Germany’s largest arms company, , said on Wednesday that plans by European countries to massively raise their spending on defense were an unprecedented opportunity for its growth.
European capitals have announced in recent weeks that they as the US under President seems to be possibly abandoning its long commitment to the security of the continent.
What did Rheinmetall say?
The German firm said that it expected a substantial increase in demand for its products.
“An era of rearmament has begun in Europe that will demand a lot from all of us,” Rheinmetall CEO Armin Papperger said in a statement accompanying the publication of the group’s annual results.
The planned development opened up “growth prospects for the coming years that we have never experienced before,” Papperger said.
Rheinmetall said it expects overall sales to grow by 25% to 30% in 2025 amid and the gradual withdrawal of the US from Europe’s defense capabilities.
It estimated that defense sales would grow between 35% and 40% this year but said this estimate did not “take into account the improvement in market potential … as a result of the geopolitical developments in recent weeks”.
Rheinmetall is “on its way from being a European systems supplier to a global champion,” Papperger said.
What are Germany and Europe planning on defense?
Germany’s likely next chancellor, , of the , with his prospective coalition partners, the , has proposed freeing defense spending from the constitutional spending limits otherwise imposed.
If the reform to the so-called debt brake is passed, Germany could spend tens of billions of euros more on the military annually as it seeks to bring its defense sector up to scratch.
Other European leaders have also pledged to up their countries’ defense spending and amid growing doubts about the US’ reliability as a defense partner.
The European Commission wants to mobilize up to €800 billion ($863 billion) for European defense.
That includes a plan to borrow up to €150 billion to lend to national governments.
Edited by: Saim Dušan Inayatullah
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