German minister seeks debt brake exemption to maintain Ukraine aid

Investing.com -- Germany’s development minister is seeking an exemption from the country’s constitutional borrowing limits to maintain financial support for Ukraine amid mounting budget pressures.

Development Minister Reem Alabali Radovan warned that continued cuts to Germany’s development assistance budget could undermine its ability to sustain civilian support for Ukraine as Russian attacks intensify.

Speaking on the sidelines of the International Monetary Fund and World Bank meetings in Bangkok, Alabali Radovan said her ministry could no longer maintain existing funding levels without changes to borrowing restrictions.

Germany’s development ministry has allocated approximately €330 million ($371 million) to Ukraine this year, down from €670 million in 2022 and €750 million in 2023.

The minister argued that continued assistance was essential to Ukraine’s reconstruction and broader European stability, particularly as Russian attacks cause further destruction.

Her proposal would exempt Ukraine-related development spending from Germany’s debt brake, which restricts government borrowing.

Alabali Radovan, a member of the Social Democrats, serves in Chancellor Friedrich Merz’s coalition government alongside his conservative Christian Democratic Union.

The proposal has received backing from Foreign Minister Johann Wadephul, a CDU member, but faces resistance from other conservatives opposed to additional exemptions beyond those already approved for defence spending.

The minister said her department was prioritising Ukraine despite competing demands from other international crises.

However, existing long-term spending commitments mean further reductions would disproportionately affect flexible crisis-response programmes.

The debate highlights growing tensions within Germany’s governing coalition over how to balance fiscal discipline with continued international commitments.

Alabali Radovan also supported Merz’s call for other countries to increase their financial contributions to Ukraine.

She argued that Germany remained among Ukraine’s strongest supporters but that other governments should assume a greater share of the burden.

The proposed exemption could become a significant issue in Germany’s budget discussions as Berlin weighs domestic spending constraints against the financial demands of supporting Ukraine.