BERLIN, Sept 1 (Reuters) – Germany’s economy minister, Katherina Reiche, indicated on Monday that the government is evaluating the possibility of allocating state-backed financial support to the defence sector. This move comes as production ramps up in response to heightened security concerns following Russia’s 2022 invasion of Ukraine. Reiche suggested that funding could be drawn from existing mechanisms designed to support economic transformation, though she did not name the specific fund. Speaking at a defence industry conference hosted by “Handelsblatt,” the CDU politician stated, “Opening that up now, also for defence, could be a consideration.” She emphasized that rearmament is not only a strategic necessity but also presents a chance for technological and industrial advancement in Germany. A spokesperson later clarified that the Climate and Transformation Fund was not under discussion, but other ministry resources might be utilized. Reiche noted that the geopolitical landscape has shifted fundamentally since the full-scale invasion, with no indication of Russian willingness to cease hostilities. Providing public financing, she argued, would offer the sector greater predictability and long-term planning stability. The German government already plans a significant boost in defence spending and continues to draw from a special fund aimed at modernizing the Bundeswehr, with ambitions to build Europe’s largest conventional military force.
— news from Reuters
— News Original —
German economy minister considers providing defence sector state financing
BERLIN, Sept 1 (Reuters) – Germany ‘s economy minister said on Monday she was considering providing state financing to the defence industry as it ramps up production in the face of the growing threat posed by Russia since its 2022 invasion of Ukraine. n nMinister Katherina Reiche said the financing could come from an existing fund intended to facilitate economic transformation – although she did not specify which fund. n nSign up here. n n”Opening that up now, also for defence, could be a consideration,” the CDU politician said on Monday at a “Handelsblatt” conference on the defence sector. n n”Rearmament is a security policy imperative, but it is also an economic and technological opportunity for Germany.” n nA ministry spokesperson later said she was not referring to the Climate and Transformation Fund but to other unspecified resources at the ministry ‘s disposal. n nReiche said “old certainties have disappeared” since Russia ‘s full-scale invasion of Ukraine, and Moscow did not seem interested in a ceasefire. n nThat is why, she argued, it is right to make state financing available now to give the industry planning security. n nThe German government is already planning a major increase in the defence budget over the coming years, while still drawing down its special fund for modernizing the Bundeswehr, in order to turn it into Europe ‘s largest conventional army.