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
Mutual accusations of blackmail and assault overshadow AfD state election congress in Germany
The Alternative for Germany (AfD) state congress in North Rhine-Westphalia ended in chaos on Sunday.
During the selection of the 22nd position on the candidate list for next year’s state elections, delegates aligned with the far-right Bundestag member Matthias Helferich proposed more than 100 candidates. This move was reportedly designed to block the vote in the town of Marl, halting progress on the list to force negotiations for subsequent positions.
Earlier in the candidate selection process, supporters of State Co-Chairman and lead candidate Martin Vincentz, who represents the moderate wing of the party, had prevailed. The defeat of Zacharias Schalley—a figure close to Helferich—by a candidate from the Vincentz camp triggered significant discontent within the radical wing of the party. Representing approximately 40% of the delegates, Helferich’s supporters reportedly demanded strong representation in the next state parliamentary group.
During the congress, Helferich claimed that Bundestag member Knuth Meyer-Soltau, a member of the Vincentz camp, physically assaulted him. Speaking to the newspaper WELT on Sunday, the 37-year-old Helferich described the incident:
“Meyer-Soltau was passing by the row where I was sitting. He was arguing with another member. When he turned back, while I was sitting in my chair, he shouldered me and shouted, ‘Shut up, you idiot!'”
Helferich added: “I do not know if he wanted to knock me out of my chair. However, because he insulted me in anger, I cannot rule out the possibility that this was a deliberate attack.”
An email exchange sent to the federal executive board and state management revealed that Helferich filed a criminal complaint on Monday.
“Meyer-Soltau hit my chair and my body, either intentionally or through negligence”
In the complaint filed by Helferich, he stated: “Meyer-Soltau hit my chair and my upper body hard, either intentionally or through negligence; I was only able to avoid falling by holding onto the edge of the table.” The complaint also named two witnesses.
In his letter to the party leadership, Helferich wrote: “Since numerous similar incidents of electoral law significance occurred at the state election congress, I believe the duty to maintain party order falls to the Federal Executive Board.”
Meyer-Soltau, a 61-year-old lawyer like Helferich, denied the allegations. Speaking to WELT on Sunday, the lawmaker said: “I reject the accusation being made.”
Meyer-Soltau suggested that Helferich viewed him as a powerful opponent because he had previously acted as the negotiator for the state executive board in the party’s expulsion proceedings against Helferich before the Federal Arbitration Court. The party court recently rejected the expulsion request.
“It is clear that this situation has not had a positive impact on our relationship,” Meyer-Soltau said. “Mr. Helferich, having suffered a heavy defeat at the nomination meeting, is clearly seeking satisfaction through other means. I will hand the matter over to my lawyer and take legal action.”
A letter sent to Helferich by Meyer-Soltau’s lawyer, which was leaked to the press, stated: “My client has never insulted you or physically assaulted you.” The letter demanded that Helferich cease repeating the claim and sign a cease-and-desist declaration carrying a contractual penalty.
Additionally, Meyer-Soltau’s lawyer filed a criminal complaint with the Dortmund Prosecutor’s Office for defamation. The petition submitted to the prosecutor’s office stated: “The accusation of physical assault is highly defamatory, calculated to permanently damage my client’s public reputation, and socially discredit him.”
Allegations of blackmail made against delegates at the congress
Allegations of threats against delegates also emerged at the state congress in Marl. Helferich ran against Klaus Esser, a close associate of Vincentz, for the 13th position on the candidate list. Esser, who needed just one vote to be elected in the first round, only secured a majority in the second round of voting.
Following the announcement of the results, a delegate took the stage to claim that before the second round, a state executive board member from the Vincentz camp went to the rows of the Wuppertal district association and threatened that a state lawmaker from Wuppertal would be expelled from the parliamentary group if the necessary votes for Esser were not delivered. The delegate announced that a complaint would be filed regarding the matter.
A spokesperson for AfD Co-Leader Alice Weidel told the media outlet “The Pioneer”: “Weidel does not approve of this situation. Such things must not happen.”
Other allegations of threats were voiced through the hall microphones during the congress. One delegate claimed that a candidate had been threatened by a district councilor and a district chairman.
“He was told that if he did not withdraw his candidacy, he would have no future in this party. There are numerous witnesses who can confirm this,” the delegate asserted.
Another delegate reported that a young woman was pressured by a district chairman who asked whether she would “lend herself to this game and submit to blackmail,” warning her that the situation would have “consequences for her in the district association.”
Marco Vogt, the Deputy Chairman of the Düsseldorf AfD and an ally of Helferich, said during his candidacy speech that young members who participated in the list disruptions had been threatened by their employers present in the hall.
Another candidate, a municipal councilor from Würselen, stated that a district administrator from the Aachen region had issued an implicit threat, telling him he would make many enemies in his own association if he did not withdraw his candidacy.
Candidate Leon Biallawons directly targeted lawmaker Knuth Meyer-Soltau, saying: “I tell you clearly, dear Knuth, I will not allow myself to be threatened by you. Because, dear Knuth, it is not you but the grassroots who will decide who succeeds in this party, and the grassroots will assert their will in the long term.”
Meyer-Soltau declined to comment on these allegations, stating: “I do not wish to comment on such baseless claims.”
Other tactics were used to slow down the proceedings at Sunday’s congress. One delegate requested a 30-minute recess because “there is an ice cream truck outside,” though this request was rejected. The convention manager, Julian Flak, was heard calling out to a delegate: “Take that garden furniture outside immediately!”
A message shared on Saturday in a chat group close to Vincentz stated that the “self-proclaimed patriotic group” had threatened to completely block the congress. It was alleged that the core group led by Helferich planned to deliberately disrupt the flow of the congress to force their opponents to the negotiating table.
Weidel accused of undermining efforts in chat group
On Sunday, in the same chat group, it was written that the sabotage action was being coordinated by Federal Deputy Chairman Sven Tritschler and Helferich. The message claimed that Tritschler had discussed the move with “his boss Alice Merkel”—a reference to AfD leader Alice Weidel. “This is a clear operation of attrition. We will not bow to an Alice Merkel,” the message read.
By Monday night, the ballot for the 22nd list position contained the names of 81 candidates. Some individuals who announced their candidacies withdrew before speaking. The results are expected to be announced next weekend.
The North Rhine-Westphalia AfD association has allocated a total of four weekends for candidate selection meetings. With the party projected by public opinion polls to win between 30 and 40 seats in the state parliament, competition for the top spots on the list remains intense.
An article titled “AfD-NRW Grassroots Resist Cartel Partyization,” published Monday on a Telegram channel close to Helferich, described the events as a “heroic act” and an “impressive reaction of an alert, idealistic grassroots.” The mass candidacy process was characterized as a “combination of Carl Schmitt’s partisan theory with a democratic liberation move unprecedented in AfD history.”
The article argued that if lead candidate Vincentz wants to translate polling success into a strong election result, he must unify the party by granting Helferich’s supporters viable, electable positions on the list.
Europe
EIB to unveil 15 billion euro tech initiative to scale European startups
The European Investment Bank (EIB) will announce a €15 billion initiative today, in collaboration with EU capitals and private investors, aimed at supporting the growth of European technology companies.
For decades, startups on the continent have struggled to raise the large-scale funding rounds necessary to scale on this side of the Atlantic, frequently turning to US investors or relocating abroad as they expand.
“We are catching up. Now we need to accelerate,” EIB President Nadia Calviño said.
Under the existing European Tech Champions Initiative, the EIB had already pooled resources with six EU governments to establish funds that invest in high-growth companies across the EU.
Calviño described the initiative as “very successful,” noting that it has supported 12 European “unicorn” companies valued at over $1 billion, including the German artificial intelligence translation firm DeepL.
The bank is now expanding the program with a new phase nearly four times the size of the original.
Twenty-five EU governments, alongside private investors such as Santander and Danske Bank, are expected to participate in the program.
This initial €15 billion aims to mobilize up to €80 billion in total investment. Calviño stated that this estimate is based on the multiplier effects achieved under previous programs.
As part of these efforts, the EIB also aims to attract European pension funds, which manage immense pools of capital but have historically allocated fewer resources to technology investments compared to their US counterparts.
In addition to the new funding, Calviño noted that the EIB will create a platform providing a single point of access for existing European scale-up initiatives, including the European Commission’s Scaleup Europe Fund, France’s Tibi initiative, and Germany’s Win initiative.
Europe
Germany to purchase US Tomahawk missiles to build own long-range strike capability
Germany will purchase Tomahawk cruise missiles from the United States and deploy them on German territory, Chancellor Friedrich Merz announced on Thursday.
The move marks a shift away from planned US deployments and toward Germany establishing its own long-range strike capability.
Merz told lawmakers that he finalized the agreement with the US government during the NATO summit in Ankara, adding that the talks held on Tuesday and Wednesday had exceeded his expectations.
“While we close a critical strategic gap in our defense, we are also working to develop our own European systems and deploy them in Europe,” the Chancellor said.
According to German government sources, Washington committed in a letter of intent signed on Tuesday to approve Germany’s acquisition of Tomahawk missiles and their land-based Typhon launchers in August.
The number of missiles and launchers Germany plans to purchase was not disclosed because the information is classified.
The planned acquisition appears aligned with US President Donald Trump’s pressure on European allies to cover their own security costs, such as by purchasing US weapons.
The fate of the Tomahawk procurement had become uncertain after Trump announced in May that he would reduce the US military presence in Germany.
That development was seen as a cancellation of a plan made under the previous administration to deploy a US battalion equipped with long-range Tomahawk missiles to Germany.
That original plan was designed as a temporary solution to serve as a strong deterrent against Russia while Europeans developed their own versions of such weapons.
Germany produces its own cruise missile, the Taurus, but its range of approximately 311 miles is three to five times shorter than that of the Tomahawk missiles.
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