Fresh money for armaments: weapons instead of windmills

The federal government is apparently planning to divert some of the billions in funds for the coal phase-out for new weapons factories.

Federal Minister of Economics Robert Habeck boards a Bundeswehr flight readiness aircraft to fly to Washington DC. Bernd von Jutrczenka/dpa

Germany is considering diverting existing subsidies for phasing out coal-fired power plants to help arms manufacturers build new production facilities. Bloomberg reports, citing people familiar with the matter.

Talks between the federal and state governments were aimed at equipping the Bundeswehr with more weapons and ammunition and creating jobs in regions affected by the coal phase-out, the unnamed Bloomberg sources said.

The German Bundeswehr has been suffering from poor equipment for years. After the Russian invasion of Ukraine, the federal government earmarked military spending of 100 billion euros last year for the expansion and modernization of the Bundeswehr.

The German armaments group Rheinmetall AG announced in December that it was expanding ammunition production in order to eliminate supply bottlenecks caused by the government’s support for Ukraine. According to Bloomberg, the company is investing more than 10 million euros in a new production line at its site in Unterlüß near Hamburg. The plant is to produce ammunition for the 30 “Gepard” self-propelled anti-aircraft guns that the German government wanted to deliver to Ukraine.

Irrespective of this, Rheinmetall is examining the construction of another factory for the production of raw materials and components for ammunition in eastern Saxony, which is affected by the coal phase-out, according to Bloomberg. However, the plans are still at an early stage. Spokesmen for the Ministry of Economics and Rheinmetall initially did not comment.