Golden age for the German arms industry

According to Sueddeutsche Zeitung (SZ), the majority of funds Germany spends on defense procurement go to domestic companies. The surge in defense spending followed Russia’s full-scale invasion of Ukraine in February 2022. The information published by SZ is based on publicly available sources and may not cover all expenditures, as many aspects of Germany’s defense policy remain classified. In 2025, Germany allocated approximately €100 billion to defence, whereas in 2021 the budget was half that amount.

“However, these expenditures include not only the purchase of tanks and rifles but also the maintenance of barracks and personnel costs. Until Russia’s invasion, these were the largest components of the budget,” SZ reports. Only after 2022 a special fund was established to finance the purchase of weapons, tanks, aircraft, and defense software.

Of the roughly €170 billion in recorded expenditures for 2020–2025, about €109 billion went to companies in Germany, while €41 billion went to foreign firms. No detailed information was provided regarding the remaining expenditures. Some production related to foreign purchases takes place in Germany. SZ cites the example of missile production for the Patriot systems, part of which is carried out by the German defense company MBDA.

When it comes to foreign procurement, Germany buys the most from the United States. Israel ranks second, with orders for Arrow 3 missile defense systems worth around €4 billion. Next is the Netherlands, from which Germany ordered frigates valued at €3.5 billion.

Since February 2022, German arms exports have increased by nearly 50 percent. Germany is now the world’s fourth-largest arms exporter, after the United States, France, and China.

Shares of German defense companies such as Rheinmetall, Hensoldt, and Renk have surged, with Rheinmetall’s stock rising several dozen times in value. Germany’s position in the global defense market has grown significantly in recent years. Along with Germany’s standing, the position of the European Union as a whole has also strengthened. This is particularly important in the context of the shifting global and regional political landscape, which demands adaptation and the development of independent military capabilities.