Chancellor Olaf Scholz pledged that Germany will forge ahead with a significant expansion of its military capabilities even after a special fund for defense spending is exhausted, as the nation builds out its role as the “central hub” of NATO in Europe.

Scholz announced the €100 billion ($107 billion) fund three days after Russia invaded Ukraine in February 2022. Two thirds of the cash will likely be allocated by the end of this year, enabling Germany to meet NATO’s goal of spending at least 2% of GDP on defense for the first time in more than three decades next year and beyond, Scholz said Friday in a speech in Berlin.

“There is absolutely no question that the turning point that Russia’s war of aggression represents requires a long-term, permanent change of course,” Scholz said at an event organized by the Bundeswehr.

“And this pledge stands, it is due to a new reality of security policy,” he said, adding that Germany’s ruling coalition is working on an “adjustment path” for the defense budget that will lock in the necessary spending in the years after the fund runs out.

Cash from the fund has been channeled to procurement initiatives including the purchase of Lockheed Martin Corp.’s F-35 fighter jets, Israel’s Arrow air-defense system and Boeing Co.’s heavy-lift Chinook helicopters. Officials have said that the entire €100 billion will have been allocated by the end of next year.

Scholz said the new materiel will “significantly improve the capabilities of the Bundeswehr in the foreseeable future.”

NATO Secretary General Jens Stoltenberg, who met with Scholz in Berlin on Thursday, held talks with German Defense Minister Boris Pistorius on Friday before briefing reporters.

“Germany’s leading role in NATO matters at this critical moment for European security,” Stoltenberg said. “We need a strong Bundeswehr which is ready to fight at the heart of the alliance,” he added, saying Scholz’s commitment to the 2% spending goal was evidence of his government’s “responsibility and leadership.”

In his earlier speech, Scholz reiterated Germany’s commitment to two defense projects with France that have become bogged down in part due to tensions with military contractors.

Germany is taking the lead on a tank program known as the Modern Combat Ground System, while France is responsible for the Future Combat Air System fighter project, which Spain is also involved in.

Read More: Germany and France Renew Commitment to Stalled Defense Projects

“We bear more international responsibility than ever before and must live up to it through military engagement if necessary,” Scholz said.

“We need armed forces that are capable of protecting our country,” he added. “Armed forces with the capabilities, personnel and equipment to defend the security of NATO territory. Wherever NATO needs them.”

--With assistance from John Follain.

(Updates with Stoltenberg comments starting in seventh paragraph)