Europe
German capital flows into the defense industry as traditional sectors face crisis
German capital is pouring into the defense industry from all sectors. While Germany’s traditional industrial sectors face a major crisis, German capital is focusing intently on large, anticipated orders from the German Armed Forces.
This trend is evident in the German Security and Defense Industry Federation (BDSV). According to the federation’s own data, its membership has nearly doubled from 243 to 440 since November 2024, with two-thirds of its members coming from the “Mittelstand”—historic, family-owned companies that are generally broader than typical SMEs.
Cathrin Wilhelm, who is responsible for the Mittelstand at BDSV, told the Handelsblatt daily, “We are virtually being inundated with interested parties. Many companies are suppliers to the automotive and machinery industries and are struggling with capacity utilization. They now see an opportunity for growth in the defense sector.”
Fabian Kienbaum, who provides personnel consulting services to family businesses, also believes such an opportunity exists. “Those with the technology, production competence, and quality standards are looking more closely at whether they can position themselves as suppliers for the defense industry or for defense orders,” he states.
This particularly concerns mechanical components, assembly, or coatings. “The need for qualified personnel to carry out these transformations is immense,” says Kienbaum.
Handelsblatt examines how highly experts rate this potential by focusing on three Mittelstand companies.
Germany’s defense budget alone is set to increase from its current €80 billion to €170 billion. The consulting agency McKinsey also estimates that by then, the annual volume of the European defense industry market will rise to €335 billion, which is almost three times its current size.
A large portion of this belongs to major corporations like the Dax group Rheinmetall, tank manufacturer KNDS, or the military division of Airbus. These companies, in turn, subcontract 80% of their orders.
According to its own data, industry leader Rheinmetall has approximately 23,000 suppliers, most of which are medium-sized enterprises. Meanwhile, many automotive suppliers are in desperate need of orders.
However, the issue is not just about better utilization of production capacities. The war in Ukraine has led to a change in thinking within many family businesses. Furthermore, the prospect of Donald Trump taking office and the promise of limited US aid are pushing many Mittelstand companies to actively enter this sector.
“Deciding to work for defense industry companies is one thing, but deciding to have weapons produced with your own technology is another,” says a managing partner of a machine manufacturer from Sauerland who wished to remain anonymous.
In February, another machine manufacturer asked if they wanted to participate jointly in a tender for a defense project. The tender was seeking machines for the production of artillery shells.
However, the family company in question had decided from its founding day not to produce for the defense industry. Was this decision still valid in 2025?
The entrepreneur spoke with his partners. The moment Trump questioned the NATO alliance at the beginning of the year was decisive: “We understood that our values of peace and freedom were never questioned, but today, different decisions must be made than in the past.” This “realization,” according to Handelsblatt, united the family.
“Many families are divided over whether to set aside their statutes and beliefs that emerged during the Cold War,” says Tom Rüsen, general manager of the Witten Institute for Family Business Foundation.
According to him, “Generation Z” does not see a problem with armaments, but the post-World War II “baby boomer” generation and Generation X see more issues.
Consequently, the family decided to involve the employees in the process. “We wanted to give everyone an opportunity to understand our decision-making process and our struggle,” says the entrepreneur.
Ultimately, the conclusion was reached that “sustainability is not possible without democracy and freedom,” and “the employees understood this as well.”
“Not everyone would have made the same decision,” says the entrepreneur, “but they understand that we have taken a sincere stance and did not just accept this job because the opportunity was right. That was important to us.”
At the same time, the partners determined that this decision should be reviewed every year and limited the maximum annual order volume from the defense industry: “Those who can decide anew annually are those who do not become dependent.” Meanwhile, the company received the order, and there are other requests.
Another newcomer to the sector is Grüninger Electronics, located in Weinstadt near Stuttgart. Managing partner Thomas Hagen openly admits that he knew very little about the defense and security industry until now, which is why he joined the BDSV.
Grüninger specializes in 3D-printed circuit boards. The company manufactures circuit boards and, through “reverse engineering,” reprints, repairs, and re-equips them.
Circuit boards are found in every modern car and are now also used in the defense industry.
However, a large portion of circuit boards are manufactured in Taiwan and China, with Europe holding only 2% of the world market.
Würth recently ceased its circuit board production. “Those who value data sovereignty and resilience should keep the knowledge in the country,” says Hagen. 3D-printed circuit boards are independent of supply chains, and the data remains in-house.
Hagen is continuing his discussions with potential customers during the development phase. Just obtaining the necessary permits for this took nine weeks.
But if Grüninger wants to apply as a supplier, the certification process will be much more complex and lengthy. Hagen, however, sees great potential. Even “old circuit boards” can be reprinted, equipped, and tested, thereby producing spare parts for existing boards. This could significantly increase the operational availability of submarines or tanks, for example.
Many are only now realizing the high demands placed on the sector. The German Armed Forces’ Military Security Service (MAD) vets everyone who works directly with the army. Such a security check currently takes 18 months.
Until now, Grüninger supplied companies in Germany active in mechanical and plant engineering, aerospace technology, and electrical engineering. As a supplier to the defense industry, Hagen plans to significantly grow his company.
The third example company is Armoured Car Systems (ACS), part of the Gruma Group in Friedberg near Augsburg, which produces small series of armored off-road vehicles.
ACS specializes in armoring off-road vehicles like the Mercedes G-Class with its own superstructures. Until now, ACS was a smaller part of the family business; five years ago, it had only 35 employees, whereas today it has 135. This German Mittelstand company knows the peculiarities of the defense industry well.
In 2022, its insurance company announced it would terminate the contract due to the business’s incompatibility with the taxonomy rules at the time. The termination of insurance coverage would have affected the entire corporate group, which has 1,400 employees.
General manager Sebastian Schaubeck explained that the reason was the ACS subsidiary, which operates in the security and defense technology field.
At that time, the EU considered the financing of defense industry companies to be incompatible with the Union’s sustainability goals. “This sector was not valued; on the contrary, no one saw its benefits,” Schaubeck complains.
The war in Ukraine also marked a turning point for ACS. At the end of 2022, the insurance company gave the entire group the green light but did not want to make a public statement.
Looking back, Schaubeck assesses the shock of the Ukraine war: “The reputation [in the sector] has completely changed.” This also applies to political support. For example, SPD’s German Defense Minister Boris Pistorius became the first defense minister in a long time to join the BDSV.
The fact that ACS is already benefiting from a boom is largely related to the company’s decision to start investing in its own vehicle class in 2019, a period when the company was making a loss.
ACS developed and patented a modular vehicle based on the Mercedes G-Class. “This was something the entrepreneurial family achieved entirely with its own resources,” says the ACS general manager. It is also noted that the shareholders were convinced to invest in security for the long term.
According to Wilhelm from the BDSV, securing capital remains a major obstacle for many Mittelstand companies in the defense sector.
Although many banks and funds have changed their statutes that previously rejected armaments as an unethical investment, financing remains a weak point.
Europe
EU faces fury over firefighter cuts during record wildfire season
While European Union countries spend the summer months battling massive wildfires, reductions in firefighting budgets are drawing fierce criticism.
According to a report by EUobserver, firefighters have grown tired of being branded “heroes” by politicians.
“We don’t want to be called heroes; we want to be given resources,” said Ludovic Goblet, a representative of the French firefighters’ union Spasdis-CFTC.
His remarks came days after fresh EU figures revealed that the number of professional firefighters across Europe fell by 18,000 during the worst wildfire year on record.
That decline included a reduction of more than 4,000 personnel in France alone.
French firefighters set out three urgent demands
A coalition of trade unions representing France’s fire and rescue services held a meeting lasting approximately two hours with Interior Minister Laurent Nuñez last Thursday.
The coalition put forward three primary demands: additional resources to cope with the surge in emergency calls, the mass recruitment of professional firefighters, and new legislation to modernise civil protection services.
“The minister failed to meet our expectations; we received no concrete response. We have no guarantees regarding funding, funding strategy, or the content of the legislation,” said union spokesperson Xavier Boy.
Boy noted that the resources allocated to fire services have not kept pace with the rising number of interventions and multiplying crises.
Lack of resources fuels strike call for September
Unions have called for a “major mobilisation” on 29 September, a day when public sector workers are also planning to strike.
David Saquet of the UNSA firefighters’ union told AFP that professional firefighters also plan to stage a protest at Place de la Republique in Paris three days earlier.
Firefighters say they are exhausted following one of the worst wildfire seasons in French history, with provisional estimates indicating that at least 120,000 hectares have burned since the beginning of the summer.
Of the 256,400 firefighters registered with the French Interior Ministry, only 44,000—or approximately 17%—are either professional or military personnel.
In recent weeks, applications to become volunteer firefighters have doubled, and in some departments tripled.
Fire officials report that, driven in part by a wave of public gratitude, they have had to process as many applications in a few weeks as they typically receive in six months.
French interior minister plays for time
Nuñez said on Thursday that long-awaited draft legislation to reorganize the country’s civil protection services would be presented on 8 September.
Launched in mid-2024, the initiative aimed to modernise a system widely seen as on the verge of collapse by providing additional financial support. However, the process had ground to a halt since then.
The interior minister welcomed the “very frank discussions” held with unions on Thursday.
The minister stated that the proposal to be presented in September would “more clearly define the missions” of French firefighters, who “currently have to respond to personal medical emergencies just as frequently as they respond to disasters or fires.”
In a statement published on the social media platform X, Nuñez added that discussions regarding the funding of fire services remain ongoing, with additional resources expected to be allocated in the 2027 budget.
European Commission enforces fiscal austerity
Ahead of this summer, the European Commission told member states that they needed to ensure they maintained an “adequately sized and well-prepared” firefighting force.
Yet the Commission is simultaneously enforcing the EU’s strict fiscal rules, which have led to spending cuts in public services, including fire departments.
Poland, for example, recorded the largest drop in firefighter numbers last year. Alongside France, it was placed under the Excessive Deficit Procedure in 2024.
Belgium faces a similar situation: the country’s fire services are tackling wildfires with a 10% reduction in staffing in 2024 and a further loss of 200 firefighters in 2025.
This development is not only hazardous for the public and firefighters. Damage caused by wildfires this summer has already exceeded 3 billion euros.
Conversely, the same fiscal logic is not applied to defence, where massive investments are being channelled into military equipment.
According to EUobserver, in the face of mounting and increasingly complex threats, austerity policies have left Europe weaker, more divided, and less prepared in almost every respect for the challenges ahead.
Europe
German historian Kittel blames Stalin rather than Hitler for WW2
German historian Manfred Kittel has claimed that Soviet leader Josef Stalin, who gave the “green light” for Germany to invade Poland, was responsible for World War II.
Previously known for his “revisionist” views on the war, Kittel articulated these arguments in a full-page article published in the Frankfurter Allgemeine Zeitung (FAZ), one of Germany’s influential mainstream newspapers.
According to Kittel, driven by the “impetus of a need for war in Europe”, the Soviet Union gave Germany the “green light” to invade Poland by signing the German-Soviet Non-Aggression Pact on 23 August 1939.
The article argues that this made it possible for Adolf Hitler’s “almost instinctive disposition” towards war to “unfold destructively”.
Accordingly, “a deliberately acting Stalin” thus became an “accomplice” in World War II.
Manfred Kittel made headlines years ago when extreme revisionist tendencies emerged under his leadership at the Berlin-based Flight, Expulsion, Reconciliation Foundation.
At present, Kittel criticises Stalin’s “complicity” in the outbreak of the war in 1939 and attempts to demonstrate “plainly and clearly […] the fatal role of Russian imperialism”.
In 2025, Kittel also described Russia’s war against Ukraine as a “war of annihilation”.
Mainstreaming of “revisionism” continues in Germany
According to German Foreign Policy, Kittel began to gain wider public recognition from 2009 onwards.
At that time, he was appointed director of the Flight, Expulsion, Reconciliation Foundation, which had been established in late 2008 to create a documentation centre in Berlin on forced migration.
The centre’s focus was to address the resettlement of German-speaking populations from various countries across Eastern and South-Eastern Europe as a consequence of mass crimes committed by Germans during World War II.
Kittel was appointed director of the foundation despite the thematic focus of his dissertation, published in 1993.
In his thesis, the historian argued that Nazi crimes had already been sufficiently addressed during the era of Chancellor Konrad Adenauer—namely in the early years of the Federal Republic—and claimed that anyone disputing this was paving the way for a “penitence mentality”.
He contended that trying to encourage the “broad masses of the population” to “come to terms with the past” amounted to “misguided public education”.
In 2008, under Kittel’s co-ordination, a “feasibility study” on the Nazi past of officials in refugee associations was conducted at the taxpayer-funded Munich Institute of Contemporary History (IfZ).
Regarding an SS-Obersturmfuehrer involved in mass atrocities, the author claimed that it could not be determined “whether he was inwardly a National Socialist”.
Poland viewed as “occupied East Prussia”
Under Kittel’s leadership, the Flight, Expulsion, Reconciliation Foundation generated headlines on several occasions.
In the summer of 2010, it emerged that both full and alternate members of the foundation’s board held openly revisionist views.
For instance, one board member had once described a trip to north-eastern Poland (“East Prussia”) as a “journey to an occupied country”.
An alternate member suggested in a newspaper article that Poland might bear some responsibility for World War II.
The article also argued that it was Great Britain that “turned the Battle of Danzig into a global conflict”.
Exaggeration of “German suffering”
In the autumn of 2014, the foundation under Kittel’s leadership caused a final scandal by opening an exhibition at the Deutsches Historisches Museum [German Historical Museum] in Berlin.
This exhibition served as a precursor project to the planned documentation centre focused on forced migration.
The exhibition not only disregarded Nazi mass crimes as the cause for the resettlement of German-speaking populations from Eastern and South-Eastern European countries, but it also drastically exaggerated the number of victims.
For example, the exhibition claimed that “more than two million Germans died during the forced expulsions from Poland, Bohemia, and East Prussia”.
In contrast, the German Historical Museum stated that “at most 600,000” people died during the resettlement processes between 1944 and 1947, a figure supported by scientific evidence.
Post-war German expulsions labelled “genocide”
At the time, the exhibition proved to be the final straw. Following years of protests from Polish and Czech historians, as well as the Central Council of Jews, whose representatives withdrew temporarily or permanently from the foundation’s governing bodies, Kittel was forced to resign from his post in late 2014.
Nevertheless, Kittel remained a prominent figure among representatives of displaced German communities.
Among other honours, he received the Human Rights Award from the Sudeten German Homeland Association in 2015.
He has repeatedly and openly advocated for classifying the resettlement of German-speaking populations in Eastern and South-Eastern Europe as “genocide”.
For some time, the historian has also commented more frequently on the policies of the Soviet Union and Russia.
For instance, writing in April 2025, Kittel argued that the resettlement process was supported by the Kremlin because it provided an opportunity to create “an overpopulated crisis hotspot in the heart of Central Europe” in post-war Germany.
In his view, displaced Germans from the East were intended to become a “source of unrest and social decay”, which constituted the “Russian imperial context” of the events.
Kittel stated that “Great Russian imperialism” existed long before Hitler and continued “to this day, even without Hitler”, such as in the form of the “ongoing war of annihilation” against Ukraine.
“Complicity” of the Soviet Union
Last week, Kittel went so far as to attribute “complicity” in World War II to the Soviet Union, thereby denying that Nazi Germany bore sole responsibility.
In a full-page article published in the FAZ, Kittel primarily cited historian Klaus Hildebrand.
Hildebrand had been accused of making “relativising” statements about National Socialism during the “Historians’ Dispute” (Historikerstreit) of 1986 and 1987.
According to Hildebrand, Soviet policy was dictated by the “need for war in Europe”.
Kittel wrote that through the German-Soviet Non-Aggression Pact of 23 August 1939, Moscow gave the German Reich the “green light”, “supported the German war effort”, and thereby enabled Hitler’s “almost instinctive disposition” towards war to “unfold destructively”.
In his personal assessment, Kittel concluded that “a deliberately acting Stalin” had made himself an “accomplice” as early as 1939.
This claim is directed at the country that suffered by far the greatest loss of life in the German war of annihilation, with approximately 27 million dead.
Kittel consistently defends the actions of the Western powers, from condoning the annexation of parts of Czechoslovakia in the Munich Agreement to refusing to co-operate with Moscow against the Nazi Reich.
Proposal for national memorial day against pact
Ultimately, Kittel attributes an “imbalance in the culture of remembrance” to the Federal Republic.
That is, he argues there is an imbalance between the “increasingly intense focus on the crimes of Nazi annihilation imperialism” on the one hand, and the “suppressed sins of more traditional territorial imperialism of the Tsarist or Stalinist type in Russia” on the other.
Kittel considers this an imbalance “with serious political consequences”. He notes that he “struggles to understand” why then Foreign Minister Heiko Maas insisted in May 2020 that “Germany alone unleashed the war against Poland in 1939” and therefore bore responsibility for World War II.
Kittel believes it is “‘more important than ever’ to demonstrate plainly and clearly Stalin’s complicity in the outbreak of the war in 1939 and the catastrophic, ongoing role of Russian imperialism”.
To advance his aim, Kittel wants 23 August to be declared a “national day of remembrance” in Germany as the “commemoration day of the Hitler-Stalin Pact”.
The European Parliament undertook a similar initiative in September 2019. At that time, it adopted a resolution calling for 23 August to be designated EU-wide as the “European Day of Remembrance for the Victims of Totalitarian Regimes”.
The resolution asserted, among other points, that World War II “broke out as an immediate result of the notorious non-aggression treaty between the National Socialist German Reich and the Soviet Union, also known as the Hitler-Stalin Pact”.
According to the European Parliament, these two states were “totalitarian regimes (…) pursuing the goal of world conquest to an equal degree”.
Europe
UK and Russia edge closer to conflict over long-range drone supply
The latest dangerous escalation in relations between the United Kingdom and Russia is raising concerns that the two countries are on the brink of war.
The United Kingdom has begun supplying Ukraine with long-range uncrewed aerial vehicles (UAVs) and has authorised their use in strikes against targets deep inside Russia.
Kyiv is deploying these uncrewed aircraft specifically to strike Russian oil refineries.
In response, Russian Foreign Minister Sergey Lavrov stated that Moscow would consider this as UK intervention in the war.
British Prime Minister Andy Burnham travelled to the Ukrainian capital, Kyiv, by overnight train on his first foreign visit. Attending the country’s independence day celebrations, Burnham handed over classified defence plans that pave the way for the production of long-range missiles in Ukraine.
In late 2024, the United Kingdom for the first time granted Ukraine permission to use British Storm Shadow cruise missiles to strike targets in the Russian heartland.
At that time, a Storm Shadow strike against the Kursk region was initially confirmed.
As The Sunday Times recently confirmed, London gave the green light to this decision in full knowledge that Moscow would regard Kyiv’s use of long-range Western weapons as crossing one of its “red lines”.
However, the availability of the Storm Shadow was considered limited, particularly due to its unit cost of over 750,000 British pounds. Furthermore, the cruise missile has a range of only about 250 kilometres.
This year, the United Kingdom took a step further and also began supplying Ukraine with long-range uncrewed aerial vehicles (UAVs).
These are now being used not only in strikes against the Donbas and Crimea, but also against regions deep inside Russia.
The Nyan model UAV, produced by BAE Systems subsidiary Callen-Lenz, was used in strikes against targets near Belgorod.
Another was used in attacks on oil refineries in Volgograd and Yaroslavl, located approximately 340 and 700 kilometres from the border, respectively. This model and its manufacturer have so far been kept secret.
In April, the British government announced that it would supply Ukraine with approximately 120,000 uncrewed aerial vehicles manufactured in the United Kingdom throughout 2026. How many of these are long-range weapons is unknown.
Russia could henceforth declare the factories where these weapons are manufactured to be “legitimate targets”. Indeed, the Russian government had already done so in April. At that time, Moscow stated that the production and delivery of long-range weapons would “gradually turn the countries concerned into Ukraine’s strategic rear”. Consequently, these countries would be “dragged into a war with Russia”.
One of the Kremlin’s responses was to recall its ambassador to the United Kingdom. Andrei Kelin, who served as Russia’s ambassador to the United Kingdom for more than seven years, left his diplomatic post on 21 July.
Moscow has not submitted any candidate to the Foreign Office to replace him, and embassy staff reportedly have no knowledge of when a successor will be appointed.
According to The Times, there are concerns that the absence of a replacement has effectively downgraded diplomatic relations between the two countries, prompting fears of a complete breakdown in communication between Moscow and London.
A Russian Embassy spokesperson stated that Kelin had made “significant efforts to preserve relations and communication channels” with the United Kingdom, accusing the London government of choosing the “path of confrontation” with Russia.
The spokesperson continued:
“He left Britain in the hope that if the United Kingdom reassesses its policies toward our country, a more constructive and respectful dialogue could ultimately be restored. In the meantime, a chargé d’affaires has assumed leadership of the embassy.”
On Sunday, the embassy in London maintained that the Kremlin had no intention of “downgrading the level of diplomatic relations between the two countries”, arguing that “the state of Russia-UK relations in all spheres has fallen to an unprecedented low entirely on London’s initiative”.
Kelin’s departure was announced internally a month earlier, on 11 June, during a party held at the embassy to celebrate Russia Day.
On the same day in Moscow, British Ambassador Nigel Casey, together with French and German representatives, held a rare meeting with the Russian Deputy Foreign Minister to “condemn the Kremlin’s aggression in Ukraine”.
A defence source speaking to The Times stated that no secret backchannels had been established between military representatives.
A senior diplomatic source said the severing of dialogue was extremely worrying:
“It is particularly important to maintain these channels of communication between hostile states. Communication and de-escalation are the only way to prevent potentially dangerous scenarios from turning into catastrophe.”
A national security source warned that the move could be a deliberate signal from Moscow after Britain’s leading role in supporting Ukraine provoked fury in the Kremlin.
“They are essentially saying ‘you don’t matter’, and frankly London and the UK no longer mean anything,” the source said.
John Foreman, the former British military attaché in Moscow, said that a gap between ambassadors was not unprecedented, but added:
“However, the embassy’s sharp statement this week and the major deterioration in bilateral relations since 2019, especially since the start of the war in Ukraine, make me wonder whether they will permanently degrade the quality of relations this time.”
The German government is also supporting the production of long-range uncrewed aerial vehicles in Germany and their delivery to Ukraine to enable strikes deep into Russian territory. It remains unclear whether such deliveries have already taken place.
German companies have not only begun producing uncrewed aerial vehicles for the Ukrainian armed forces at German facilities in cooperation with Ukrainian firms; they also argue that these vehicles are safe from Russian attacks within Germany’s borders.
Furthermore, German-American startup Auterion and Ukrainian uncrewed aerial vehicle manufacturer Airlogix are launching a joint venture to produce long-range uncrewed aerial vehicles at a facility near Munich.
A second factory will be built in eastern Germany. This is taking place at the explicit request of the government.
Defence Minister Boris Pistorius announced in September 2025 that Berlin would intensify its “support for Ukraine’s procurement of long-range uncrewed aerial vehicles”. Approximately 300 million euros will reportedly be allocated for this purpose.
Regarding the timeline, it was stated in April that the first shipment of long-range drones from the Munich area to Ukraine was planned to take place within several months. Whether this has occurred is not yet clear.
This question is of major importance; for if so, German-manufactured drones may have already struck targets in the Russian heartland. In that case, concerns will emerge that Germany has also become a party to the war.
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