Europe
German industrialists call for increased militarization ahead of elections

Ahead of the Bundestag elections on Sunday, economists, defense company representatives, and business association figures are calling on the next German government to decisively pursue the rearmament of the Bundeswehr and actively support the “militarization of German society.”
While the three leading sectors of the German economy—motor vehicles, mechanical engineering, and chemicals—are in crisis, the defense industry is already experiencing rapid growth. Economists estimate that increasing the military budget to 3.5% of the gross domestic product (GDP) could boost growth by up to 1.5%.
Amid discussions at the EU level of an arms financing package worth several hundred billion euros, Peter Leibinger, President of the Federation of German Industries (BDI), advocates for a “decisively strengthened” defense industry to become “part of a living security and defense social culture” in Germany in the future.
The new government coalition in Berlin after February 23 will, therefore, be immediately confronted with dramatic demands for armaments, including from the arms industry, granting arms manufacturers considerable influence.
Arms manufacturers are experiencing an order boom
Similar to other Western countries, Germany’s defense industry has been booming since the onset of the war in Ukraine.
However, three of Germany’s strongest sectors are facing severe crises: the automotive industry anticipates large-scale layoffs, mechanical engineering recorded a production decline of approximately 8% last year, and the chemical industry can only hope for a slight upturn, at best.
Nevertheless, arms manufacturer Rheinmetall, the largest German arms company after the German-French Airbus, has been consistently making headlines. Rheinmetall increased its turnover to almost 10 billion euros last year and expects to double this figure to around 20 billion euros by 2027. This projection aligns with the substantial order volume, which has recently surpassed 50 billion euros.
Other manufacturers of various combat equipment are also expanding, producing submarines, tanks, ammunition, drones, and air defense systems.
Rising stock markets
The defense industry boom has long been reflected in the stock markets. Rheinmetall shares recently surged by about 25% within a week, currently trading at around 900 euros. At the start of the war in Ukraine, the price was approximately 100 euros.
Shares of the French armaments group Thales rose by about 16% in the same week, while those of the Italian arms manufacturer Leonardo increased by around 18%. Medium-sized German defense companies like Hensoldt and Renk experienced even stronger growth, with increases of 29% and 34%, respectively.
Airbus achieved a modest increase of only 4%; the reason for this weaker growth is reportedly that the group derives “most of its turnover from civilian business, not armaments.”
Economists are pinning their hopes for growth on the arms trade
The sector is expected to continue its upward trajectory.
Moreover, economists increasingly view the armaments boom as a significant source of potential growth, given the persistent weakness in the main branches of German industry.
Economist Ethan Ilzetzki from the London School of Economics (LSE) predicts that if EU countries raise their military budgets to 3.5% of GDP and simultaneously purchase more weapons domestically, this could increase GDP by up to 1.5% annually.
EU-wide arms race
Increasing military budgets in Germany and across the EU has been planned for some time. Last year, the President of the European Commission, Ursula von der Leyen, stated that she considered additional spending totaling €500 billion over the next ten years to be inevitable.
German Foreign Minister Annalena Baerbock confirmed at the Munich Security Conference that the EU is developing a spending program akin to the “bailouts” during the euro and Covid-19 crises.
During these crises, sums of 500 to 700 billion euros were made available. Due to the parliamentary elections in Germany, information is still being withheld, but individual countries are taking action.
Danish Prime Minister Mette Frederiksen, for instance, announced that her country’s military budget should, in the future, be “closer to 5% of Danish GDP than 2%.”
French President Emmanuel Macron intends to invite all parliamentary group and party leaders to discuss increased military spending in the coming days. The European Commission is also preparing to suspend EU debt rules for defense spending.
German Finance Minister Jörg Kukies has also announced a similar change in German budget rules.
Arms dealing is no longer a ‘dirty business’
With the rapid armaments boom, the sector is gaining importance not only economically but also socially. Experts estimate the number of employees in defense companies to be over 100,000, and including employees in supplier companies and the broader security sector, the total is believed to be as high as 400,000.
This figure is only slightly lower than the number of employees in the chemical industry, estimated at 450,000. The defense industry is viewed as a promising source of employment for the large number of automotive industry employees expected to be laid off.
Simultaneously, employees of arms manufacturers contend that the war in Ukraine has significantly improved the sector’s reputation, which was long considered “a bit of a dirty business.” There are increasing calls for arms companies to break existing taboos.
In some universities, such as those in the German state of Bavaria, pressure is growing to ban existing “civilian” substances. Bettina Martin of the SPD, President of the Conference of Ministers of Science, recently stated that “it is unrealistic in the face of changing times to completely exclude research involving ‘dual use’.”
German industrialists desire militarization not only in industry but also in society
In this context, BDI President Peter Leibinger wants the defense industry not only to be accepted by society but also to be actively supported by it.
At an event preceding the Munich Security Conference, Leibinger called for a decisively strengthened defense industry to “become part of a living security and defense culture in society.”
The BDI leader asserted that the German government and Bundestag have a responsibility to “inform the public about the importance and urgency of defense capacities” and suggested allocating more funds to “initiatives that promote the need for rearmament.”
Citing the Marshall Plan after the Second World War, Leibinger noted that the US government had employed an “advertising campaign” to alleviate skepticism about the plan within American society.
Leibinger argued that Germany requires something similar today concerning “rearmament” and called for “winning over” society and “replacing the current passive approval with active participation of all.”
Europe
Merz urges Brussels to secure a US trade deal within days

German Chancellor Friedrich Merz is demanding that Brussels sign a trade deal with the US within days.
Bringing the issue to the agenda of today’s EU leaders’ summit, Merz described the European Commission’s negotiating strategy this week as “too complex.”
Calling for greater urgency and focus in negotiations with the US president, Merz said he would convey this demand to other EU leaders, alongside Emmanuel Macron and Giorgia Meloni.
The leaders are eagerly awaiting an update from the EU’s executive body during dinner on its talks with the Trump administration.
Concerns are growing that if Brussels and Washington fail to reach an agreement, “reciprocal” 50% tariffs will be imposed on all goods starting July 9.
The bloc, which had previously dismissed the recent UK-US trade deal—a pact that imposed a 10% baseline tariff while offering some relief for car and steel exports—is now coming to terms with the reality that securing a better outcome will be challenging.
“I still hope that a trading power like the EU, with its 450 million people, will have more leverage than the UK,” a senior EU diplomat said on Wednesday.
The German chancellor stated that the priority must be to protect Europe’s key industries—particularly Germany’s automotive, manufacturing, semiconductor, pharmaceutical, steel, and aluminum sectors—from the sector-specific tariffs that Trump has either imposed or threatened to impose.
However, Trump is heavily reliant on these tariffs, having implemented the highest rates since the Great Depression of the 1930s to compel manufacturers to move production to the US and close the nation’s trillion-dollar trade deficit.
The US trade deficit with the 27 EU member states reached a total of $232 billion in 2025, accounting for approximately 19% of the total figure.
Underpinning Merz’s demands is a persistent concern that Brussels might establish a broad framework centered on a flat 10% tariff for most common goods, rather than isolating sectoral tariffs on items like cars, which he argues harms German exporters.
Another EU diplomat noted that keeping a broad-based tariff in place was “not a task we gave the European Commission,” adding, “We hope the Commission will try to find a solution for the most at-risk sectors.”
Merz’s call to “get the job done” faces two primary obstacles. First, the EU negotiating team has warned that Washington will likely offer only minor concessions, such as limited tariff reductions tied to restrictive quotas, after which full tariff rates would apply.
This is a far cry from the zero-tariff agreement Merz had initially hoped to achieve and closely resembles the UK deal, the only one struck with Trump so far.
Meanwhile, negotiations with the US on Germany’s biggest demand—automobiles—are proving particularly difficult.
Merz and German automakers are pushing for a mechanism that would allow them to offset their vehicle imports into the US with models they export from their American production facilities.
Economy Minister Katharina Reiche presented such a proposal during her visit to the US earlier this month. Both BMW and Mercedes-Benz operate large factories in the US that produce certain models for global export. However, considering the EU exports over 750,000 vehicles to the US annually, it remains unclear how much relief a limited quota agreement would provide to car manufacturers if Trump rejects this proposal.
Brussels, on the other hand, is hopeful that Trump’s long-standing desire for the EU to align with US automotive regulations will serve as a strong enough bargaining chip to ease the pressure on the auto sector.
In a scoping paper sent to member states in May, the Commission revealed it had offered to align with US regulations on autonomous vehicles. This is seen as a major concession, especially after similar discussions on automotive reciprocity led to the collapse of a transatlantic trade deal a decade ago.
Europe
Germany plans to cut all funding for Mediterranean migrant rescue ships

The German government reportedly plans to cut all funding for groups that rescue migrants in distress while crossing the Mediterranean Sea.
According to the Foreign Ministry, the new budget plans from Finance Minister Lars Klingbeil do not allocate any funds for migrant rescue groups.
In recent years, the German government has provided these teams with approximately €2 million (about $2.3 million) annually. In the first half of 2025, around €900,000 in aid was provided to groups such as Sea-Eye, SOS Humanity, and Sant’Egidio.
Sea-Eye responded to the news with sharp criticism of the new German government.
“We are filling a gap in the Mediterranean that European countries, including Germany, should be closing,” said Gorden Isler, the group’s chairman, adding that without funding, Sea-Eye might be forced to cease its operations.
Jamila Schäfer, a member of parliament for the opposition Green Party, also criticized the decision, stating that cutting the funds will not reduce migration but will only make the routes more deadly.
In a statement to the German news agency dpa, Schäfer said, “We pay the fire department to save lives on land. We should not let people drown at sea either.”
The Mediterranean remains one of the world’s deadliest migration routes, despite patrols by sea rescue organizations.
According to the Missing Migrants Project, more than 32,000 people have gone missing while trying to reach Europe since 2014.
Rescue operations have become more challenging in recent years as the number of people embarking on dangerous routes continues to rise, while the Meloni government in Italy has enacted a law that severely restricts rescue operations.
Europe
Weber warns against US dominance, urges European self-confidence

Manfred Weber, the German conservative and president of the European People’s Party (EPP), the largest group in the European Parliament (EP), stated that while they seek an agreement with the United States, they will not allow a Trump administration to push them around.
In an interview with Euractiv, Weber discussed the recent NATO summit, the development of Europe’s own defense, relations with the US, and the EPP’s agreements with its right-wing counterparts in the European Parliament.
“The message that emerged at the end of this week is that we will continue transatlantic cooperation and that the NATO family will stay together,” Weber said. He noted that this is a new reality for them, but one that US President Donald Trump has pushed them toward, emphasizing that Europe needs its own defense foundation within NATO.
The EPP leader welcomed the implementation of certain measures, such as Europe’s armament fund, SAFE, and borrowing options for member states. “However, our current national armies are not capable of defending Europe. We need a European command chain and joint European projects like a missile defense system, a satellite program, a cyber brigade, and a drone army,” he explained.
Weber called for “building a European security architecture,” which he wants to be “fixed and irreversible” as a European structure. He proposed establishing it by ensuring countries participate in pan-European programs through the next EU budget.
“Because if, theoretically, a far-right candidate wins in France tomorrow, then this architecture will be locked down. We must build a defense infrastructure where no country can act selfishly,” Weber argued. “German Chancellor Friedrich Merz says Germany has the largest army in Europe. And then I see the AfD’s 22% poll numbers, and as a true European politician, that worries me.”
When reminded that the EU has been largely ineffective in influencing Israel and Iran in recent weeks, Weber responded, “Europe is turning into a kind of think tank. We are observers, but I want Europe to become a real diplomatic power.”
Weber, who hails from Germany’s CSU party, asserted that reforming the decision-making processes within the EU is necessary to achieve this. According to him, unanimity is the most critical issue on the table. If it cannot be changed under the current Lisbon Treaty, member states willing to move forward—such as France, Germany, Italy, and Spain—should do so.
The EPP leader stressed that the EU wants and needs a trade agreement with the US. “But, yes, Europe accounts for 22% of the global GDP, while America accounts for 25%. We cannot let Washington push us around. We are self-confident, and we must show it. We have the tools; the European Commission has the tools,” he declared.
Responding to criticism about collaborating with right-wing parties instead of liberals and socialists on laws related to the Green Deal, Weber said, “Look at the political reality in Europe: in Poland, Romania, and even Portugal, Chega came in second, ahead of the socialists. So I ask the socialists and Renew to please reconsider what is happening outside the Brussels bubble.”
Weber stated that the “authoritarian wave” in Europe must be stopped and argued that the EPP is the most important party capable of doing so.
The EPP leader noted that they would never support a regulation requiring prior approval for media advertising. He argued it was “madness” to talk about reducing bureaucracy while the legislation’s content requires companies like BMW or Renault to get pre-approval from state authorities to make green claims about reducing CO2 emissions.
According to Weber, the EPP’s three fundamental criteria are being “pro-Europe, pro-Ukraine, and pro-rule of law.” He claimed he was heavily attacked for blocking some laws related to the Green Deal and the nature restoration law because he genuinely believed they were wrong, and now they see it is not working. “I am saying we must hold our line but remain ambitious. What I am trying to do is not ride the wave of public opinion but to act responsibly and find a good middle ground. This is the best method against populists,” he concluded.
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