German government to release $107 bn fund to modernise military in face of Russia threat

In the midst of the ongoing Russia-Ukraine conflict, the German government agreed on Sunday to release 100 billion euros ($107 billion) to modernise the army as Russia continues to pose a threat to North Atlantic Treaty Organization (NATO) members.

The agreement was reached with the support of the conservative opposition, who also agreed to create a special fund for military procurement. With this development, Berlin would achieve NATO's target of spending two percent of Gross Domestic Product (GDP) on defence. 

This came after weeks of negotiations between the ruling coalition party and the opposition party led by the former chancellor, Angela Markel. The deal would bring amendments to the national budget of Germany.

German govt to release $107 bn fund to modernise military in face of Russia threat

The deal to release a special fund of 100 billion euros was pledged by Chancellor Olaf Scholz three days after Moscow invaded Ukraine on February 24. This decision was taken to strengthen the military power of Germany and modernise its outdated equipment. However, reports claim that from the beginning of the Ukraine war, Scholz has shown a lack of courage in his support for Kyiv and he has failed on several occasions to take strong action in terms of military assistance to the conflict-hit nation. According to media reports, this agreement would allow Germany to achieve NATO's goal of spending 2.0% of GDP on defense. The special funds will be financed by additional loans. 

Russia-Ukraine War | G7 nations to provide $19.8 billion in aid to Ukraine

In view of the devastation caused by the Russian forces, the Group of Seven leading economies agreed to provide a total of $19.8 billion in economic aid to Ukraine. German Finance Minister Christian Lindner announced that $9.5 billion of the total amount was mobilised at meetings of the G-7 finance ministers in Koenigswinter, Germany. "We agreed that Ukraine’s financial situation must have no influence on Ukraine’s ability to defend itself successfully," he said. "We need to do our utmost to end this war." Notably, the decision to provide this fund was made with the intention of helping the Ukrainian government keep basic services for its people functioning. 

(With Inputs from AP)