The steady growth of the German economy, particularly in the defense sector, has been very noticeable at mid-2024. According to the Financial Times, more and more German manufacturers are moving from the civil sector into the defense business.
Last week, for example, shares in engine maker Deutz jumped more than 20% after it announced plans to develop tank engines. And engineering group Mittelstand is ending its ban on defense contracts.
The rules changed after Russia launched a full-scale war against Ukraine and began providing military aid. Laser manufacturer Trumpf and component maker Hawe Hydraulik were the first to go. “The Germans are ready for a historic shift in their economy,” says political scientist Katherine Kluwer Ashbrook. Not only are manufacturers ready, but the public is too. A survey by PwC Germany shows that almost 70% of the population favors increased defense spending.
“Russia’s aggressive war against Ukraine has undoubtedly strengthened the belief in our society that freedom must be defended by military means if necessary,” said Daimler Truck, which has won a contract to supply 1,500 trucks to Canada.
Lufthansa Technik, which has maintenance contracts for about a fifth of all aircraft, officially launched a military aircraft maintenance division last year. The unit now plans to support German military helicopters and planes.
“It’s a great way to develop technology. Innovation comes from the defense world and finds its way into civilian applications and vice versa,” said Susanne Wiegand, managing director of Renk, which makes parts for tanks.
Such a pattern – aid to Ukraine has a positive impact on the economy – can be seen in all the countries (US, UK, France) that are actively helping to fight Russian aggression.
