France has withdrawn its opposition to non-EU companies accessing EU-funded financial incentives for Europe’s defense industry. This decision aligns with Brussels’ ambition to foster a stronger domestic arms industry that is less dependent on the United States.

French diplomats in Brussels have signaled support for a proposal permitting up to 35% of EU budget-funded incentives to be allocated to defense products from outside the 27-member bloc. This shift in stance was revealed by five individuals familiar with the technical discussions, as reported by the Financial Times (FT) last week.

For nearly a year, Paris resisted the involvement of defense firms from countries such as the United States, Britain, Israel, and Turkey in the EU’s proposed European Defence Investment Plan (EDIP). French officials argued that supporting only European defense firms was critical to the bloc’s pursuit of “strategic autonomy”.

Trump’s arrival prompts a policy shift

This position evolved earlier this month; two officials noted. They explained that it would be challenging for the EU to lobby President-elect Donald Trump to maintain U.S. military support for Europe while simultaneously barring American companies from participating in efforts to bolster the European defense industry.

“Since [the U.S. election], everybody is thinking a little bit smarter,” said one official.

Countries with close ties to the U.K. defense sector, such as Sweden, had opposed France’s earlier stance, citing concerns that it might exclude firms with British shareholders or those reliant on U.K.-sourced components.

The 65/35 proposal and negotiations ahead

The 65/35 proposal, drafted by Hungary (the current holder of the EU presidency) with contributions from France, Germany, Italy, and Spain, has emerged as a potential compromise. Negotiations on the plan will continue in the coming weeks, with possible revisions before its presentation to the European Parliament in early 2025.

The proposal includes a clause barring participation by countries deemed contrary to the bloc’s security interests or the principle of “good relations”. One official described the plan as a “good basis” for a compromise.

Boosting Europe’s defense industry

The European Defence Investment Plan (EDIP), first proposed in February last year, requires approval from all EU capitals and the European Parliament. Its primary goal is to fund joint production and procurement of European-made weapons, addressing critical gaps in the continent’s underfunded arms industry.

Key objectives include increasing the availability and supply of essential defense products, and tackling bottlenecks in critical supply chains, including those tied to Ukrainian manufacturers.

Although only €1.5 billion has been allocated to the initiative under the current EU budget (running until 2027), many member states are advocating for substantial increases in funding.

The EDIP is expected to establish a long-term framework for future EU defense initiatives. This effort reflects the EU’s broader push toward defense self-sufficiency, a trend likely to accelerate under Trump’s presidency. Even before the election, Brussels had been encouraging coordinated defense procurement to enhance interoperability, reduce costs, and respond to rising national defense budgets across member states.

Handelsblatt, one of Germany’s leading business newspapers, recently surveyed business leaders and readers on their views regarding a potential AfD-CDU coalition.

The discussion gained momentum after Christian Reber, a prominent start-up entrepreneur, publicly urged the CDU to consider a coalition with the AfD “under certain conditions.”

“Be open to a coalition with the AfD, provided that no explicitly right-wing extremist party member holds political responsibility,” Reber wrote in a post to CDU leader Friedrich Merz on X (formerly Twitter) two weeks ago. Reber further emphasized the need for a “German, citizen-oriented, and European policy” through cooperation with the AfD.

Reber, who sold his online start-up Wunderlist to Microsoft for a significant sum in 2015, sparked wider debate among German entrepreneurs and political observers.

Christian Miele, a member of the renowned Gütersloh-based Miele family and former chairman of a business start-up association, also criticized the CDU’s “firewall” against the AfD.

“The AfD is my opponent and must not be allowed to assume government responsibility,” Miele told the Süddeutsche Zeitung. He added that he strongly opposes the party but believes the phenomenon warrants more open discussion.

Miele warned of another “four years of lazy compromises” if the status quo persists, suggesting that the AfD could emerge as Germany’s leading party in the 2029 elections.

Frank Thelen, an investor widely recognized from the TV start-up show Die Höhle der Löwen, echoed these concerns, stating, “Nobody wants a strong AfD, but at the moment, the electorate may leave us no choice but to bring their democratic voices together in a functioning government.”

Readers weigh in: Mixed reactions to an AfD-CDU coalition

Handelsblatt readers offered a range of opinions on the matter, with many voicing cautious support for collaboration.

One reader remarked that the AfD is a “democratically elected party” and that ignoring the will of approximately 20% of German voters is inherently undemocratic. Another commented, “In a democracy, the voice of the citizens must be heard. Democracy must withstand different currents.”

“The CDU’s firewall against the AfD defeats the purpose of democracy,” a reader asserted, summarizing a sentiment shared by others.

Some readers suggested that an AfD-CDU coalition could serve as a litmus test. “A coalition in Brandenburg would have shown whether fears about the AfD as a governing partner were justified or unfounded,” noted one commentator.

However, others expressed strong opposition. Referring to Germany’s history, one reader warned against collaboration with a party that “sympathizes with the dictatorships of this world.” Another dismissed the idea on principle, stating that a coalition with an “unpredictable party” like the AfD would be “a risky balancing act,” particularly in the wake of uncertainty caused by the current traffic light coalition.

Authorities in Germany are preparing to convert underground stations and other public buildings into bomb shelters, citing the growing risk of war with Russia.

According to Bild newspaper, the Federal Office for Civil Protection is actively researching public spaces that could be repurposed as shelters. The agency also plans to launch an app to help residents locate nearby shelters during emergencies.

The German public will be encouraged to build private shelters in their homes, particularly in basements. This shift comes after Germany reduced its public shelter network in 2007, when authorities deemed it unnecessary.

Currently, Germany—a country with a population of 84.4 million people—has only 579 public shelters, capable of accommodating just 500,000 individuals.

Ralph Tiesler, head of the Federal Office for Civil Protection, emphasized the urgency of the situation, warning that it could take years to rebuild a robust network of shelters. He called for faster solutions to address potential threats.

To expedite preparations, authorities have begun compiling a comprehensive list of potential shelter sites, including underground stations, offices, and other public buildings. In addition, they are developing a civil protection app with a live map showing the nearest available shelters. A public awareness campaign is also being planned to educate citizens on self-protection measures.

The opposition Christian Democrats (CDU) criticized the government’s preparedness for Russian air strikes, urging an immediate increase in shelter capacity. CDU MP Andrea Lindholz stated, “Although we hope that such a situation will not arise, we must be prepared to protect the population in an emergency. We need to significantly increase shelter capacity in Germany.”

Lindholz pointed to Poland as a proactive example. Starting in 2026, Poland will require all new buildings to include access to emergency shelters. The country has also identified temporary shelters such as underground stations and tunnels to protect its entire population.

For comparison, the British research organization Subterranea Britannica reports that the United Kingdom has 276 bunkers designed to safeguard the population during a nuclear attack.