Europe
Rheinmetall opens Germany’s largest ammunition factory amid rearmament push
German arms giant Rheinmetall is opening the country’s largest ammunition factory, which will also rank as the second-largest in Europe.
Rheinmetall has emerged as the biggest winner of the massive rearmament program launched by the federal government in 2022 and now being intensified on an unprecedented scale.
The company’s revenue rose from €6.4 billion in 2022 to €9.8 billion in 2024, according to CEO Armin Papperger, and could reach €40–50 billion by 2030. This trajectory would place Rheinmetall in the top tier of global defense manufacturers. By comparison, the world’s two largest defense companies, Lockheed Martin and RTX, generated defense revenues of about $61 billion and $41 billion respectively in 2023.
Earlier this month, Papperger declared that “Rheinmetall is on its way to becoming a global defense champion.” Under his leadership, the Düsseldorf-based arms manufacturer has seen a steady increase in order volume, which now stands at a record €63 billion.
The company’s civilian business, however, is struggling. Rheinmetall once maintained an automotive supply division to balance fluctuations in its defense operations. Some facilities previously used for civilian purposes have now been converted to military production, while non-military plants unsuitable for arms manufacturing are being considered for sale.
New plant to produce components for Leopard 2
The new facility in Unterlüß, Lower Saxony, officially opening on August 27, will be Rheinmetall’s largest site, employing around 3,200 people.
The group currently operates 174 plants in more than 30 countries with about 40,000 employees, a figure expected to rise to roughly 70,000 within the next two to three years.
At Unterlüß, Rheinmetall produces a wide range of munitions as well as key components for the Leopard 2 main battle tank, the Panzerhaubitze 2000 self-propelled howitzer, and the Puma infantry fighting vehicle. The site is also involved in developing the new Panther KF51 main battle tank, seen as the potential successor to the Leopard 2.
By the end of this year, the new factory is expected to produce tens of thousands of NATO-standard 155mm artillery shells. By 2027, annual output will reach about 350,000 shells—five times Rheinmetall’s total production in 2022, which stood at 70,000.
Unterlüß will be Rheinmetall’s second-largest ammunition plant. The largest, Rheinmetall Expal Munitions in Spain, can produce up to 450,000 shells annually. Supported by additional plants in Italy, South Africa, and the United States, the company aims to manufacture 1.5 million 155mm shells per year by 2027.
Expanding across Europe
To meet this goal, Rheinmetall is building new factories not only in Germany but also in other European countries.
Facilities in Hungary and Lithuania are scheduled to begin production in 2026. In addition, the company has announced over €1 billion in investments for new plants in Ukraine and Bulgaria, including Europe’s largest gunpowder factory.
Commenting on the scale of the munitions business, Papperger pointed out that NATO members are required to maintain a 30-day wartime ammunition reserve: “For just 30 days, we need about 300 rounds per weapon per day. With 5,000 weapons, that amounts to 45 million artillery shells.”
Beyond ammunition, Rheinmetall and the entire defense sector expect a significant rise in demand across European NATO countries following the alliance’s decision to dedicate 5% of output to defense. The steepest increase is anticipated in Germany, where large-scale rearmament is being financed by new debt. Papperger foresees an order potential of up to €300 billion by 2030.
Massive Bundeswehr budget whets industry appetite
The German government’s plans to substantially increase the military budget are already well known.
The Bundeswehr’s budget for this year has risen by about 20% to €62.4 billion, with an additional €24 billion from a special investment fund.
Plans for 2026 envisage €82.7 billion in spending, plus €25.5 billion from the “special fund.” In 2027, the last year in which the fund can be used, the budget is projected at €93.4 billion, rising to about €136.5 billion in 2028 and €152.8 billion in 2029. These figures exclude military infrastructure expenditures, expected to reach around €70 billion by 2029.
According to the current federal financial plan, total government spending will exceed €572 billion by 2029, with defense accounting for 26.7%. To finance this, net borrowing is expected to climb to €126.9 billion in 2029—more than 50% higher than in 2025.
Nevertheless, Finance Minister Lars Klingbeil has acknowledged major funding gaps: €34 billion in 2027, €64 billion in 2028, and €74 billion in 2029.
CDU-SPD push welfare cuts to fund militarization
In Berlin, debates are intensifying over dramatic social spending cuts needed to fund unprecedented rearmament.
Last weekend, Chancellor Friedrich Merz argued that “the welfare state as we know it today is no longer financially sustainable” and that sharp cuts—framed as “reforms”—are unavoidable. He added: “Talk of social cuts and sharp reductions does not bother me.”
CDU General Secretary Carsten Linnemann also called for a “paradigm shift,” claiming the welfare state had become unaffordable.
Within the governing coalition, there is widespread discussion of a coming “reform autumn.” SPD federal chairman and Vice Chancellor Lars Klingbeil has not fundamentally challenged the premise, insisting instead that the government must “address social security systems.” He stressed, however, that savings should not come only from welfare spending, calling for higher contributions from the wealthiest individuals.
State pressure grows against anti-war movements
While preparing “social cuts,” the federal government is also tightening pressure on those opposing billions in rearmament.
In Cologne, activists running an anti-war campaign under the slogan “Disarm Rheinmetall; against arms exports, militarization, and war” were forced to defend their right to assembly and protest after authorities sought to ban their camp.
Officials argued that the activists’ slogan “War against war” implied “combating militarization with militant methods.” The ban was eventually overturned by the Higher Administrative Court of North Rhine-Westphalia in Münster.
“War against War” is the title of a 1919 poem by writer and anti-war activist Kurt Tucholsky, who described the horrors of trench warfare (“blood, crushed bones, and filth”) and lamented the absence of resistance (“no one dares to rebel”). He concluded with a warning: “This cannot go on, and it must not go on. We have all seen where such madness leads.”
Europe
German officials urge fighter jet alliance with Sweden and Spain
German Defence Ministry officials have advised Berlin to form a new fighter jet partnership with Sweden and Spain rather than join an existing UK-led consortium.
Internal ministry assessment notes obtained by Politico state that a trilateral arrangement among Germany, Sweden, and Spain represents a “more advantageous and promising” approach than joining the Global Combat Air Programme (GCAP) run by the UK, Italy, and Japan.
The proposal outlined in the document does not yet represent a final government decision, nor does it contain any indication that German Defence Minister Boris Pistorius has approved the recommendation.
The advice was drafted after Germany’s flagship project with France to build a next-generation fighter jet collapsed in June following years of industrial infighting.
Initiated in 2017 and later joined by Spain, the Future Combat Air System (FCAS) was conceived as a showcase initiative for European defence cooperation. The partnership aimed to develop an aircraft to replace Germany’s Eurofighter fleet starting in 2040.
However, the initiative foundered on disputes over operational control and workshare between France-based Dassault and Germany-based Airbus Defence and Space. Following unsuccessful rescue attempts at the political level, Berlin withdrew from the joint fighter project this year.
UK Prime Minister Andy Burnham raised the prospect of Germany joining GCAP during an 8 October meeting in Berlin with Friedrich Merz. The two leaders agreed that officials should continue discussions.
For Berlin, the choice carries implications that reach far beyond which model its air force will fly. The decision will determine who controls future military technology, which countries secure production contracts, and whether a new European partnership can avoid the frictions that dismantled FCAS.
Ministry assessment keeps distance from UK-partnered GCAP project
The ministry assessment listed several reservations regarding the GCAP project. The report argued that the existing programme focuses on operations beyond Germany’s capability requirements, whereas Berlin needs an aircraft better suited for missions over continental Europe.
The document also noted that German manufacturers would struggle to secure a significant share of development and production work within an already established partnership.
Invoking past experiences with the Eurofighter programme, which was developed in the 1990s and entered service in the early 2000s, the document took direct aim at British defence contractor BAE Systems.
The German Defence Ministry assessment accused BAE Systems of prioritizing exports over the development interests of Germany and Italy, warning that British dominance would prove incompatible with an equal partnership.
By contrast, the document stated that the military requirements of Germany, Sweden, and Spain align closely and that their starting positions are well balanced.
The assessment proposed an industrial partnership between aerospace giant Airbus and Sweden’s Saab, while recommending that the Saab-manufactured Gripen E fighter jet serve as a technological stepping stone until the new aircraft is developed.
The German Defence Ministry declined to comment on the matter. A separate ministry note, however, recorded British efforts to integrate Germany into GCAP as an observer or participant, asking German officials to examine potential industrial roles and military requirements.
An Airbus spokesperson said the company was “generally open to cooperation”, provided that German and Spanish industry secured a “substantial and equal role” across development, production, and operational phases.
“Purely political decisions without an industrial foundation remain insufficient,” the spokesperson said, urging authorities in Berlin and Madrid to clarify the path forward swiftly.
In an interview published in Handelsblatt on Monday, Airbus defence chief Michael Schollhorn pointed to ties with Saab, noting that the two companies have always worked well together.
A Saab spokesperson also indicated that the company is receptive to broad defence cooperation, including in fighter aircraft.
Emphasizing that large-scale collaborative projects are handled at the political level and that participation decisions rest with the respective governments, the spokesperson said: “All questions regarding potential Swedish participation should be directed to the Swedish government. Saab stands ready, as always, to support Sweden’s future fighter aircraft requirements.”
Europe
EU reopens debate on naming envoy for Ukraine talks with Putin
The European Union has returned to the idea of appointing an envoy to hold talks on Ukraine with Russian President Vladimir Putin.
According to sources familiar with the matter who spoke to Politico, this search gained fresh momentum following a visit to Russia by Steve Witkoff, the US special envoy.
During his trip, Witkoff proposed to Putin that Russia, the US, and Ukraine hold trilateral talks.
European countries, meanwhile, fear that Washington could accept terms unfavourable to Kyiv in negotiations that exclude them.
Sources speaking to Politico said the names being discussed for the envoy role include European Commission President Ursula von der Leyen, European Council President António Costa, and EU High Representative for Foreign Affairs and Security Policy Kaja Kallas.
Some European diplomats believe Finnish President Alexander Stubb may be the most suitable candidate for the post.
Stubb’s good relations with Trump and Finland’s experience in dealing with Russia are cited among the factors setting him apart.
An unnamed EU diplomat described Stubb as the only European politician so far to have demonstrated senior-level leadership.
Another group of diplomats argues that Costa should lead the talks. European leaders asked Costa during last week’s EU summit in Brussels whether the time had come to speak with Putin.
Politico’s source recounted that exchange: “Costa said no, saying he would not speak to Putin right now. But if we want to play a role in the negotiations, Costa still needs to initiate dialogue with Putin.”
According to an assessment by another source, the European Council president could serve as a more neutral mediator than von der Leyen or Kallas, who are seen as overly focused on supporting Ukraine.
“Three or four people cannot go there with each of us speaking on behalf of the European Union,” one of the sources told the publication. “Ultimately, the choice of who represents the EU must be based on maximum efficiency, not on a personal power struggle or someone’s narcissistic ambitions.”
Politico previously reported in January that the EU was considering appointing a special representative for Ukraine negotiations. At the time, the initiative drew support from several European leaders, including French President Emmanuel Macron and Italian Prime Minister Giorgia Meloni.
Putin said he was ready to negotiate with European countries, but asserted that Europe had “no peace agenda” and stood “on the side of war”.
The Russian leader also named former German chancellor Gerhard Schröder as Moscow’s preferred negotiator from Europe.
Kallas ruled out such an appointment, noting that Schröder was “a lobbyist for Russian state companies” and would sit “on both sides of the negotiating table”.
Stubb details obstacles to talks and Oslo diplomatic drive
Finnish President Alexander Stubb said the principal obstacle to ending the war between Russia and Ukraine was the territorial issue.
Stubb took part in talks in Oslo with US envoy Steve Witkoff, who subsequently travelled to Saint Petersburg to meet Vladimir Putin.
As reported by the newspaper Helsingin Sanomat, Stubb stated that advancing the peace process required either bilateral talks between Russia and Ukraine or trilateral negotiations involving the US.
The Finnish president listed the other major items to be addressed within a settlement as US security guarantees for Ukraine and the construction of a new European security architecture after the war ends.
Without stating it outright, Stubb implied that the core issue within this framework was Ukraine’s NATO membership. The Finnish leader pointed to monitoring the ceasefire, establishing the line of contact, ensuring energy and food security, and exchanging prisoners as practical tasks.
Stubb also detailed the talks held in Oslo on 20 October, which included Witkoff, Ukrainian President Volodymyr Zelenskyy, and Norwegian Prime Minister Jonas Gahr Støre.
The discussions, which spanned approximately eight hours across various formats, had three objectives: to lower tensions in public discourse, to convey European and Ukrainian proposals to the US envoy before his visit to Russia, and to determine the next steps toward a peaceful settlement. Stubb announced that these goals had been achieved.
Moscow ready to resume trilateral talks in November
Witkoff met Putin in Saint Petersburg on Wednesday.
Following the meeting, Russian presidential aide Yuriy Ushakov announced that Moscow was prepared to resume trilateral negotiations with the US and Ukraine during the first half of November.
Ushakov also said that the EU and NATO had begun to “take a more serious approach” to Kremlin proposals on Ukraine, adding that “matters” were moving toward an end to the conflict.
Witkoff described the meeting as “constructive”.
Sources told Bloomberg in September that Putin continued to insist the Donetsk region must come fully under Russian control, expressing confidence that the territory would be captured within the next six months.
Putin previously set conditions for ending the war, demanding that Ukraine abandon plans to join NATO, maintain a neutral and non-nuclear status, and that anti-Russian sanctions be lifted.
Europe
Trump midterms calculus halts Israeli strike plan against Iran
A comprehensive military operation planned by the Israeli military for 10 October did not take place because US President Donald Trump chose to avoid a broad conflict before the 3 November congressional midterm elections.
Preparations had been made on the orders of Prime Minister Benjamin Netanyahu for an aerial bombardment meant to last several days, according to a report by the Financial Times citing sources familiar with the matter.
The list of targets included nuclear facilities and locations associated with the Iranian leadership, along with power stations and other civilian infrastructure sites.
The planned strikes were projected to exceed the joint operation launched by the US and Israel in February in terms of intensity.
White House Deputy Press Secretary Anna Kelly told the newspaper: “The United States is not going to strike Iran at any point before the midterms.”
Kelly argued that the administration in Tehran was in distress both economically and militarily, adding that the blockade imposed on Iranian ports and US efforts to secure oil shipments through the Strait of Hormuz were producing results.
Speaking to the newspaper, one source addressed the possibility of strikes resuming in the coming weeks, saying: “There’s either going to be a deal or a strike.”
The same source reported that Washington aims for a comprehensive settlement that resolves the conflict over both the Strait of Hormuz and the nuclear programme, although it remained unclear whether the US would have participated directly in the cancelled operation.
Another source said the preparations for the operation might have served as leverage to pressure Tehran in negotiations, adding that the final decision on any new military step rests with the US president.
Hegseth reviews updated target list in Israel
An Israeli official said US Secretary of War Pete Hegseth visited Israel on 19 October to meet with Netanyahu and senior representatives.
Another source stated that the Israeli side presented an updated target list to its American counterparts, compiled with fresh intelligence and incorporating civilian infrastructure sites that had not been struck earlier this year.
The Pentagon did not respond to questions regarding the meetings, while Netanyahu’s office and the Israeli military declined to comment.
Despite the postponement of the operation, Trump and Netanyahu continued to issue military warnings to Iran in public.
In a video released on 19 October, Netanyahu addressed Trump, saying: “Donald, you said we need to finish this, and we will finish it together.” Speaking on speakerphone, Trump responded: “You’re a great warrior, and we’re going to prove it very soon.”
These engagements between the leaders coincide with critical election cycles in both countries.
Parliamentary elections in Israel are scheduled for 27 October, one week before the vote in the US.
Most public opinion polls in the country show the opposition bloc holding a narrow lead over Netanyahu’s coalition, though neither side commands a clear majority.
Axios, a US-based news outlet, previously reported that the Pentagon instructed military planners to finalize strike plans against Iran, though the directive specified no date and Trump had not reached a final decision.
On 15 October, CNN reported on plans to use the GBU-43/B munition, known as the “mother of all bombs”, against Iranian nuclear facilities, with US officials who spoke to the broadcaster expressing scepticism about the weapon’s ability to destroy deep bunkers.
While Tehran announced that it remains open to a diplomatic solution, it declared that any potential operation would draw a fierce response.
Iranian Foreign Minister Abbas Araghchi stressed that if its adversaries chose military conflict, the response would be “much harsher than before”.
Following the joint operation launched by the US and Israel on 28 February, Iran retaliated by striking targets across the region and restricting maritime passage through the Strait of Hormuz.
Although the parties reached an agreement in June covering a ceasefire and negotiations to lift the blockade in the strait, reciprocal strikes between the US and Iran have not ceased.
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