It wasn’t long ago that German Chancellor Olaf Scholz was trying to convince his fellow European leaders to do more to help Ukraine. Wherever he went in the spring, the message was the same: Vladimir Putin will withdraw Russian troops only “when he realizes that he cannot win the war on the battlefield,” Scholz told European Social Democrats at a meeting in April.

Now his coalition has decided to halve German military aid to Ukraine, Reuters reported, based on a draft budget for 2025. Next year, Europe’s largest economy plans to spend just €4 billion on supporting Kiev against Russian aggression.

German Finance Minister Christian Lindner suggested at a press conference that this drastic cut will be compensated by other sources, arguing that “Ukraine’s financing is secured for the foreseeable future thanks to European instruments and G7 credits.”

The hope is that interest from frozen Russian assets will help offset some of the shortfall. There is currently around €260 million in the EU’s cold storage, which reportedly generated €4.4 billion in interest last year – a windfall that Brussels has pledged to use to help Ukraine. The G7 has also pledged to raise a $50 billion loan for Kiev, backed by Russian assets.

In addition, the EU Commission this week indicated that it is satisfied that Ukraine has met the conditions for the first of the regular quarterly payments of its Ukraine Facility plan, which aims to provide up to €50 billion in grants and loans over the period 2024-2027 to help the country build a resilient administration. The first tranche of almost €4.2 billion should be released shortly.

Whether this reshuffling of funding will provide enough support for Ukraine to avoid defeat on the battlefield remains to be seen. But what it has already accomplished is a further erosion of deterrence. By reducing resistance to military aggression in Europe to spreadsheet politics, Scholz’s coalition is sending a clear message to Moscow and the world: namely, that his government is struggling to fund military intervention, both financially and politically.

It is significant that the announcement of the cuts and their justification were presented by the Minister of Finance. There was no real support from the Chancellor or the Ministry of Defense to try to present it convincingly as a restructuring of financing to ensure predictability of cash flow in Kiev.

The case underscores once again that Germany is struggling to turn its words into action. Financially, this is difficult because the country has a self-imposed “debt forgiveness” that limits the federal deficit to 0.35 percent of GDP. This means that borrowing is difficult and Lindner has to balance the books. This task has not been helped by the fact that the government has blown a €60 billion hole in the federal finances by diverting unused pandemic emergency funds to climate projects, which the country’s Supreme Court ruled unconstitutional late last year.

With little financial room, the only way out is to consider the war in Ukraine as an emergency. This is a politically difficult issue, since almost two-thirds of Germans, according to a recent survey, believe that their own country is going backwards and they want money to be spent on their own country first.

In general, the war in Ukraine is a much more contentious issue in Germany than in other parts of the West. When the US and the UK announced in the spring that they would send new long-range cruise missiles to Ukraine, Scholz refused to follow suit, knowing that he had the majority of the German public behind him. A poll at the time showed that less than a third wanted him to give in on this point. Scholz felt emboldened to present himself as a peace chancellor to boost his party’s chances in the European elections in June.

To ensure its own security and that of Europe, Germany must make it clear that it is willing and able to intervene when necessary.

But the survey also showed that three-quarters of Germans want defense spending to increase, even if it means deficits elsewhere or a suspension of debt relief. What neither they nor the rest of the democratic world needs is for the world’s third-largest economy to signal to aggressors that they can act with impunity. Deterrence is not just about money for Ukraine, but also about Germany’s own readiness for war.

Thanks to a special €100 billion fund introduced after Russia’s invasion of Ukraine in 2022, Germany will meet its NATO target of spending 2 percent of GDP on defense next year. But the regular defense budget has been increased by only €1.3 billion, instead of the €6.7 billion that Defense Minister Boris Pistorius said he needed to replenish the country’s depleted stockpile.

The special fund will be exhausted in 2027, so unless regular spending is increased, the German armed forces will fall off a cliff financially. They know this and find it difficult to plan ahead. Reportedly, key projects that were due to start next year have been put on hold, including the purchase of four new submarines, new Taurus cruise missiles and the development of new long-range missile systems.

To ensure its own security and that of Europe, Germany must show that it is willing and able to intervene if necessary. This is especially true now that a Donald Trump victory in the US seems increasingly likely and his running mate JD Vance has already singled out America’s “German friends” for an attack on allies who he says receive US subsidies “for doing nothing”. Should Trump and Vance come to power, the deterrent value of having American power behind European security will immediately diminish. Cutting €3.5 billion in aid to Ukraine seems a pitiful gain for the loss of much-needed German credibility.

Germany is not the only country struggling to find money in its depleted public pockets. But with its huge economy and central geopolitical position in Europe, it has a special responsibility for the continent’s security. Peace can only be secured if Germany gets serious about defending it. Ultimately, European security is about more than just balancing the books.

This article was originally published on The spectatorBritish website.