As of: March 27, 2024, 11:17 a.m
By: Babett Gumbrecht
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The Green Economics Minister invites you to a meeting with high-ranking representatives of the weapons industry.
But they attach conditions to Habeck's desired upgrade.
Berlin - Vice Chancellor Robert Habeck is sticking to his plan to rearm Germany and is inviting representatives from the weapons industry to a meeting this Wednesday (March 27th).
It is “about a confidential exchange to strengthen security and defensive capabilities, the possibilities of the industry and the Ministry of Economic Affairs' options for action,” according to ministry circles, reports the
Handelsblatt.
But it won't be as easy as Habeck imagines working with companies like Rheinmetall or start-ups like Quantum-Systems.
Companies are demanding, among other things, greater planning security, accelerated approval procedures and better access to capital.
The planning security required by industry is failing due to the financial situation of the Federal Republic
The problem: The federal government wants to continue supporting Ukraine with weapons and ammunition and at the same time replenish the Bundeswehr's depots.
To achieve this, the industry must increase its capacity in order to be able to produce more weapons.
The industry, on the other hand, will only produce more if the state can guarantee that there are buyers for its products.
This demand is stated, for example, in a position paper from the Konrad Adenauer Foundation from December last year.
This is where the difficult financial situation of the Federal Republic comes into play.
This should also be known to representatives of the defense industry.
When asked whether more armaments meant that the federal government would have to make savings elsewhere, Habeck said last week (March 20) at the “Europe 2024” conference in Berlin: “That’s not necessarily what it means.” Many technical ones are like that Innovations in everyday life emerged from military research.
Military production also affects economic performance.
“But when they are built, they are there, the tanks or the missiles or the cyber security things.” It is to be hoped that military goods would only be used for training.
“And yet we still need them.
And that will have a price.
We have to be clear about this,” quoted the
German Press Agency (dpa)
.
Solution approach: Long-term framework agreements and higher national debt
Long-term framework agreements that the federal government has concluded for Iris-T guided missiles or Leopard 2 main battle tanks could be a solution for the required planning security.
But here too, a liquid federal government budget plays an important role.
Because calls from the framework agreements are only possible if there are the appropriate budget resources for them, writes the
Handelsblatt.
The federal government has concluded long-term framework contracts for the Leopard 2A4 main battle tanks.
© IMAGO / nordpool/Riediger
However, it is not Habeck who is responsible for the finances, but rather Finance Minister Christian Lindner (FDP).
This would have to ensure long-term financial planning.
Either through a second special fund or an increase in the regular defense budget.
At the “Europe 24” event, Habeck even spoke out in favor of slightly higher national debt.
“For the public sector to raise capital, it makes no difference whether we have 64 or 63 percent.” As a large country with strong economic performance, Germany doesn’t need that much money to boost production again and to support Ukraine, for example.
“It must be possible to create a certain dynamic somehow.”
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Disillusionment in the industry: Armaments is also dependent on export markets
For defense companies, however, increased investments in research, development and production are worthwhile, and not just because of higher Bundeswehr sales.
They rely on export markets.
The industry therefore expressly acknowledges that Habeck's State Secretary Sven Giegold facilitated the administration and approval processes for arms exports last September.
Disillusionment has now set in in the defense industry, which employs around 136,000 people in Germany alone and generates 30 billion euros in sales per year.
At the meeting on Wednesday (March 27), the industry does not want to immediately advocate for a war economy, but does want to promote a “resilience economy”.
(bg/dpa)