Germany’s New Hybrid Military Service Plan Signals a Shift in Europe’s Defense Economics

Germany’s decades-long experiment with a fully volunteer military is entering a new chapter. On Thursday, Chancellor Friedrich Merz’s conservative-led government and the centre-left Social Democrats reached a long-awaited compromise on the future of military service — a core pillar of the country’s broader strategy to rebuild a military force that has steadily weakened since the Cold War.

The agreement outlines an ambitious hybrid model: voluntary service will remain the backbone of the Bundeswehr’s staffing strategy, but Berlin now reserves the right to impose a mandatory call-up if manpower falls short. The structure marks the most significant overhaul of German military recruitment policy in more than a decade and reflects new geopolitical and fiscal realities shaping Europe’s largest economy.

A Strategic Reset Driven by Security and Economics

Germany’s armed forces, once nearly half a million strong during the Cold War, shrank dramatically in the 1990s and 2000s as successive governments prioritized social spending and post-unification reconstruction. By comparison, today’s Bundeswehr consists of roughly 182,000 uniformed troops — a number policymakers increasingly view as incompatible with Europe’s deteriorating security environment.

Russia’s invasion of Ukraine, combined with escalating pressure from the United States to shoulder more defense responsibility, has forced Berlin to confront the economic underpinnings of its military posture. Rebuilding an army that Merz has pledged will become “Europe’s strongest conventional force” will require sustained investment, a steady stream of personnel, and major expansion of Germany’s defense industrial base.

The hybrid model aims to solve the most immediate problem: Germany simply does not have enough soldiers. Voluntary service alone has not produced the numbers needed to reach the government’s target of 255,000–270,000 active troops, supported by an additional 200,000 reservists.

Voluntary First, Mandatory If Needed

Jens Spahn, parliamentary leader for Merz’s Christian Democratic Union (CDU), framed the compromise as a balanced approach that recognizes both demographic constraints and political realities.

“We will make voluntary service more attractive,” he said, emphasizing efforts to “get as many young people excited about service for their country.” But Spahn also acknowledged the limits of such optimism: “If in the end, voluntary service isn’t enough, there will have to be a mandatory element.”

Under the proposal — expected to become law early next year — all 18-year-olds will receive a questionnaire assessing their willingness to serve. For men, completing the questionnaire will be mandatory; for women, optional. Recruits who enlist will receive monthly compensation of €2,600.

A structured nationwide system of medical screening will begin with those born in 2008 and expand in phases. If volunteer numbers fall short, Parliament will retain the authority to activate targeted conscription through a separate vote. That provision, still politically sensitive, is being left deliberately flexible.

Defense Spending and Industrial Spillovers

This service reform is the latest in a series of major defense measures Germany has adopted since 2022, including a historic multibillion-euro special fund created to modernize equipment, upgrade logistics, and replace decades-old systems. Much of that spending is now flowing into domestic and European defense manufacturers, reshaping procurement pipelines and expanding production capacity.

The hybrid recruitment model dovetails with this industrial strategy: it aims to guarantee that new investments in weapons, infrastructure, and training can be matched with sufficient personnel to operate them. Without this alignment, defense planners warn, Germany risks pouring money into a force that cannot function at scale.

For JournalBiz readers, the economic implications are clear. A larger Bundeswehr will require long-term increases in labor, materials, technology procurement, and maintenance budgets. This will have downstream effects on Germany’s manufacturing sector, European defense supply chains, and the fiscal priorities of the Merz government.

Preparing for a More Uncertain Europe

Germany’s shift is also rooted in political messaging: Defense Minister Boris Pistorius warned last year that the country “must be ready for war by 2029.” That stark framing captured a growing urgency shared across the continent. NATO allies, still adjusting to Washington’s shifting foreign policy posture under President Donald Trump, are accelerating military spending and revising recruitment policies to avoid strategic vulnerability.

For Germany, the new compromise represents a pragmatic recalibration — one that tries to balance public support with geopolitical necessity and economic responsibility. Whether voluntary service will prove sufficient, or whether conscription will be activated, will depend on how Germany’s evolving security environment intersects with its labor market, fiscal pressures, and industrial capabilities over the next several years.

For now, Berlin has crafted a framework that is flexible, politically negotiable, and economically grounded — a necessary starting point as Europe’s defense landscape continues to reshape itself at high speed.