Germany could have a military as small as that of Luxembourg, won't change the fact they run the European Union and have done for decades.
The Germans are pushing for an EU military to do the fighting for them. They see no problem with that so long as Berlin retains political control over it. Germany exerts its influence via soft power and is very good at doing so; France may strut around the globe as a nuclear power yet Obama always considered Merkel his primary partner.