Making tanks instead of cars: from a military point of view it is necessary; From the economic point of view, it seems sensible. This is the perspective presented by the ‘IPG-Journal’, a publication of the Friedrich Ebert Foundation, related to the Social Democratic Party (SPD), by its economic analyst Vera Gohla. Remember there that two key ministers of the Government are social democrats: the Defense, Boris Pistorius, and Finance and SPD leader, Lars Klingbeil. And that Germany raised the debt brake for Defense. This implies a blank check for these investments and a special fund of 100,000 million euros has also been planned until 2035. Everything seems prepared for rearmament to act as a catapult, after two years in recession, closing 2025 under the sign of stagnation and with the automotive sector in crisis.
The accounts are not so clear nor do the sectors referred to have an equivalent weight: the arms industry provides employment, direct or indirect, to half a million workers and represents a 1% of German GDP. Of the automotive as a whole they depend 5.5 million jobs and provides a 4.5% al PIB. It is the backbone of the German industry, even in crisis. But it is true that both sectors are in opposite dynamics. That of armaments is booming, while the opposite is happening with the ‘Made in Germany’ of motors.
From Brussels, a ‘Europeanization’ of investment in Defense is promoted, precipitated by the russian threat and the fear that the United States will abandon kyiv and its European allies to their fate. The global arms industry has skyrocketed its turnover with an increase of 6%, according to the sales report of the 100 largest manufacturers in the arms sector. Stockholm International Peace Studies Institute (SIPRI). The war in ukraine It is the great engine of this rise. According to SIPRI, governments trust more in rearmament than in diplomacy.
Germany cannot compete with American competition. But the growth of their companies is already greater than the global average of 6%. In Europe as a whole, the sector’s sales increase was 13%. The four largest German arms manufacturers — Rheinmetall, ThyssenKrupp, Hensold and Diehl — stand at 36%. Let Germany be among the allies of the I’LL TAKE willing to increase their military spending up to 5% – between direct spending and investments – helps their industry.
Of the four German companies mentioned, only Rheinmetall is among the top 20 on the SIPRI list. The top six positions are for the US, with giants such as Lockheed Martin, RTX and Northrop Grumman.
Plan rearmament, even if peace comes
“We cannot repeat the mistakes of the last 30 years. We must think operationally. Not focus on the Russian threat, but plan European rearmament even if, as we all hope, peace comes to Ukraine,” argues Rheinmetall CEO Armin Papperger, in a meeting with foreign correspondents in Germany. Think long term is the businessman’s maxim, in conjunction with the will of the coalition between the conservative bloc of Friedrich Merz and the SPD.
Thinking about immediate needs will not bring European industry out of submission to the United States, he warns. Rheinmetall has a full order book for the next 15 years. It is necessary to increase production capacities, innovate and develop competitive products, as its ‘Leopard2’, the armored ones for which Volodímir Zelenski It was clamoring for almost a year until Berlin gave them the green light in 2023.
The ‘Leopard2’ were one of the red lines that Berlin took its time to cross. With Merz in the Chancellery, the rearmament that had already begun more timidly under his predecessor was accelerated. Olaf Scholz. But there have been many – too many, in Papperger’s opinion – the decades of German timidity in matters of Defense.
Rheinmetall aims to skyrocket its sales to 50 billion euros by 2030. That is, five times its current volume. In 2021, a year before the start of the Russian invasion, its sales volume was 5.7 billion euros. It closed the 2024 financial year with 9.8 billion euros. In November, work began on a new factory in Lithuaniaclosed an agreement for another plant in Bulgaria and, in its order carousel, the manufacturing of ATACMS rockets for Lockheed Martin. It will foreseeably be the great beneficiary of the increase in Germany’s Defense allocation, which according to Merz’s plans will triple between 2025 and 2030, reaching 180,000 million euros.
“We want long term contracts. Only in this way can you innovate,” says Papperger. When asked if his political interlocutors include the far-right Alternative for Germany (AFD)Papperger has a quick response: “We only negotiate requests with the parties in the Government. And the AfD is not in the Government.”
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