The area between Hamburg and Hanover its Germany it is known for its landscapes and rich forests. But what is not visible at first glance, is that the country’s defense industry has developed around it.
Artillery fire and explosions ring out frequently in the area, while barbed wire and signs warn citizens not to approach certain areas, keeping most of the activity hidden from the public. This is the most militarized area of Germany, while Ukrainian forces were trained there to use Leopard 2 tanks.
Germans are deeply wary of arms exports, something rooted in the country’s history of aggression over the past century. However, as many countries invest in armaments programs against the background of the Russian invasion of Ukraine, the German defense industry is the one that benefits the most, Bloomberg reports. At one point in time, the company Rheinmetall, the country’s largest defense industry, just joined the main stock market index.
Germany ranked sixth in arms exports in 2022, following the US, France, Russia, China and Italy, according to the Stockholm International Peace Research Institute. Their biggest sale last year was three state-of-the-art submarines built by Thyssenkrupp Marine Systems, for each of which Israel reportedly spent 1 billion euros.
The German government was initially hesitant to supply Ukraine with Leopard 2, awaiting the moves of the US to supply tanks to Kiev. However, as Bloomberg comments, Berlin’s reticence also showed how the war pushed the country out of its comfort zone.
As even peaceful Japan increases spending on military hardware, the world’s defense industry is seeing demand rise. Germany’s industry stands out, however, in the wake of the German government’s shift in defense spending.
Three days after the Russian attack on Ukraine in February 2022, the chancellor Olaf Solz spoke to the German parliament about a historic turning point. The long-standing ban on sending weapons to conflict zones has become a thing of the past, as it was deemed necessary to provide assistance to Kiev. At the same time, a special fund of 100 billion euros was created to upgrade the equipment of the German armed forces. Germany would finally heed international calls to meet the NATO defense spending target (2% of GDP).
A year later, the opposition in Germany, as well as critics of Solz abroad, accuse the German government of delays in implementing Berlin’s change of attitude. On the contrary, these delays seem to be welcomed by a large proportion of German citizens, many of whom were horrified at the prospect of German weapons being deployed again on the battlefields of World War II.
Despite conflicting views, Germany’s defense industry feels vindicated. “Many people now understand that security is not a given – you have to fight for security and democracy,” Rheinmetall CEO Armin Papperger said in an interview on March 10 at the company’s Düsseldorf headquarters. “They also understand that we have to spend money on the armed forces. A country like Germany is currently relatively unable to defend itself because it does not have enough military equipment. This has to change,” he added.
Soltz: In the foreground is the need for an efficient defense industry
German Chancellor Olaf Scholz visited military installations last year. Germany’s ability to defend itself requires “strong defense forces and a capable arms industry,” he said in January. In February, as Hensoldt reported a record 5.4 billion euros in orders, it said Russia’s aggression had brought “back to the political and social fore” the need for an effective defense industry and military.
Some companies, such as Krauss-Maffei Wegmann and Diehl, are keeping a low profile. On the other hand, listed Rheinmetall has seen its shares nearly triple in value since the Russian invasion, while in March it reported record profits while introducing new production lines.
The Scholz government’s aim to exploit the country’s industrial capacity to upgrade the armed forces appears to be met with reservations by many Germans. The chancellor addressed the issue in a speech to the Bundestag on March 2: “Peace cannot be achieved by shouting ‘no more war’ in Berlin and at the same time demanding a halt to all arms supplies to Ukraine,” he said.
With information from Bloomberg