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
Nokia and ICEYE sign deal to build sovereign Ukraine satellite network
Nokia and space technology company ICEYE have signed a memorandum of understanding with Ukraine’s Ministry of Defence to establish a satellite communications network controlled directly by the Kyiv government.
A press release issued by Nokia noted that the parties will jointly assess the feasibility of implementing a Ukrainian-controlled communications system.
The agreement was announced on 22 October during the Finnish Prime Minister’s visit to Ukraine. The primary goal of the cooperation was described as bolstering the country’s defence capabilities, first and foremost by strengthening its independent satellite communications capacity.
Earlier in October, ICEYE and Nokia announced that they would jointly develop secure broadband communication systems operating in low Earth orbit for public institutions.
Designed for defence, border security, emergency services, and disaster response teams, these European-origin technologies are stated to allow states to directly own and independently operate their own satellites, ground infrastructure, and terminals.
In remarks on the matter, ICEYE Chief Executive Officer and Co-Founder Rafal Modrzewski stated that Ukraine requires secure, sovereign, and high-capacity satellite communications systems under its complete control.
Mikko Hautala, Nokia’s Director of Geopolitical and Government Relations and Chairman of the Nokia Defence Board, pointed out that satellite networks ensure the continuity of communications even when terrestrial transmission infrastructure suffers damage.
Hautala said that together with ICEYE, they will explore how reliable and sovereign satellite communications can enhance Ukraine’s resilience and provide the Kyiv government with control over communications on which it depends.
Based in Finland, space company ICEYE develops and manufactures radar satellites and makes data obtained from these satellites available for use.
According to information shared by the company, its technologies are used in defence and intelligence, as well as in environmental monitoring, insurance, and emergency response operations.
Reports indicating that restrictions had been placed on the US satellite connection used by the Ukrainian military surfaced just before this agreement.
In a post on the night of 14 October, former Ukrainian Defence Ministry Adviser Serhiy Sternenko stated that terminals were losing connection when travelling at speeds of 160 kilometres per hour, and that these disruptions later began occurring at speeds of 60 to 70 kilometres per hour as well.
SpaceX head Elon Musk maintained that the US government owns and manages Starshield, the military version of Starlink, and that restriction decisions were therefore taken by US authorities.
The White House, meanwhile, stated that it had nothing to do with the restrictions.
According to a 22 October report in The Wall Street Journal citing US officials, US President Donald Trump personally asked Musk to lift the restrictions in question.
Following the discussion, US and Ukrainian officials stated that the system began operating more stably, while some Ukrainian representatives said functionality had not yet fully returned to its previous state. Trump confirmed that Ukraine’s Starshield access had been restored.
The restrictions met with backlash across Europe.
Accusing Musk of playing political games, Polish Foreign Minister Radoslaw Sikorski posted on the X platform: “We are your European customers, we are watching you.”
Poland has purchased approximately 25,000 Starlink terminals for Ukraine since 2022 and continues to cover the satellite connection costs of the Armed Forces of Ukraine.
Following these developments, the European Commission also announced that Ukraine’s inclusion in the Govsatcom programme is under consideration.
Bringing together the existing satellite capacity of EU member states, the secure communications programme is planned by Brussels to be expanded with commercial services at the start of 2027.
Europe
Mélenchon’s “new France” vision triggers fierce cross-party debate
Following the unrest in France this month, the country finds itself split between Jean-Luc Mélenchon’s project of a “new France” and Marine Le Pen’s call for “law and order”.
Triggered alongside the student revolt, the question of national identity has moved to the centre of the presidential race.
“This is Mélenchon’s ‘new France’,” said National Rally (RN) leader Jordan Bardella and Identity and Freedom (ID) party leader Marion Maréchal Le Pen, linking the scenes of violence directly to the phrase.
According to several recent speeches by the leader of France Unbowed (LFI), “new France” signifies a country transformed positively by immigration, women’s rights, shifting family structures, social mobility, and the political demands of younger generations.
Mélenchon contends that this optimistic vision can become a reality if voters elect him president next year.
Two Frances to clash this weekend
Yet as the April 2027 elections draw closer, Mélenchon’s vision of a “new France” has turned into a recurring target for Marine Le Pen’s party, the RN, because it encapsulates a fundamental rift over French identity.
While Le Pen’s party draws on nostalgia for a revived nationalist past, Mélenchon’s vision of a “new France” envisages a clean break with the old order.
These two visions appear set for a direct collision this weekend. Le Pen will stage a gathering in Orléans before 10,000 supporters, which RN officials say will focus on authority, French identity, and public order.
Mélenchon’s party, LFI, is expected to join demonstrations against the RN alongside other left-wing forces and trade unions in the historic French town associated with Joan of Arc, which Le Pen treats as a nationalist symbol.
Echoes of Sartre in “new France”: Change over essentialism
Defending the concept of “new France” against its critics, LFI argues that it cannot be understood without reading a little of the philosopher Jean-Paul Sartre and grasping the legacy accumulated from the left’s long ideological battles.
From a Sartrean perspective, “new France” is not a fixed, essentialist identity, but a fluid, changing reality.
Rather than declaring “this is who we are”, this outlook is grounded in “this is what we live through”, describing the varied realities confronted by precarious workers, women, people of non-French origin, and young voters.
According to this view, their lived experiences fit neither the right’s nor the left’s traditional national representations.
Mélenchon identifies women as the face of the “new France”. This category also encompasses blended families, young people, LGBT rights, long-distance commuters, and French citizens whose ancestors were born abroad.
Broadsides from the right, criticism from the left
Although he has used the phrase for years, pollsters note that it has become increasingly prominent as identity politics has come to occupy a larger share of his campaigning.
For critics across the political spectrum, “new France” implies casting “old France” aside.
Conservative Bruno Retailleau, for example, describes it as “the end of France”.
Former LFI ally François Ruffin criticises Mélenchon from the left. In Ruffin’s view, the LFI leader is trading class-based political appeal for an appeal directed at diverse urban electorates, sacrificing working-class towns and deindustrialised regions in the process.
Others dismiss the phrase as a slogan fabricated to drive polarisation across every cultural fault line.
Promoting the concept in May ahead of the French municipal elections, Mélenchon said: “The new France is not one part of France set against another; it is the whole of France.”
A month later, he noted that crowds at his rallies chanted “On est chez nous!” or “This is our home!”
Usually associated with far-right gatherings through the variant “France belongs to us”, the slogan, according to Rapporteur, offers a simpler expression of what the two camps are actually contesting: who gets to define French identity, and who feels at home in France.
Europe
EU unveils Arctic plan targeting military corridors and resources
The EU is developing plans to enhance its military mobility in the Arctic and aims to establish “multimodal military movement corridors” across the High North.
According to a report by German Foreign Policy, this initiative was outlined in the EU’s new Arctic strategy presented by the European Commission in Brussels on Tuesday.
Under the strategy, a complex logistics network consisting of “ports, airports, and their inland connections” will be created across the Arctic, designed to “remain operational even under adverse weather conditions.”
The strategy paper also announces that “exercises or stress tests” will be conducted to ensure the smooth deployment of military forces and capabilities to the Arctic.
Through this strategy, the EU is responding to the reality that climate change-driven Arctic ice melt is facilitating access to regional natural resources while opening new sea routes, such as the Northeast and Northwest Passages, which can now be used for both commercial and military operations.
The Arctic strategy aims for greater independence from the US and envisages laying a “pan-Arctic” submarine cable running from Europe through the polar region to East Asia.
Arctic natural resources
The EU’s new Arctic strategy addresses, among other topics, the natural resources located in the Arctic, both beneath the seabed and on land.
Due to thawing ice, these resources are already accessible or will soon become easier to reach, and Brussels supports their extraction.
Specific projects highlighted include a rare earth element extraction venture near Kiruna in northernmost Sweden and a plan to mine molybdenum in eastern Greenland.
Departing from its previous 2021 Arctic strategy, the Commission no longer advocates an outright ban on oil, gas, and coal extraction in the Arctic within a multilateral framework.
This policy shift comes as Norway has emerged as the bloc’s most vital natural gas supplier, providing approximately 30% of all its natural gas imports following the EU’s phased reduction of Russian energy imports.
However, production from Norway’s existing fields is expected to decline in the 2030s. Consequently, Norway plans to explore new deposits in the Barents Sea, where vast reserves are estimated to lie.
Dependent on raw material supplies from Norway as well as strategic cooperation with Oslo, the EU no longer opposes these exploration plans.
New sea routes opened by melting ice
The EU is also turning its attention to the gradual opening of new Arctic shipping routes.
For instance, the Northeast Passage, running along Russia’s northern coastline from East Asia to Europe, is now open to navigation between August and October.
This route is considerably shorter than the conventional transit via the Indian Ocean, significantly reducing shipping costs, especially in light of current oil prices.
A Chinese shipping firm launched regular services via the Northeast Passage this summer, while a South Korean vessel recently returned to the port of Busan after completing its maiden commercial voyage along the corridor.
Although used by few vessels to date, the Northwest Passage has also come into operation as a route extending from the North Atlantic through Canada’s northern archipelago and north of Alaska toward East Asia.
Experts believe that, during the summer months, this passage could offer advantages over the traditional route via the Panama Canal “for certain vessel types and transport routes.”
The emergence of new military capabilities was underscored in September when four Russian warships navigated the Shokalsky Strait between two Russian Arctic islands for the first time in history.
Military mobility in the High North
This development represents another driver behind the EU’s new Arctic Strategy placing particular emphasis on military aspects.
Russia has been strengthening its Arctic military positions for some time, partly because the headquarters of its Northern Fleet, which hosts part of its second-strike capability, is located on its north-western coast, and partly because its exceptionally long northern coastline remains strategically vulnerable.
NATO has likewise been expanding its activities in the Arctic considerably, holding numerous exercises across northern Finland, Sweden, and Norway, as well as in Iceland and Greenland, alongside its new “Operation Arctic Sentry.”
The strategy document states that the EU must now strengthen its own posture in the Arctic.
This objective is to be pursued both in cooperation with NATO and through independent EU measures.
For example, situational awareness must be enhanced, including by leveraging EU satellite systems, particularly Copernicus and Galileo.
Additionally, the planned IRIS2 satellite constellation, conceived as Europe’s counterpart to Starlink, should be expanded to cover the Arctic to improve communications.
To coordinate these initiatives, the EU plans to establish a Maritime Security Centre.
The EU places special emphasis on military mobility in the Arctic. According to the document, rapid and large-scale troop deployments must be feasible in the region at any time if required.
To this end, “multimodal military movement corridors” incorporating ports, airports, and their inland connections need to be established.
These facilities will be designed as a unified, complex logistics system “capable of remaining operational even under adverse weather conditions.”
Realising this plan will require preparation for “ice clearance,” “the handling of heavy and oversized military vehicles on frozen ground,” and “the rapid repair of damaged infrastructure.”
Looking ahead, the EU is urged to organize “exercises or stress tests focused on the smooth deployment of forces and military capabilities to and within the Arctic” in cooperation with NATO or like-minded partners.
Viewing these capabilities as vital for “credible deterrence,” the EU also underscores the need for its own icebreaker fleet to clear pathways through the ice for warships.
The Arctic’s role in “strategic autonomy” vis-a-vis the US
Throughout this process, the EU is not only adopting a clear stance toward Russia, but is also pursuing greater independence from the US.
On one hand, the strategy encourages deepening ties with Greenland, which is part of Denmark, does not belong to the EU, and has faced threats of US annexation. The document designates this relationship as a cornerstone of the new Arctic strategy.
On the other hand, the text calls for intensifying cooperation as part of a “Northern Neighbourhood” strategy with Norway, Iceland, and Canada, as well as with the UK, which occupies a strategically advantageous position despite not being an Arctic coastal state.
The EU maintains a security and defence dialogue with Norway, holding its fifth session this past April, alongside launching an “Arctic Dialogue” with Oslo this year.
Canada is classified by the European Commission as a “natural ally” in the Arctic. Observers note that while Canada is mentioned dozens of times throughout the strategy, the US is cited only a handful of times.
This contrast is seen as evidence that the EU is seeking independence from Washington in the High North.
Accordingly, the document explicitly references “European strategic autonomy” as an “integral component of the Arctic.”
Pan-Arctic cable plan extending to Japan
The EU Arctic Strategy also identifies Japan and South Korea as cooperation partners in the region.
This partnership is linked to plans to connect Greenland to the EU via a submarine cable, which would subsequently be extended across the Bering Strait to Japan and South Korea.
Berlin has advocated the construction of such a “pan-Arctic cable” for some time.
According to a statement issued in early July by the Berlin-based German Institute for International and Security Affairs (SWP), such an infrastructure project is highly desirable for multiple reasons.
First, data traffic between Europe and Asia, 90% of which currently passes through the Red Sea and the strait between Djibouti and Yemen (Bab el-Mandeb), “suffers from a high failure rate and a lack of redundancy.”
Furthermore, the Arctic route is “significantly shorter,” resulting in reduced latency and fewer transmission delays.
International equity trading in particular stands to benefit from “real-time data transmission” enabled by a new polar cable link.
SWP outlines two potential routes for the cable: one running west of Greenland and the other running east.
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