German defense company Rheinmetall has formed a joint venture with Italian defense group Leonardo to supply more than a thousand main battle tanks and infantry fighting vehicles to the Italian armed forces, in a deal worth €23 billion.

The partnership includes the KF51 Panther main battle tank and the Lynx infantry fighting vehicle, as announced by Rheinmetall on Tuesday. The Panther will be produced in equal parts by Italian companies, Rheinmetall, and its subsidiaries.

This deal is a significant step towards positioning Rheinmetall as one of the world’s largest defense contractors. Recently, Rheinmetall acquired U.S. vehicle specialist Loc Performance Products for $950 million, boosting its share of the U.S. defense market—the world’s largest.

The acquisition increases Rheinmetall’s production capacity in the U.S. and strengthens the group’s ability to secure $60 billion worth of contracts for armored personnel carriers and military trucks for the U.S. armed forces.

Rheinmetall expands into the U.S. defense market

According to German Foreign Policy, Rheinmetall heavily promoted its weapon systems at the U.S. defense trade fair AUSA, which concluded on October 16.

The U.S. remains the world’s largest defense market, and Rheinmetall aims to increase its presence there significantly. The company hopes to secure the tender to replace the Bradley infantry fighting vehicle (IFV), with around 4,000 IFVs worth an estimated $45 billion at stake.

Rheinmetall is also bidding for the Joint Tactical Truck Program, which involves producing 40,000 military trucks at a cost of $16 billion.

In addition, Rheinmetall recently won a contract to produce eight prototypes by 2025 for an unmanned ground vehicle designed to transport supplies and equipment in rough terrain. The company is also collaborating with U.S. firm Honeywell to develop advanced vision systems and auxiliary units for military vehicles.

Critical supply to the Pentagon

Rheinmetall’s acquisition of Loc Performance Products in August significantly improved its chances of winning major U.S. defense contracts, including those for armored personnel carriers and military trucks.

This acquisition is particularly valuable as it brings both new expertise and production capacity to Rheinmetall, enabling the company to comply with U.S. regulations requiring these vehicles to be manufactured domestically.

Rheinmetall states that the acquisition provides “significant capabilities in the U.S.” and enhances its subsidiary, American Rheinmetall Vehicles, to serve the U.S. Department of Defense more effectively.

Strengthening Rheinmetall’s position in Europe

Rheinmetall has also made significant strides in consolidating its dominance in the German and European markets. The Düsseldorf-based company could receive between €30 billion and €40 billion from Germany’s €100 billion defense budget for the Bundeswehr.

Rheinmetall supplies a range of defense products, including €8.5 billion in artillery ammunition, 6,500 military trucks worth €3.5 billion, and 123 vehicles under the “Heavy Infantry Gun Carrier” project, valued at €2.7 billion.

Further orders come from other EU countries, partly driven by the war in Ukraine. For instance, in July, Rheinmetall agreed to supply 14 Leopard 2A4 main battle tanks and three Büffel armored recovery vehicles to the Czech Republic, for delivery to Ukraine.

Lithuania, in parallel with the deployment of the German “Lithuanian Brigade” equipped with Leopard 2A8s, plans to purchase these tanks, in which Rheinmetall is involved. Denmark has also ordered 16 Skyranger 30 turrets from Rheinmetall for its air defense system.

Rheinmetall’s joint venture with Leonardo

On Tuesday, Rheinmetall announced its next step in penetrating the international tank market through a joint venture with Leonardo. This collaboration will produce the KF51 Panther, which is still under development, and supply the Italian army with both the Panther and the Lynx IFV.

In total, over a thousand tanks will be delivered to the Italian armed forces under the €23 billion contract. The joint venture is split 50-50 between Rheinmetall and Leonardo, with 60% of the Panther’s production to take place in Italy, and 40% in Rheinmetall’s German plants. Of the Italian portion, 10% will be managed by Italian Rheinmetall branches, ensuring equal distribution of sales.

Funding for AI subsidiary

Rheinmetall’s subsidiary, YardStick Robotics, specializing in AI-controlled robots, and Rheinmetall Waffe Munition, received €1.4 million in funding for the ‘RoX’ research project. This project, supported by the German Federal Ministry of Economics and Climate Protection, has a total budget of €52 million.

YardStick Robotics aims to advance AI-driven robotic systems for industries such as manufacturing, logistics, and services. Earlier this year, it secured €3.2 million for its ‘Robot-X’ project under the Manufacturing-X initiative, furthering research in AI-based automation.

Franco-German partnership falters

Italy initially planned to purchase Leopard battle tanks from KNDS, a Franco-German joint venture between Krauss-Maffei Wegmann (KMW) and French tank maker Nexter, which uses parts from Rheinmetall. However, disputes within KNDS delayed the project, and Italy opted to proceed with Rheinmetall and Leonardo instead.

This move provides KNDS with new competition in the German and EU defense markets.

Rheinmetall’s role in NATO

By expanding into both the U.S. and European defense markets, Rheinmetall is securing its position as a major pillar of NATO’s defense industrial base. U.S. defense contractors have taken notice, with Rheinmetall also contributing to the production of F-35 fuselage components.

Reflecting the importance of its U.S. business, around one-fifth of Rheinmetall shares are held by U.S. investors, including BlackRock, Goldman Sachs, and Bank of America.

A group of civil society organizations has criticized the European Union’s ‘Global Gateway’ initiative, designed to counter China’s Belt and Road Initiative (BRI), as ‘neo-colonialist’ and ‘too pro-business.’

Launched by the European Commission in 2021, the Global Gateway aims to offer countries in the ‘Global South’ a ‘sustainable and transparent investment alternative’ to China’s BRI. By 2027, the EU plans to mobilize €300 billion for investment in infrastructure such as submarine cables, transport networks, and renewable energy, while also promoting reforms that facilitate market access for European companies.

Officially, the Global Gateway is presented as a ‘win-win partnership’ between countries in the ‘Global South’ and European companies. However, a report published last week (8 October) by NGOs, including Counter Balance, Eurodad, and Oxfam, titled Who Profits from the Global Gateway? raises concerns.

European monopolies dominate Global Gateway fund management

“When we think about the Global Gateway, it almost looks like a black box with too much branding,” said Farwa Sial at the launch of the report.

The NGOs particularly criticize the influence of large European companies in fund management and the lack of transparency in decision-making and judicial arbitration, with the Global Gateway Business Advisory Group playing a central role. This group primarily consists of economic actors from Western European countries like Germany, France, Italy, Belgium, and Spain, including companies such as Total Energies and Bayer. Many of these companies also have historical ties to ‘partner countries’ in the Global South, dating back to colonial times.

A new version of the Berlin Conference on the division of Africa

“If you really want to know which companies are active where, just look at who the colonial powers are,” said Paul Okumu, head of the African Platform secretariat, at the same conference. “Germany still wants to do projects in its former colonies. In my country [Kenya], the British are still in control.”

For Okumu, the link between the projects selected by the Global Gateway and the companies’ countries of origin is reminiscent of the Berlin Conference (1884-1885), when European powers carved up Africa. “Basically, what we are doing is Berlin 2.0: dividing the continent into different countries and allocating projects to them,” he argued, suggesting that European countries are repeating the colonial process under the guise of the Global Gateway.

The issue of Africa’s division among imperialist countries in the 19th century, often referred to as the ‘Scramble for Africa,’ seemed to have been resolved with the Berlin Conference. Yet, the decisions made there did not prevent the colonial powers from clashing over their territorial ambitions.

Concerns about deepening debt and inequality

NGOs are concerned that the Global Gateway initiative could exacerbate the debt crisis in some countries.

“We analyzed [this fund’s partner countries] and found that 29 out of 37 are highly indebted poor countries,” said Alexandra Gerasimcikova, co-author of the report and head of policy and advocacy at Counter Balance. “Such projects are really risky,” she added, warning that they could further increase the debt burden on countries already facing serious financial challenges.

Commission representative: Grants alone cannot eradicate poverty

The question of whether loans or grants are the better form of financing sparked a debate between the European Commission representative and the civil society organizations at the report’s presentation.

According to Marlene Holzner, head of unit in the Commission’s Directorate-General for International Partnerships, the Global Gateway seeks new approaches, such as involving the private sector and banks in supporting the development of countries in the ‘Global South.’

“For the last 50 years or more, we have not been able to reduce poverty with the traditional approach of ‘I give you a grant, you get a gift, you don’t have to pay it back.’ […] We need to change our perspective. The Global Gateway is designed to be a paradigm shift, and we are acting based on what we have learned.”

Proposal for a new ‘Marshall Plan’

Criticizing the lack of political will to address global poverty, Sial proposed a new reconstruction plan modeled on the Marshall Plan, which helped rebuild Europe after World War II.

“In my view, the Marshall Plan was based on grants and soft loans, and that is what got Europe back on its feet,” Sial said. “If we really want to make such an offer to the world, I believe it is possible. The money is there, and we can do it.”

Global Gateway criticized for ‘protecting Europe’s strategic interests’

However, the idea of Marshall Plan-style funding did not garner unanimous support from all NGO representatives.

“In this room, we glorify grants. But there is nothing more absurd than giving me $70 billion and taking $480 billion from my continent,” said Okumu.

He argued that the problem lies in the fact that the ‘development fund’ primarily serves to protect Europe’s strategic interests and maintain the competitiveness of its companies. “When you look at policies like the Critical Commodities Act and the Green Deal, they fit perfectly into the Global Gateway,” Okumu noted.

The leaders of two of Germany’s rising political parties, the Alternative for Germany (AfD) and the Sahra Wagenknecht Alliance (BSW), faced each other live for the first time.

AfD co-leader Alice Weidel and BSW leader Sahra Wagenknecht appeared on the WELT program “Duel” for a 65-minute debate. They discussed various topics, from the war in Ukraine to attitudes toward Israel, the migration crisis, and relations with neo-Nazis.

Wagenknecht reacted sharply to Weidel’s characterization of the BSW as “useful idiots of the old parties” and “shovel holders” for the establishment. “I find that despicable and offensive,” she replied.

Weidel’s ‘establishment’ attack on Wagenknecht

“You, as people will soon realize, won’t bring real change,” Weidel countered, referring to ongoing coalition talks in the eastern states.

While the AfD leader acknowledged Wagenknecht’s years of political experience and the possibility of dialogue “across party lines,” she added that Wagenknecht was a “dove of the old parties” and would not form a coalition with the AfD but rather with other parties.

Wagenknecht also drew a clear distinction between herself and the AfD’s leader in Thuringia, Björn Höcke, who is known for leading the ethno-nationalist (völkisch) faction of the AfD, which includes neo-Nazi elements.

BSW leader criticizes Björn Höcke and neo-Nazism

“I find it very frightening,” Wagenknecht said, quoting from Höcke’s books, The Politics of Benign Cruelty, The Politics of Large-Scale Repatriation, and Progressive Africanisation. She emphasized that while controlling “uncontrolled immigration” is also a BSW policy, the idea of deporting immigrants who have lived in Germany for decades and integrated into society is “horrible.”

When asked to rate Weidel’s political stance “on a scale of one to ten,” Wagenknecht replied “maybe a six.” She noted that Weidel represented “conservative positions” with a “strong market orientation,” calling her the “attractive face” of a party largely dominated by the “Höcke wing.”

Summing up her view of Weidel, Wagenknecht said, “You can’t form a coalition with people who are mired in neo-Nazi swamps.”

Wagenknecht: ‘I am not a communist’

In response, Weidel accused Wagenknecht of once being a member of the “communist platform glorifying Stalinism” within her former party, Die Linke. Weidel added that this platform supports the economic models of Cuba and Venezuela.

While Wagenknecht advocated for providing loans for infrastructure investment, Weidel argued for enforcing Germany’s constitutional “debt brake,” calling instead for austerity measures in social spending and insisting that benefits should no longer be paid to foreigners.

The moderator attributed these differences to their “different socializations,” pointing out that Wagenknecht grew up in East Germany and Weidel in East Westphalia. Wagenknecht firmly responded, “Don’t call me that. I’m not a communist.”

Similarities and differences on migration

On the topic of “reverse migration,” Weidel clarified that it referred to “enforcing the laws of the country,” and distanced herself from AfD leaders advocating the deportation of “millions.” She spoke instead about increasing the pressure for assimilation and emphasized that asylum is a “temporary stay,” not a pathway to permanent immigration.

Weidel argued that those who obtained German citizenship “fraudulently” should lose it, and she called for “qualified immigration according to strict criteria,” similar to the Canadian system. However, some AfD leaders have proposed that even those with German passports could be forced to leave if deemed insufficiently integrated.

Weidel also defended Höcke, mentioning that he had previously debated the CDU’s Thuringia candidate, Mario Voigt, and argued that “reverse migration” could also mean encouraging Germans abroad to return home.

Consensus on Russian energy

On the Ukraine-Russia war, Wagenknecht defended Germany’s use of Russian gas, calling the sanctions against Russia an “own goal” and advocating for a “negotiated peace.” Weidel agreed, noting that these had been long-standing AfD positions.

Wagenknecht targets AfD’s stance on Israel

On foreign policy, however, the two leaders diverged over Israel. Wagenknecht criticized the AfD for unilaterally siding with the Israeli government in the Middle East conflict, describing Gaza as an “open-air prison” and accusing the Israeli army of war crimes. “You cannot fight terror with terror,” she said, and argued that a “just peace” must involve a two-state solution.

Weidel, on the other hand, defended Israel’s “right to self-defense” and highlighted “Muslim anti-Semitism,” insisting that the AfD would not tolerate “Krawallbrüder” (hooligans) in Germany. She also argued against arms sales to Israel, warning that such sales would deplete Germany’s own military reserves.

Wagenknecht pointed out that the BSW had previously tabled a motion to stop arms sales to Israel, which the AfD did not support.

Trump: Weidel’s US presidential candidate

During the debate, the two politicians were also asked about the upcoming US elections. Weidel expressed her clear preference for Donald Trump, saying, “Sometimes he can be very sharp in his statements, but he has made good policies.” She praised Trump’s economic approach in particular.

Wagenknecht, however, said she was relieved not to be voting in the US election. “Trump is crazy, and Harris will continue her war policies,” she said, expressing dissatisfaction with both candidates.