeze Iran into short-term concessions. Instead of restoring confidence, it risks locking both sides into a cycle of pressure and retaliation with no offramp.
Even the enforceability of snapback is questionable. Russia and China are almost certain to reject a unilateral reimposition of sanctions. That would fracture implementation, leaving sanctions applied inconsistently across the international system. The effect would be to weaken not only the JCPOA but also the credibility of the U.N. Security Council itself.
Europe insists there is an offramp: an extension of the October 2025 sunset clause if Iran resumes full cooperation with inspectors and re-engages in talks with Washington. But because this offer is tied to the snapback threat, diplomacy is compressed into a 30-day ultimatum. The E3 are effectively demanding immediate concessions: unrestricted IAEA access to sites damaged in June’s strikes, a full accounting of uranium stockpiles enriched up to nearly 60 percent, and a resumption of substantive U.S.–Iran negotiations — all under the gun of looming U.N. sanctions.
The risks are significant. If the E3 fail to reach an agreement and act on their threat, enforcement would be highly uncertain, with Russia and China almost certain to reject a unilateral reimposition. Tehran, in turn, could respond by doubling down on nuclear ambiguity — or even moving toward withdrawal from the Nuclear Non-Proliferation Treaty, as its officials have warned.
This was the path North Korea took after the collapse of its deal with the United States: first cultivating ambiguity about its program, then expelling inspectors and exiting the NPT in 2003, and ultimately transforming uncertainty into a declared nuclear arsenal through repeated weapons tests. Europe now risks pushing Iran across a similar threshold — one where diplomacy becomes much more difficult, locking the confrontation into place for decades.
There are more constructive ways to preserve verification and create space for diplomacy. Iran was just bombed while already at the negotiating table, and by some accounts a deal was nearly within reach. Trust is a two-way street, and the responsibility now falls on Europe to act as a credible interlocutor rather than an escalatory force in the triangle of tensions between the U.S., Israel, and Iran.
Instead of wielding threats, Europe and its partners could pursue a short, clearly defined technical extension of the Resolution 2231 timelines. That could be coupled with an interim package of reciprocal steps and targeted sanctions relief — enough to restore inspector access, sustain monitoring, and ensure that Iran attains tangible economic benefits. This is the essence of diplomacy: measured give-and-take, not unilateral demands in exchange for nothing.
But if Europe chooses coercion over cooperation, it may find that the window has slammed shut — leaving only the prospect of a more dangerous, more isolated, and more nuclear-capable Iran.
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Top photo credit: President of Russia Vladimir Putin, during the World Cup Champion Trophy Award Ceremony in 2018 (shutterstock/A.RICARDO)
After a furious week of diplomacy in Alaska and Washington D.C., U.S. President Donald Trump signaled on Friday that he would be pausing his intensive push to end war in Ukraine. His frustration was obvious. “I’m not happy about anything about that war. Nothing. Not happy at all,” he told reporters in the Oval Office.
To be sure, Trump’s high-profile engagements fell short of his own promises. But almost two weeks after Trump met Russian President Vladimir Putin in Alaska and European leaders in Washington, it is clear that there were real winners and losers from Trump’s back-to-back summits, and while neither meeting resolved the conflict, they offered important insights into where things may be headed in the months ahead.
Putin clearly fared best of all. He got a face-to-face meeting with his American counterpart on U.S. soil, avoided the economic penalties that Trump had threatened, and continued his war without making notable concessions. Putin had long wanted a bilateral with Trump, not only for the legitimacy such a meeting would give Russia’s great power aspirations, but also because keeping Trump engaged in negotiations is essential to Putin’s war aims. Only with U.S. involvement can Putin hope to address the “root causes” of the war in Ukraine, including NATO’s eastward expansion.
The substance of the meeting offered Putin additional wins. He convinced Trump to give up on the European demand for an unconditional ceasefire, and to accept in principle Russia’s territorial demands, though Trump acknowledged only Ukraine could agree to Putin’s terms.
Putin did not achieve all his goals, however. He arrived ready to bargain, but did not walk away with any of the U.S.-Russia deals that he seemed to hope for, on natural resources, arctic cooperation, or arms control, though these issues may have been discussed. Still, back in Moscow, Putin must have felt pleased, especially as he watched Europe’s sprint to Washington days later.
Trump didn’t leave empty handed either, though he did not get what he really wanted — an end to the war. For starters, Trump clearly welcomed the opportunity to play peacemaker, and relished the pageantry of his made-for-television Alaska summit, complete with a red carpet and stealth bomber flyover. Last Monday’s meeting at the White House gave Trump’s ego an additional boost, as Europe’s politicians fell over themselves praising his leadership.
But Trump’s biggest gains from Alaska had little to do with his efforts to end the war in Ukraine. First and most important was Putin’s validation of Trump’s longtime grievances against the Biden administration, including his claim that the war in Ukraine never would have started under a Trump presidency. Second, having backed himself into a corner with his 10-day ultimatum, the summit gave Trump an escape route and a way to defer economic punishments that he knew would not affect Putin’s calculus and did not want to impose in the first place.
That his subsequent meeting with Europe yielded fewer tangible outcomes could also be framed as a win. Europeans arrived determined to extract clear statements from the United States on security guarantees for Ukraine. Trump denied this aim by offering only the most vague and limited of U.S. commitments and muddying the waters further in subsequent interviews.
n doing so, he threw the ball back in Europe’s court, making clear that they would be providing the bulk of any security guarantee to Ukraine, no matter how they wanted to spin it.
Still, Trump’s position is not enviable. If his summit diplomacy revealed one thing it is how little leverage he actually has to end the war. He has few sticks he can wield to force Putin to the bargaining table, a fact he himself admitted weeks ago, and seems unwilling to coerce Zelensky into concessions, perhaps fearing the domestic political costs of being seen as the leader who “lost” Ukraine.
Even with these setbacks, however, Trump came out far better than Europe. After their meeting in Washington, European leaders were upbeat. They had prevented Trump from strong-arming Zelensky and saw Trump’s apparent openness to U.S. involvement in security guarantees as a victory, even if that commitment was flimsy at best.
Their reality, however, was less rosy than their post-meeting soundbites. They were unable to change Trump’s mind on the wisdom of land swaps and unable to win him back to their view that an immediate ceasefire was necessary. They failed to get “iron-clad” U.S. support for Ukraine or even specific U.S. contributions to a European reassurance force, though some proposals have now been offered.
Worse, in a repeat of the March 2025 “coalition of the willing” drama, it is still unclear whether Europe can find the manpower or willpower to resource a long-term force based inside Ukraine that they themselves have proposed. In any case, the Europeans are fooling themselves if they think Trump, who has been unwilling to impose economic penalties on Moscow, would really put U.S. forces at risk in Ukraine if it came down to it.
Most damaging for Europe were the optics. Racing across the Atlantic to meet with Trump, European leaders looked desperate and panicked. They insisted that they deserved a seat at the table, after being left out of Alaska, but their performance in Washington suggested instead just how little they have to offer. After all, they have few weapons to provide Ukraine, limited economic leverage on Moscow, and no plan for ending the war.
Perhaps unsurprisingly, Ukraine came out worst of all. True, it did not have to make major concessions and was not forced into surrender. But the writing seemed to be on the wall. Over the course of four days, Trump made clear that Ukraine would not be in NATO and would have to give up territory. He pressed Zelensky on when he would hold elections and at points returned to blaming Ukraine for starting the war. He offered nothing concrete in the way of military aid or security commitments that would help end the war or keep Ukraine secure over the longer term.
Kyiv’s real problem is that time is not on its side. Its battlefield position is eroding rapidly, largely due to lack of sufficient personnel, while Russia is gaining ground in the Donbas and elsewhere. The longer the war endures, the worse Kyiv’s position becomes. Eventually, Ukraine’s front lines will collapse, and at that point the terms of any settlement will look considerably worse than what’s on offer today.
The high-stakes summits and the scramble afterwards to come up with security guarantees for Ukraine ultimately made things worse for Kyiv. Russia has already indicated that it will reject any settlement that includes provisions for NATO member states to position forces inside Ukraine, especially if U.S. military assets are involved—but this is just the solution that Europeans are offering. Putin is likely to keep fighting if this is the deal on the table, rather than settle, extending the war. For Ukraine, this is the worst possible outcome.
Zelensky left Washington last week with no good options, the two summits having underscored just how dire his position is. The only security guarantees the West might offer are strong enough to keep Putin in the war today but too weak to protect Ukraine or to sell to his domestic population as compensation for concessions elsewhere.
Meanwhile, his most vocal backers, the Europeans, have revealed themselves to be largely incapable of influencing the trajectory of the war. They will continue to advocate for Kyiv, but are likely to be bystanders in meaningful developments to end the conflict.
For his part, Trump really does seem to want peace, but he cares at least as much about how the war and its end affects his political legacy as he does about the details of the conflict or the settlement reached. This is not a good starting place for what will eventually be a challenging negotiation with Russia to end the war. An agreement that leaves the door open to recurring war could easily result if Trump rushes to reach a deal for his own sake.
Giving Russia and Ukraine his famous “two weeks” notice last Friday, Trump found himself in the same position he was a month ago. He issues deadlines, the war continues, and there’s not much he can do about it.
Russia can’t fight forever, but for now, the timeline for peace remains firmly in Putin’s hands.
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