Angela Merkel has made two crucial mistakes in foreign policy/defense spending that have now become clear. The first was the assumption we could appease Russia by offering it a carrot, namely gas pipelines and mutual investments. We now see that the economic dependence goes both ways, making Germany vulnerable to what a dictator like Putin decides to do. The second mistake was the belief that investment in its own military was a waste of money. Germany has diverted hundreds of billions to other areas over the decades, because it relied on the assumption that its alliances would protect it - Trump and Brexit have harshly shown that this might not be the case -, or that it no longer had actual enemies left to fight.
In her defense, her options were logical and a lot of the money that would otherwise go to less productive sectors of the economy, such as defense, went into more useful ones like research and development. Russia has also bought a ton of German goods, although arguably it would have regardless. However, compounded with her disastrous energy policy, Merkel made Germany more dependent than ever, a weak regional power at best. She simply did not foresee a future like our present.