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Berlin, Germany – Germany has unveiled a new defence industry strategy that aims to strengthen the country’s security and rapidly re-equip the Bundeswehr. However, according to analysts at the Royal United Services Institute (RUSI), the document does not contain clear fiscal commitments and political details necessary for its effective implementation.
What does the new strategy envisage?
The document, presented in December 2024, is Germany’s response to the war in Ukraine and the urgent need to modernise the army. The main goal is to create a competitive, scalable and adaptable defence industry that can respond to all challenges. Two key initiatives have been proposed for this purpose: multi-year defence funding and the identification of “core technologies” that Germany wants to produce on its own.
However, the strategy does not yet contain specific financial commitments and implementation mechanisms.
Lack of specific guarantees is the main problem
RUSI notes that multi-year financing is an important toolfor the stable development of the defence industry, as it gives manufacturers long-term confidence in demand. However, Germany’s strategy does not spell out any real mechanisms for such financing. It only suggests “exploring the possibility” of placing orders for 10 years in advance.
The definition of “key technologies” also remains vague. For example, the category of “munitions” includes all types of weapons, without distinguishing between simple ammunition and sophisticated technology missiles. The lack of detail makes it difficult to invest in production, as defence companies do not understand which technologies they should focus on.
Expanding production through Europe and exports
Germany is considering expanding its defence production through cooperation with the European Union, but this approach has significant challenges. European countries often have different requirements for defence products and prefer national producers. Poland has recently purchased tanks, howitzers and aircraft from South Korea, while Germany and France are developing a new combat system without involving other partners.
Analysts believe that Germany should not rely solely on the EU, but should develop its export policy more actively. An example is the recent approval of the sale of Eurofighter Typhoon fighter jets to Saudi Arabia. Such deals could significantly strengthen Germany’s industrial potential.
Is the Bundeswehr ready to support the defence industry?
Currently, all Bundeswehr procurement is set by the German defence industry, but its products are often too specific to German needs and have a limited market. The Bundeswehr should consider the export potential of its equipment to attract additional investment and reduce production costs.
The UK already uses a joint think tank where government and defence industry experts calculate the potential of products for the global market. Germany could adopt this approach.
Financing of reserve production facilities
The strategy proposes to pay manufacturers to maintain reserve production capacities to quickly increase production in case of emergency. This is logical for ammunition production, where automated lines can be quickly activated, but much more difficult for the production of complex equipment, such as fighter jets.
Businesses need time and additional costs to train staff and expand production capabilities. Germany currently has €100 billion in Zeitenwende funds, but the strategy does not explain how new initiatives will be financed once they are exhausted.
Conclusion: an ambitious plan without implementation mechanisms
Germany’s defence industry strategy is the right step, but without clear financial commitments it risks remaining a mere declaration. European coordination of production is important, but an export-oriented approach could bring faster results. Funding for spare production capacity is the right initiative, but it needs concrete implementation mechanisms.
The success of the strategy depends on Germany’s ability to overcome bureaucratic barriers and offer a realistic model for long-term financing. Is Germany ready to turn its ambitious plans into real military power? Time will tell.
