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The era of polite transatlantic nodding is over. Chancellor Merz is signaling that if the U.S. wants to go it alone, Germany will stop waiting by the phone.

Germany’s frustration with the United States is no longer confined to closed‑door briefings or diplomatic understatement. It is now spilling into public view — and striking at the core assumptions of the transatlantic alliance.

The trigger was Washington’s newly released U.S. National Security Strategy (NSS), a document that reads less like a partnership agreement and more like an indictment. It criticizes Europe for democratic backsliding, uncontrolled migration and over‑reliance on American military protection, while demanding that Europeans carry a far greater share of the defense burden. In Berlin, the document landed not as strategy, but as provocation.

German Chancellor Friedrich Merz made that clear in remarks that went well beyond routine alliance fatigue. Parts of the NSS, he said, were simply “unacceptable to us from a European perspective.” He rejected the notion that the United States should act as Europe’s democratic overseer, adding: “I see no need for the Americans to now want to save democracy in Europe. If it would need to be saved, we would manage on our own.”

Behind the rhetoric is a deeper reckoning: Germany is starting to question how much strategic dependence on the United States it can afford — economically, financially and militarily.

The Burden-Shift: From Ally to Liability

For decades, Germany accepted asymmetric relations with Washington as the price of security. U.S. power underwrote Europe’s defense, global trade routes and financial architecture. In return, Germany kept military spending low and focused on export‑led growth.

That bargain now looks increasingly one‑sided.

The NSS explicitly frames Europe as a liability: insufficiently armed, politically fragile, and unwilling to pay for its own defense. German officials privately describe the shift as moving from “burden‑sharing” to “burden‑shifting” — transferring responsibility without ceding control.

Merz articulated this concern bluntly, warning against an alliance that drifts toward unilateralism: “‘America first’ is fine, but ‘America alone’ cannot be in your interest. You need partners in the world, and one of those partners can be Europe. And if you cannot make use of Europe, then at least make Germany your partner.”

King Dollar’s Stranglehold

Germany’s vulnerability does not begin with tanks or troops. It starts with currency.

The U.S. dollar remains the backbone of the global financial system. According to International Monetary Fund (IMF) COFER data, the dollar accounted for roughly 56–58 percent of global foreign‑exchange reserves in late 2024, compared with about 20 percent for the euro. While the dollar’s share has gradually declined, its political utility has not.

Access to dollar clearing — and the threat of losing it — gives Washington leverage that no ally can easily resist. German economists increasingly describe this system as a form of structural pressure: sanctions applied extraterritorially, enforced through U.S. jurisdictional reach rather than multilateral agreement.

For Berlin, this is not theory. It is lived experience.

The Sanctions Straightjacket

Germany’s export‑driven economy is deeply exposed to U.S. markets. In 2024, German exports to the United States totaled roughly $170 billion, making the U.S. Germany’s single most important export destination — accounting for nearly 10 percent of total German exports.

That dependency sharply limits Berlin’s room for maneuver when U.S. policy collides with German economic interests.

The most cited example remains Iran. After Washington’s unilateral withdrawal from the nuclear deal in 2018, German firms — including Volkswagen, Siemens, and BASF — rapidly exited the Iranian market to avoid U.S. secondary sanctions. German‑Iranian trade collapsed from €3.4 billion in 2017 to roughly €1.5 billion by 2024.

European counter‑measures failed. The EU’s “blocking statute” offered legal cover, but not financial protection. Companies chose access to U.S. markets over European political symbolism — a decision Berlin officials quietly acknowledge was unavoidable.

The Billion-Dollar Handcuffs

The financial sector tells a similar story. Deutsche Bank alone has paid more than $20 billion in fines and settlements since 2008, largely to U.S. authorities.

These include a massive $7.2 billion settlement in 2017 over mortgage-backed securities, as well as a $186 million Federal Reserve fine in July 2023 related to sanctions violations and anti–money-laundering failures. German officials rarely dispute the technical merits of individual cases. What unsettles them is the asymmetry: U.S. regulators policing European institutions extraterritorially, often with limited reciprocal oversight from Frankfurt or Brussels.

The €100 Billion Paradox

If Germany hoped that throwing money at the military would ease tensions with Washington, the data suggest otherwise.

According to the Stockholm International Peace Research Institute (SIPRI), Germany spent approximately $88.5 billion on defense in 2024, solidifying its position as one of the world’s top military spenders. Defense outlays reached 1.9 percent of GDP, effectively meeting NATO’s 2‑percent benchmark for the first time — largely financed through the €100 billion special fund (Sondervermögen) adopted after Russia’s invasion of Ukraine.

Germany also remains the second‑largest financial military aid donor to Ukraine, trailing only the United States.

Yet even this dramatic increase has not insulated Berlin from U.S. criticism. SIPRI data and German budget analyses warn that without further structural budget hikes, Germany’s current spending levels are not fiscally sustainable beyond 2026 once the special fund is exhausted. The political message from Washington remains unchanged: spend more, do more, rely less — but follow American strategic priorities.

Plan B: A Post-American Defense?

The contradiction sits at the heart of Germany’s dilemma. Washington urges Europe to become stronger, yet resists any European military or industrial autonomy that might dilute U.S. influence. Since Brexit, Germany has emerged as the EU’s central power. From Nord Stream 2 to China policy to defense procurement, U.S. pressure has repeatedly constrained Berlin’s choices. Many German officials now see this not as temporary friction, but as structural tension — intensified by America’s growing rivalry with China and declining tolerance for independent allies.

The result is not estrangement, but recalibration.

Germany is not preparing to leave the alliance. But it is preparing for a world in which American guarantees are conditional, transactional and increasingly political. In that world, dependency is no longer just a risk — it is a liability.

The post Berlin’s Wake-Up Call: When ‘America First’ Means Europe Last appeared first on CounterPunch.org.

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