Germany is weighing a massive defense procurement plan worth up to 25 billion euros ($29.4 billion) to supply thousands of combat vehicles for NATO's expanding force structure, Bloomberg reported on July 4, citing unnamed sources familiar with the matter.  

The proposed purchases are part of a broader pan-European effort to boost deterrence against Russia, as Western leaders warn of the growing risk of a large-scale war within five years.

Berlin is reportedly considering purchasing up to 2,500 GTK Boxer armored vehicles and up to 1,000 Leopard 2 battle tanks. The purchase would equip up to seven new brigades that Germany has pledged to form under NATO's force generation plans for the next decade.

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The Leopard 2 tanks are produced by KNDS Deutschland and Rheinmetall, while the Boxer is made by ARTEC, a joint venture of the same companies. Leopard 2 tanks have been supplied to Ukraine and tested in combat.

Final pricing and quantities are still under negotiation, and the projected cost could fall below 25 billion euros ($29.4 billion) depending on procurement timelines and contract terms.

German Defense Minister Boris Pistorius and top Bundeswehr officials are reviewing the plans, with legislative approval expected by the end of the year, Bloomberg reported.

Germany has faced pressure from NATO and Washington to meet its alliance commitments, including the newly adopted pledge to spend at least 5% of GDP on defense by 2035.

The initiative, endorsed on June 25 at the NATO summit, reflects concern over Russia's wartime economy, military buildup, and destabilization efforts across Europe.

NATO's increased defense spending will lead to the "collapse" of the alliance, Russian Foreign Minister Sergei Lavrov said on June 30, despite Russian officials recently warning that Moscow's own military expenditure is driving the country towards recession.

Lavrov's comments come after NATO leaders last week approved a new defense spending benchmark, committing members to spend at least 5% of GDP on defense and security-related expenditures by 2035, a goal long pushed by the U.S. and endorsed by NATO Secretary General Mark Rutte.

The week previously, and in a rare public sign that all is not well in Russia, two high-ranking Moscow officials issued separate warnings about the state of the country's economy.

Russian Central Bank Governor Elvira Nabiullina and Economy Minister Maxim Reshetnikov both highlighted that amid the Kremlin's full-scale war against Ukraine, the tools Moscow once relied on to maintain wartime growth are nearly exhausted.

Polish Foreign Minister Radoslaw Sikorski on June 26 said an arms race between Russia and NATO could lead to Russian President Vladimir Putin's downfall.

"Since (Polish Foreign Minister Radoslaw Sikorski) is such a predictor, he probably foresees that a catastrophic increase in the budget of NATO countries, according to my estimates, will also lead to the collapse of this organization," Lavrov reportedly said.

Putin last week announced that Moscow plans to cut its military expenditure beginning next year, in a rebuke of NATO members' plans to increase defense spending to 5% of GDP.

"We are planning to reduce defence spending. For us, next year and the year after, over the next three-year period, we are planning for this," Putin said, though he did not provide concrete details.

"Europe is thinking about how to increase its spending, on the contrary. So, who is preparing for some kind of aggressive actions? Us or them?"

Western officials and analysts point to Russia's surging military expenditures amid its ongoing full-scale invasion of Ukraine. In 2024, Russia's defense budget reportedly rose 42% in real terms, reaching $462 billion, surpassing the combined spending of all European nations, according to the International Institute for Strategic Studies.

NATO allies have cited Russia's military buildup, sabotage campaigns, and continued aggression against Ukraine as reasons to accelerate defense investments. Rutte warned that Russia could rebuild its military capacity to threaten NATO territory within five years, urging members to act with urgency.

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Russian President Vladimir Putin claimed on June 27 that Moscow plans to cut its military expenditure beginning next year, in a rebuke of NATO members' plans to increase defense spending to 5% of GDP.

Putin's claims will likely be met with harsh skepticism from Western officials as Russia's military spending has continued to increase throughout its ongoing invasion of Ukraine.

The Kyiv Independent cannot verify claims made by Putin. The Russian president did not provide any specifics as to how Moscow plans to cut military spending, but added there has yet to be an agreement between ministries.

"We are planning to reduce defence spending. For us, next year and the year after, over the next three-year period, we are planning for this," Putin told reporters during a visit to Belarus. "Europe is thinking about how to increase its spending, on the contrary. So who is preparing for some kind of aggressive actions? Us or them?" Putin continued.

Putin's comments comes as NATO allies are increasingly concerned about Russia's military capabilities, including future threats to alliance members as well as ongoing sabotage efforts.

On June 25, NATO member states agreed to a new defense spending benchmark, committing to allocate 5% of their GDP annually to defense and security-related expenditures by 2035.

The decision comes as NATO allies increasingly believe Russia could rebuild sufficient military capacity to challenge the alliance within five years, with NATO Secretary General Mark Rutte warning that allies must act urgently to prepare for future threats.

"We see Russia's deadly terror from the skies over Ukraine every day. We must be able to defend ourselves from such attacks," Rutte said during a press briefing on June 23. "Our security environment has changed, and not for the better. The threats we face today demand that we do far more," he added.

Various European intelligence agencies as well as officials have increasingly delivered dire warnings about the threat emanating from Russia and Europe's current lack of preparedness. German intelligence chief Bruno Kahl told a parliamentary hearing in October that Russia will have the military capabilities to be able to attack NATO by 2030.

In 2024, Russia’s military spending surpassed the combined defense budgets of all European nations. Russia’s total defense expenditures surged by 42% in real terms amounting to $462 billion, according to the data by the International Institute for Strategic Studies (IISS).

By comparison, total defense spending across Europe, including the U.K. and EU member states, increased by nearly 12% last year to $457 billion, slightly trailing Moscow’s budget.

The Moscow Times reported in December that the Kremlin had spent an unprecedented $43 billion in the third quarter of 2024 alone.

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