Michalis Psilos • psilosm@naftemporiki.gr
The German government is considering buying up to 2,500 GTK Boxer armored vehicles and up to 1,000 Leopard 2 tanks.
Europe is rearming to confront the "Russian threat," and Germany is taking a leading role in this new surge in military spending. The government of Friedrich Merz is set to approve military expenditures totaling half a trillion euros—about five times the special fund initiated by the previous government of Olaf Scholz three years ago, which was heralded as a significant turning point, as emphasized by European diplomats.
In addition, the hundreds of billions allocated for infrastructure projects are regarded as "investments in political defense and upgrades to military infrastructure," according to Clemens Fuest, the president of Ifo, in the Frankfurter Allgemeine Zeitung.
While future conflicts are expected to increasingly depend on artificial intelligence and drones, it is noteworthy that Germany plans to invest around 25 billion euros in new battle tanks, as reported by Bloomberg. The German government is contemplating the purchase of up to 2,500 GTK Boxer armored vehicles and up to 1,000 Leopard 2 battle tanks. These armored vehicles and battle tanks are intended to equip seven brigades that Germany aims to contribute to NATO over the next decade, with Rheinmetall and KDNS (a merger of Krauss-Maffei Wegmann and Nexter) as the manufacturers.
Defense Industries Takeoff
Although the order will be finalized in the coming months, the stocks of two defense giants have soared on the Frankfurt Stock Exchange. Defense experts estimate that the substantial German order for battle tanks could significantly exceed the 25 billion euros calculated by Bloomberg, potentially reaching between 60 billion and 75 billion euros, just for the battle tanks.According to Bloomberg, "German battle tank manufacturers will actually need to multiply their production to meet delivery schedules."
Krauss-Maffei Wegmann currently produces only three to four Leopard 2 battle tanks each month, as reported by European Security & Technology (ESUT). At this pace, it would take 21 to 28 years to manufacture 1,000 Leopard 2 tanks. To fulfill orders within five years, production would need to ramp up to at least 200 battle tanks annually.
As a result, defense industries are eager to expand, acquiring "political" factories to convert them into military production facilities, while traditional car manufacturers are also following suit.
Germany is not only planning to order battle tanks but is also preparing for a significant expansion of its air defense capabilities. According to the magazine Hartpunkt, the Bundeswehr requires between 500 and 600 battle tanks equipped with Skyranger anti-aircraft guns.
The initial procurement contract reveals the financial scale of this initiative: 19 Skyranger systems cost a total of 595 million euros, which breaks down to approximately 31.3 million euros per anti-aircraft system, utilizing the Boxer armored vehicle as the platform.
Under Germany's leadership, KNDS and Rheinmetall are collaborating with partners from 11 countries to develop a new European battle tank.
France is also working with Germany on the competitive MGCS (Main Ground Combat System) project.
Poland is at the forefront of a surge in tank procurement in Europe. The country has recently completed a deal to acquire 180 South Korean K2 battle tanks for six billion dollars, as reported by Military Watch magazine. At an average cost of 33.3 million dollars per tank, Poland is spending more than Germany does for the Leopard 2 tanks. In total, Poland plans to purchase around 1,000 K2 battle tanks, which represents an investment of over 30 billion dollars.
The Netherlands has committed 1.3 billion euros to acquire 22 Skyranger systems, amounting to 59.1 million euros per unit, according to Defence Post. The significant price difference can be attributed to the various vehicle bases, as the Dutch systems are mounted on a Flensburger armored tracked vehicle.
Next in line is Italy, with a program valued at 23 billion euros. The Rheinmetall Panther KF51 will serve as the foundation for Italy's new main battle tank. The German-Italian consortium Leonardo Rheinmetall Military Vehicles is contracted to deliver a total of 132 Panther battle tanks for 8 billion euros and 1,050 Lynx armored vehicles for 15 billion euros by 2035.
In an interesting development, Turkey is planning to license a regional variant of the South Korean K2 battle tank, signaling its commitment to enhancing Europe's defense capabilities, particularly within the framework of the SAFE program.
The Czech Republic has also expressed interest in acquiring 70 German Leopard 2A8 battle tanks.
Production lead times are approximately one year, with large-scale production scaling up over one to two years. For historical reference, during the Cold War, nearly one battle tank was delivered almost every day at certain times. Current expectations suggest that production during peacetime will soon exceed Cold War levels.
The initial procurement contract reveals the financial scale of this initiative: 19 Skyranger systems cost a total of 595 million euros, which breaks down to approximately 31.3 million euros per anti-aircraft system, utilizing the Boxer armored vehicle as the platform.
The Arms Race in Europe
Germany is not alone in its armament efforts; countries across Europe are also ramping up their military capabilities, and the figures indicate an arms race worth hundreds of billions of euros.Under Germany's leadership, KNDS and Rheinmetall are collaborating with partners from 11 countries to develop a new European battle tank.
France is also working with Germany on the competitive MGCS (Main Ground Combat System) project.
Poland is at the forefront of a surge in tank procurement in Europe. The country has recently completed a deal to acquire 180 South Korean K2 battle tanks for six billion dollars, as reported by Military Watch magazine. At an average cost of 33.3 million dollars per tank, Poland is spending more than Germany does for the Leopard 2 tanks. In total, Poland plans to purchase around 1,000 K2 battle tanks, which represents an investment of over 30 billion dollars.
The Netherlands has committed 1.3 billion euros to acquire 22 Skyranger systems, amounting to 59.1 million euros per unit, according to Defence Post. The significant price difference can be attributed to the various vehicle bases, as the Dutch systems are mounted on a Flensburger armored tracked vehicle.
Next in line is Italy, with a program valued at 23 billion euros. The Rheinmetall Panther KF51 will serve as the foundation for Italy's new main battle tank. The German-Italian consortium Leonardo Rheinmetall Military Vehicles is contracted to deliver a total of 132 Panther battle tanks for 8 billion euros and 1,050 Lynx armored vehicles for 15 billion euros by 2035.
In an interesting development, Turkey is planning to license a regional variant of the South Korean K2 battle tank, signaling its commitment to enhancing Europe's defense capabilities, particularly within the framework of the SAFE program.
The Czech Republic has also expressed interest in acquiring 70 German Leopard 2A8 battle tanks.
Production in Peacetime
The European economy is increasingly shifting towards a wartime economy, which necessitates "industrial restructuring," as emphasized by industry experts. The substantial volume of orders is expected to compel the European arms industry to make significant investments.Production lead times are approximately one year, with large-scale production scaling up over one to two years. For historical reference, during the Cold War, nearly one battle tank was delivered almost every day at certain times. Current expectations suggest that production during peacetime will soon exceed Cold War levels.
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