Germany, Europe's economic giant and shorthand for post-war pacifism, is at a crossroads. It has defined itself throughout most of the 20th and 21st centuries by what it shuns as much as by what it asserts. It does not extend power beyond its borders in military terms. It does not ignore fiscal restraint. It does not, generally, diverge from the rules of multilateral consensus. But the Germany of 2025 is not the one of 1995, or even 2015. After Russia's 2022 invasion of Ukraine and the ensuing energy and security crisis that swept over the continent, the country has taken a path few could have imagined a decade earlier. The term "Zeitenwende," or turning point, newly minted by Chancellor Olaf Scholz in a theatrical Bundestag Parliament address in February 2022, was at first greeted with a mixture of amazement and incredulity. Today it is orthodoxy. The marker of the change is Germany's commitment to rearmament—a word which for decades sat uncomfortably within the German lexicon, conjuring up painful memories of ill times.

That Germany, a land of pacifist protest movements and of military restraint tempered in constitutional caution, should loudly advertise the largest increase in defense spending since the collapse of the Cold War is not just a shift of course, but of national attitude. The 100 billion euro special fund announced in 2022 was merely the opening move. In 2024, the Bundestag approved an additional 50 billion euros annually in spending to ensure Germany's military, the Bundeswehr, reaches NATO's target of 2% of GDP for defense—a level long avoided by Berlin in spite of repeated exhortations by Washington and the alliance. These amounts have borne fruit in concrete gains. In the early part of 2025, Germany received its first delivery of United States F-35 stealth fighters, a final end to its long-standing reluctance to host nuclear-capable planes.

The formerly underfunded and unprepared Luftwaffe is undergoing a renaissance. German defense contracts with Rheinmetall, Airbus, and KMW have proliferated, and the Bundeswehr has restarted large-scale joint exercises not only with NATO partners but also with countries like Japan and Australia, showing an expanded strategic vision of alliances. And yet, while Germany rushes to rearm its military strength, it is doing so with one hand still gripping the economic steering wheel. Rearmament is not occurring in a vacuum; meanwhile, Germany has introduced one of the largest fiscal stimulus packages in its post-war history—a 300 billion euro economic resilience plan.

Nested within the plan are goals ranging from industrial reshoring and semiconductor independence to renewable energy expansion and infrastructure upgrade. For a country long devoted to the principle of the "Schwarze Null," or Black Zero—the balanced budget—this shift at the eleventh hour to aggressive fiscal policy is tantamount to heresy. Why the sudden change? The reasons are manifold, but they have one thing in common: vulnerability. The war in Ukraine uncovered Germany's over-reliance on Russian gas, diminishing faith in its energy and foreign policy orthodoxy. The following energy crisis accelerated inflation, muted industrial production, and led to a reordering of national priorities.

At the same time, tensions with China—Germany's second largest trading partner outside the EU—have underscored fears about economic dependence and geopolitical entanglement. And then there is, naturally, the shadow of American insulation: the increasingly isolationist tone of American politics, particularly in the lead-up to the 2024 presidential election, has called into question the long-term stability of NATO's security guarantee. In the midst of it all, Germany has come to a simple conclusion: nobody will defend its interests but it itself. But questions persist. Is Germany's remilitarization truly revolutionary, or merely reactive? Critics say that the glossy announcements notwithstanding, procurement bottlenecks and administrative slowness continue to dominate. The Bundeswehr remains plagued by outdated equipment, logistics shortages, and training issues. The German Ministry of Defense has long been notorious for not being able to deliver efficient logistics and supply, with most branches of the military facing overspending or undersupply.

Meanwhile, the government's decision to prioritize domestic defense manufacturing at the expense of effective foreign purchases has delayed crucial upgrades, such as missile defense systems and transport helicopters. Neither is there a consensus on what this buildup is meant to accomplish. Is it to deter Russia, stabilize Eastern Europe, make a more equitable contribution to NATO, or create an independent strategic niche? Berlin's words have been deliberately opaque, using such jargon as "European sovereignty" and "strategic autonomy" liberally but rarely defined. Chancellor Scholz has referred to solidarity within NATO, but in the meantime, Germany has become a leader in deepening the EU's common defense framework, with increased expenditure on the European Defence Fund and new talk of a joint rapid intervention force. Critics fear that Berlin's effort to do both—enhance NATO while hedging its restraint  via the EU—will end up pleasing neither. The domestic political scene is just as split .

The Social Democrats, Scholz's own party, continue to be concerned about unbridled militarization, while the Greens have grappled with reconciling their environmental and pacifist origins with a new role as guardians of defense and energy transition. The center-right Christian Democratic Union (CDU), which is now in opposition, supports rearmament but argues the government is not fulfilling timelines and scope. The far-right Alternative for Germany (AfD), on the other hand, has found rich political soil in targeting the economic cost of the strategy, with threats of growing public fatigue and inflationary pressure. While the sovereign debt of Germany remains firmly below EU ceilings, the cumulative cost of war spending and stimulus for industry has raised alarm among financial markets. The ECB has made cautious comments on the member states' fiscal trajectory, and bond markets have begun to price high risk premia on German bonds—an unimaginable phenomenon for the most creditworthy borrower within the eurozone.

The specter of stagflation haunts the whole operation: the German economy declined in the fourth quarter of 2024, and unless energy prices stay high and productivity growth miraculously rebounds, Berlin could be caught between strategic necessity and fiscal solvency. But to consider these as inherent economic indicators of failure would be a mistake. Germany's remilitarization and economic rebirth are not isolated events—they are symptoms of a greater transformation. The Germany that had built its postwar identity on export-led prosperity and strategic restraint is giving way to something more assertive, more autonomous, and perhaps more insecure. There is a growing understanding that the world in which Germany had worked for most of the past seven decades no longer exists.

This security cannot be outsourced. Affordable energy is no longer a given. Globalization, once a universal given, is now a strategic scarcity. What Germany ultimately is in this new world depends on what happens next. If rearmament persists at this rate and economic stimulus manages to reindustrialize the nation, Berlin may become the uncontested leader of the continent—militarily, economically, and diplomatically.

A type of "strategic Germany," confident in its power and willing to shape the contours of the post-American world in Europe. But if cracks widen politically, if economic tensions build, or if popular resistance becomes full-blown backlash, this moment of ambition could prove short-lived. For now, the project is Germany's. It is investing, refocusing, and throwing its weight around in a way it hasn't in years. Whether this is the beginning of a genuine transformation or merely a self-conscious flip will depend not just on what Berlin builds, but on what it does with it. The world, at last, is looking to Germany for resolve rather than restraint.