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Merz Sets 2026 Agenda With Bigger Defense Budget, Military Service Plan and Borrowing Shift

He cites a direct Russian threat to Europe as justification for greater European self-reliance.

Overview

  • In his first New Year's address as chancellor, Merz said 2026 could be a “year of new beginnings” for Germany and Europe.
  • He warned that Russia’s war targets the whole continent and said Germany faces daily sabotage, espionage and cyberattacks.
  • He urged Europeans to assert their interests more strongly as the partnership with the United States changes under President Trump.
  • He outlined plans to increase defense spending, seek constitutional changes to permit military borrowing, and introduce voluntary service for some young men.
  • He highlighted pressures from global protectionism and raw‑material dependence, promised relief on taxes, energy costs and red tape, and admitted recent reforms are “not enough.”