The weapons giant Rheinmetall received fromGerman army the largest order in its history: 8.5 billion euros to produce artillery ammunition which will be used to fill the empty depots of the Bundeswehr (Berlin’s armed forces), but to a large extent also to supply Ukraine again. The value of Framework Contract of 1.3 billion euros, already signed in July 2023, has in fact been increased by others 7.2 billion. The object of the trust consists of millions of shots from 155 millimeters capable of reaching a distance of forty kilometers, to be delivered starting from the beginning of 2025. The duration of the new framework contract is not known, even if the previous one was valid for six years. The Chancellor’s Government Olaf Scholz had announced aepochal turning point” in July 2022, obtaining the approval of one from the Bundestag (the lower house of Parliament). extraordinary allocation of one hundred billion for the strengthening of the army. As the conflict in Ukraine continues, a new era of conflict has also begun in Germany investments in the armed forcesculminating in the compulsory selection plan for the return to the military starting next year, announced by the Minister of Defence Boris Pistorius to increase the size of the active army and reserve troops.
Among European armaments manufacturers, Rheinmetall is perhaps the one that benefits most from the increase in military spending: “Politics and business must work together, we are one now” CEO Armin Papperger had the opportunity to declare. Already in 2023 his company had recorded a sales volume of 7.2 billion euros: this year it aims to reach ten billion, a 40% improvement. The continuously rising financial stock has become very attractive among investors and for several months it has almost constantly been quoted above five hundred euros per share. The giant no longer even suffers from the old difficulties in finding new graduates to hire, so much has the appeal of the defense sector grown – even among young people. Since May 2024 Rheinmetall has even become a sponsor of the football team Borussia Dortmundone of the most popular in the country: “With the war in Ukraine,” said club CEO Hans-Joachim Watzke, the arms industry “has taken on a new meaning, especially today when we see every day how freedom must be defended in Europe.” A concept also expressed by the Minister of Economy, Green Robert Habeck: “That Rheinmetall sponsors a football team is unusual, but it shows where we are, which is why the practiced and also understandable reluctance not to talk about the defense industry, not to want to show off politically with the armaments industry, excludes the whole , it is no longer sustainable and it is no longer correct.”
On the other hand, Defense Minister Pistorius recently warned: “There is one new threat situation. Russia has not only attacked Ukraine but verbal attacks against other states are also increasing. The Duma increased the production of weapons. According to all international military experts, we must start from the assumption that from 2029 Russia will be militarily capable of attack a NATO state or a neighboring one.” This is why Pistorius also intends to order 105 new Leopard tanks 2A8 for 2.93 billion euros to the Knds group (consisting of the German Krauss-Maffei Wegmann with the French Nexter) to be delivered to the Bundeswehr by 2030. At the basis of the arms race in Europe is the belief that, if aggression repays Putin in Ukraine, the Russian autocrat will be invited to repeat elsewhere the same policy, and therefore the conflict should not be considered as an isolated event. A brake on European war spending, however, comes from community constraints on the deficit: in Germany, a 2009 law imposes a ceiling that does not exceed 0.35% per year of GDP, i.e. a maximum nine billion this year. Unlike what happened to Italy, however, the European Commission did not open infringement proceedings against the German state, instead criticizing the lack of productive investments. Berlin, on the other hand, was able to surpass the milestone this year 2% of GDP for defense expenses, foreseen by NATO, only through accounting measures.
