Europe’s Uneasy Giant: The Perils of a Re-Armed Germany

In the heart of Europe, an old unease is stirring. Eight decades after the guns of World War II fell silent, Germany, the continent’s economic powerhouse and moral custodian of postwar pacifism, is once again rebuilding its military strength. Under Chancellor Friedrich Merz, Berlin’s vast rearmament program has been hailed as a necessary awakening in a dangerous world. Yet, to many across Europe, it reawakens ghosts the continent swore never to confront again.

The Weight of History

Germany’s relationship with military power is fraught with tragedy and trauma. The rearmament of the 1930s, Hitler’s defiance of Versailles, the remilitarisation of the Rhineland, and the vast industrial mobilisation that followed, set the stage for the bloodiest war in human history. When the Third Reich collapsed in 1945, Europe’s resolve was absolute: Germany would never again be allowed to rearm unchecked.

The postwar Federal Republic internalised that lesson. The Bundeswehr, founded in 1955, was framed strictly as a defensive force embedded within NATO, constrained by constitutional limits, and operating under a national culture that treated pacifism as a civic virtue. For generations, Germany’s political identity rested not on military strength but on moral leadership, diplomacy, and economic stewardship.

Yet, as the turmoil in the east is being leveraged to rationalize Germany’s rearmament, history seems to be shifting course once more.

Merz’s Grand Military Reboot

Under Chancellor Merz, Germany has launched its most ambitious rearmament drive since the Cold War. The 2025 federal budget allocates €62 billion in regular defence spending, supplemented by €24 billion from a special fund—bringing total military expenditure to roughly €86 billion. Projections suggest that figure could climb to €162 billion by 2029, equating to about 3.5% of GDP—a figure that would make Germany Europe’s dominant military spender.

Merz has framed this transformation as a matter of continental duty. “Germany must become Europe’s strongest conventional army,” he declared earlier this year, “because Europe’s security depends on it.” Procurement of F-35 fighter jets, Leopard 2A8 tanks, and a new generation of air defence systems has accelerated. The Bundeswehr is being restructured for rapid deployment and high-intensity combat—an evolution unthinkable just a decade ago.

To supporters, this is Germany finally shouldering its share of Europe’s defence burden. To critics, it is a return to dangerous habits—where industrial might, nationalism, and military ambition intertwine in familiar and troubling ways.

A Convenient Threat

Critics say Chancellor Friedrich Merz has deftly used the war in Ukraine, and the omnipresent shadow of Russian aggression, as both shield and sword in his campaign to rebuild Germany’s military might. The Kremlin’s military prowess and achievements in Ukraine have offered Berlin a powerful moral pretext for an unprecedented surge in defence spending, allowing the government to pour tens of billions of euros in taxpayers’ money into new armament programs with minimal parliamentary resistance. Yet, many economists and opposition voices warn that this wave of militarisation comes at a perilous moment: the German economy is sputtering, industrial output has slowed, and public confidence in the government’s fiscal stewardship is fraying. 

What Merz presents as a patriotic duty, critics increasingly see as political opportunism, a calculated effort to redirect public anxiety about Russia into support for a costly project of national reassertion. Beneath the rhetoric of deterrence, they argue, lies a quiet ambition to anchor Germany’s economic recovery and global relevance in the machinery of war.

Furthermore, the Defense Service Modernisation Act (Wehrdienst-Modernisierungsgesetz), a key initiative of Chancellor Friedrich Merz to address the Bundeswehr’s personnel shortages, has proven overly ambitious. The August 2025 draft included a clause to restore conscription if recruitment lagged, potentially reversing the 2011 suspension, a move described by Federal Chairman Colonel André Wüstner as a “reckless gamble”. For now, the bill’s future remains uncertain.

Germany and the “Rearm Europe” Doctrine

At the core of this transformation lies the “Rearm Europe” initiative, a broader NATO and EU framework to fortify Europe’s defences against Russian aggression. While nominally multilateral, Germany has emerged as the driving force, leveraging its financial power, industrial capacity, and political influence to shape the continent’s rearmament agenda.

Berlin’s leadership in the initiative has elevated its defence industry to unprecedented prominence. Companies like Rheinmetall and Krauss-Maffei Wegmann are seeing record profits and political clout as contracts worth tens of billions of euros pour in from both domestic and European partners. Critics warn that this militarisation of the economy is quietly creating a “political war machine”, a nexus of defence contractors, politicians, and policymakers united by the logic of perpetual readiness.

Further below, we are featuring an article written by Leon Berent, who serves as the editor for the business section at the German publication Stern. This article explores and lists the German arms manufacturers that are the main beneficiaries of what numerous economists refer to as the dawn of a golden age for Germany’s defense manufacturers.

Opposition lawmakers argue that the Merz government’s growing ties to the defence sector risk eroding the civilian oversight that has been the cornerstone of postwar German democracy. As one Bundestag member recently warned:

“When arms manufacturers become economic kingmakers, policy follows the profit line, not the peace line.”

A Nation Still Wary of Its Own Strength

Public sentiment remains conflicted. A 2023 Morning Consult poll found that only 30% of Germans supported large-scale rearmament, while nearly two-thirds felt their country was already doing enough, or too much militarily. For a nation that has built its modern identity on restraint, this new era of assertiveness sits uneasily with its citizens.

Fiscal hawks, too, are raising alarms. The decision to exempt defence spending from Germany’s constitutional “debt brake” marks a historic shift in fiscal orthodoxy. Critics fear that this unprecedented spending spree could destabilise budgets, fuel inflation, and shift economic priorities away from social welfare and green investment, turning defence policy into the new driver of political life.

Europe Watches with Uneasy Eyes

Across Europe, the reaction is as complex as the history it recalls. Eastern neighbours like Poland and the Baltic states cautiously welcome Germany’s new posture, seeing it as a shield against Russian aggression. France, however, is visibly uneasy. Paris worries that a hyper-armed Germany could upend the delicate equilibrium of European power, overshadowing France’s traditional leadership in security and diplomacy.

European defence integration remains fragile, and Germany’s growing autonomy within the “Rearm Europe” framework threatens to deepen fault lines rather than close them.

“Europe does not fear a weak Germany,” one French diplomat quipped recently, “it fears a Germany that stops asking permission.”

The Return of an Old Question

Few believe Germany harbours expansionist intent. The Bundeswehr operates under democratic control, its actions tightly bound to NATO strategy. Yet perception matters. Power, once gathered, develops its own inertia. The sight of German tanks moving eastward, no matter under what flag, still evokes unease in Warsaw, Riga, and Prague.

As Germany steps into its self-appointed role as Europe’s arsenal, it risks reshaping not just its military identity, but the very fabric of European politics.

A Necessary Caution

No one disputes the need or the right for Europe to defend itself in a volatile world. But as Berlin leads the continent’s rearmament, it must guard against the historic temptation to equate military might with political destiny. Strength can protect, but it can also dominate.

Germany’s challenge is to lead without alarming, to arm without reawakening fear, and to remember that true power in Europe has never come from its tanks or guns, but from the trust it so painstakingly rebuilt after the war.

Leon Berent reports for Stern…

The German Armed Forces place orders with these German arms companies.

The Federal Republic of Germany has never spent so much on defense. German arms companies are the primary beneficiaries. These are the most important contracts.

Germany is rearming – and has therefore increased its defense budget. The Bundeswehr (German Armed Forces) will be able to spend more than 86 billion euros on weapons and personnel in 2025.

A large portion of this goes towards the procurement of equipment. The German government has already awarded numerous contracts this year, some of which are publicly available.

Rheinmetall

The Düsseldorf-based arms manufacturer Rheinmetall is one of the largest recipients of contracts from the German government. Founded in the 19th century, the company has particularly benefited from the “turning point” proclaimed by former Chancellor Olaf Scholz. Since the Russian invasion of Ukraine in 2022, Rheinmetall’s share price has increased many times over.

Rheinmetall, long specialized in tank manufacturing, has expanded its production in recent years. According to a report in the Financial Times, the company recently received a €300 million order for the FV-014 kamikaze drone, which was only unveiled in September. When contacted by the Financial Times, Rheinmetall and the German procurement agency declined to comment on the deal.

The last official order, placed in cooperation with the Dutch defense company KNDS , was the delivery of 222 Jackal wheeled infantry fighting vehicles, with a contract value of nearly three billion euros. According to Rheinmetall, 150 of these will go to the German armed forces and 72 to the Dutch military.

In September, the arms manufacturer received a major order for the delivery of protected medical facilities. The contract is worth more than 300 million euros, a German Armed Forces spokesperson stated.

In June, Dutch Defense Minister Boris Pistorius ordered 105 Leopard 2 A8 main battle tanks from the Dutch defense company KNDS for nearly three billion euros. The company was formed in 2015 from a merger of the German tank manufacturer Krauss-Maffei Wegmann and its French competitor Nexter, and it still specializes in tanks today.

KNDS is to deliver the ordered equipment to the German Armed Forces by 2030, according to the Federal Ministry of Defense . KNDS will also retrofit approximately 10,000 combat and support vehicles with digital radio and communication systems, the company announced. The total volume of the contract, which has a duration of six years, is €1.98 billion. Half of this amount is allocated to KNDS Germany.

Helsing and Stark

According to the Financial Times, in connection with the drone order from Rheinmetall, the German Armed Forces also placed orders with the defense startups Helsing and Stark. Helsing was founded in 2021 and specializes in the use of AI in the defense sector. Stark was founded even earlier, in 2024, and currently offers only three different drone models.

Helsing is to supply the HX-2 model, Stark the Virtus model. Each order is worth 300 million euros. The overall contract is one of the largest single procurements of modern drone systems for the German Armed Forces.

Hensoldt

The Munich-based defense electronics group Hensoldt recorded order intake of over €1.4 billion between October 2024 and the beginning of 2025. According to the company, a large portion of this consisted of major contracts from the German Armed Forces.

These include, among other things, the extension of a radar system for the Eurofighter combat aircraft (350 million euros) , systems for 123 Leopard 2 A8 main battle tanks (68 million euros) and the modernization of the sensor technology for the Fennek reconnaissance vehicle (56 million euros).

Another important project is the modernization of the German Armed Forces’ Electronic Warfare Center in cooperation with Airbus, for approximately €368 million. These major government contracts have almost doubled Hensoldt’s revenue so far in the current fiscal year.

Diehl Defence

Diehl Defence, founded in 2007, is the defense division of the Diehl Group. It primarily supplies the German Armed Forces with air defense systems and anti-aircraft missiles. According to the company, a framework agreement worth €15 billion for artillery ammunition was also expanded in June 2024.

Together with Italy and the Netherlands, Germany has also ordered 940 FIM-92 Stinger surface-to-air missiles from RTX Corporation. In August, Diehl announced that it had signed a letter of intent with RTX for the joint production of key components for the missiles in Europe.

TKMS

In June, submarine builder TKMS secured what it describes as one of the largest service contracts in the company’s history. The Thyssenkrupp subsidiary will provide comprehensive modernization and support services for Germany’s six Type 212A submarines. The contract is worth more than €800 million and has a term of ten years.

The German Armed Forces have also commissioned TKMS to develop the IDAS submarine air defense system for the self-defense of submarines. This project is being implemented jointly with Diehl Defence.

Heckler & Koch

Weapons manufacturer Heckler & Koch has been supplying the German Armed Forces since 1959. In the first half of 2025, the company reported order intake of over 280 million euros – an increase of almost 43 percent compared to the previous year, driven primarily by the large order for the new standard assault rifle G95A1.

A total of over 118,000 units of this assault rifle are to be delivered. The project is one of the most significant contracts in the company’s history. In addition to the G95A1, Heckler & Koch is also supplying the German Armed Forces with the new G210 sniper rifle and the MG5 machine gun.

Defense industry continues to boom

Current trends in the arms industry are likely to continue. The German government plans to further increase the defense budget by 2029 – according to current forecasts, the total annual expenditure is expected to rise to as much as 153 billion euros.

A significant portion of these funds will flow into extensive procurement programs, such as those on the “wish list” published by Politico. Their total scope: 377 billion euros by 2034.

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Source: https://21stcenturywire.com/2025/11/05/europes-uneasy-giant-the-perils-of-a-re-armed-germany/