The Peter Zeihan Podcast Series - A (BIG) Change in Germany || PETER ZEIHAN

Episode Date: March 13, 2025

Following the March 4th elections, the Germans are poised to see a significant political and military shift...Join the Patreon here: https://www.patreon.com/PeterZeihanFull Newsletter: https://mailchi.mp/zeihan/a-big-change-in-germany

Hey everybody, Peter Zine here coming to you from a crisp Colorado morning. Today we are talking about something that went down in Germany on the 4th of March. Quick backdrop, we had elections in Germany a little over a week ago. The ruling party, the Social Democrats, the Leader three-party coalition did very, very badly. Came in third. And the main opposition, the Christian Democrats did very, very well, came in first. and the next government will undoubtedly be a coalition of those two parties with the social Democrats in a significantly worse position than they have been in any government to this point

in the post-World War II environment. But it is enough to make a majority in the Bundestag and that's what you need in order to form the government. Anyway, the two of them got together to basically hold early coalition talks. It's only been a week since the election. And the only topic on the agenda was how to amend the Constitution so that the German state can issue more government debt, do more deficit spending specifically to build out its military. This is transformational for any number of reasons. Let's start with the center right.

That's the Christian Democrats. They're socially conservative, economically conservative, a little stodgy, but very, very pragmatic. They don't like issuing debt. They love the United States from a defense point of view. And for them to do this, this is a catastrophic shift in circumstances for them. Donald Trump has basically said that Europe is, if anything, more of a threat to the United States and the Russians, which is ass backwards, but the Germans have no choice but to take Trump at his word. So we're talking here about at least doubling defense spending over the course of the next couple of years, as well as building a 500 billion euro fund to build out the industrial plant necessary to support it all. It is the largest expenditure

of funds in post-war German history on a single project. And for the Christian Democrats to feel that they have to break with the United States is telling. From the social democratics point of view, they don't have nearly as much of a problem with the deficit spending, although they're still German and they're still like to keep debt under control. But they don't like defense spending at all. And that doubling of the defense budget came from their negotiator. should probably think of it as a floor rather than a ceiling. So very rapidly, we're going to see the Germans go from something like 1.2 to 1.5% of GDP going on defense to 4 or 5% of GDP, which

will easily put them above the United States by most measures. Now, two things here. One from a pragmatic point of view, one from a run for the hills point of view. First from the pragmatic point of view, the Germans have underinvested in defense spending for decades under all governments. So throwing 5% of GDP, if that does turn out to be the number at the problem, helps. But they are so far in the hole, they have to rebuild things from scratch. They have to build the industrial plant and build the educational systems to then build the stuff they need and train the people they need. This doesn't happen at six months. And at the same time, there's a very high likelihood that the Germans are going to be at a hot war with the Russians in the not too distant future,

as the U.S. basically abrogates all of its NATO responsibilities, withdraws all assistance from Ukraine. and looking increasingly likely simply leaves NATO altogether. The Germans are going to have to do something that they haven't had to do since 1945. And let's think about defense policy as a leader as opposed to just doing whatever they are told, which brings us to the run for the hills part of the situation. The Germans never are going to have a preponderance of power in any war. They don't have the population to stand against all. of their potential foes and about the only bright spot in all of this is at the moment the rest of

Europe is holding together in whatever NATO or post-NATO structures form as the United States exit stage left. But the last time that the Germans went through a rapid re-arming like this, it was the transformation of Weimar Germany to Nazi Germany, and that is a historical parallel that should be lost on no one. In addition, we now have the U.S. government actively supporting the German neo-Nazi party, which is the second largest party in parliament now because of U.S. actions, at a time when the Germans are redefining

what it means to be a normal country and are massively building out the military in preparation for a major war. We have seen this movie before. There are a lot of details that still need to be worked out. I am hoping that I am worrying about nothing. I am hoping that the last 80 years

of German near pacifism and democracy has very deep roots and can't be disrupted by anything as minor as a major war or a major shift in the geopolitical environment. But I know my history, and when countries are under stress like this, crazy things happen in their domestic politics. And we have seen this movie before in Germany, and it's not just simply about the rise to the Nazi era. I was very comfortable as an American paying for smug, German socialism and pacifism, because historically speaking, I know what the alternative is.

We're going to find out if there's a third way here real soon.