In a provocative proposal that challenges the traditional approach to defense funding, Moritz Schularick, President of the Kiel Institute for the World Economy (IfW), has called for Germany’s retirees to play a more active role in financing increased military expenditures.

The remarks come amid rising pressure from the United States for European allies to augment their defense budgets substantially.

In a recent statement to 'Der Spiegel,' Schularick emphasized that substantial fiscal adjustments will be necessary in the medium- to long-term.

He suggested that restructuring within the national budget, specifically targeting the pension system, is unavoidable if significant funds are to be allocated towards defense.

This suggestion comes in response to recent calls by various political figures, including Robert Habeck of the Green Party, to double Germany's defense spending to 3.5% of GDP, a move that could dramatically transform the federal budget.

The push to increase defense spending has been intensified by US political figures, notably former President Donald J.

Trump, who previously demanded NATO members to pledge up to 5% of GDP towards defense.

Such increases could represent a multibillion-euro commitment for Germany, which currently allocates 52 billion euros to its military budget.

Schularick has advocated for potentially raising the retirement age and stabilizing retirees’ living standards by only adjusting pensions for inflation.

He points out that pension increases, projected at 3.5% this year alone, are unsustainable in a stagnating economy.

According to him, it is time for the older generation, which in his view failed to invest adequately in security during past decades, to share the fiscal responsibility for defense enhancements.

His critique extended to the federal government’s current stance, notably the response of Chancellor Olaf Scholz, who disputed the feasibility of the proposed budget increase with the rhetorical inquiry about who would bear such costs.

Schularick countered Scholz's implication that defense could be maintained without additional costs as misleading, arguing that failing to upgrade military capabilities might entail even greater future expenses.

Schularick also underscored the necessity of strengthening Europe's defense autonomy to reduce strategic dependence on the United States.

He emphasized the importance of developing a robust European defense industry to deter potential aggressions, notably from Russia, and to reduce reliance on American military resources.

As Germany deliberates on how to respond to these pressing financial demands, Schularick's propositions highlight the broader debate over intergenerational equity and the fair allocation of economic burdens across society.

His remarks have certainly sparked discussion about how to balance national defense needs with social welfare in a manner that ensures both fiscal sustainability and social justice.