Germany Unveils €377 Billion Plan to Build Europe's Strongest Military
Germany has undergone a significant shift in its military posture since the end of World War II. In recent months, the government has initiated major defense procurement, enacted legislation introducing voluntary military service as well as potential conscription, exempted defense spending from fiscal constraints, and most recently, unveiled a comprehensive €377 billion ($440 billion) military acquisition plan for 2026 and beyond.
Chancellor Friedrich Merz has reiterated his commitment to establishing Germany as Europe’s strongest conventional military, a stance now reinforced by a series of major defense investments. This month alone, Germany placed an $8 billion order for General Dynamics scout vehicles and Rheinmetall/KNDS-manufactured “Schakal” armored vehicles on October 15th, announced a planned $11 billion investment in military drones the same day, confirmed the $4.4 billion purchase of 20 new Eurofighter jets on October 8th, and is considering a potential $10 billion agreement for hundreds of Rheinmetall Skyranger mobile air defense turret systems as of October 10th.
A new 39-page internal government document lays out a list of €377 billion in desired land, air, sea, space and cyber assets. The document is a planning overview of arms purchases that will be spelled out in the German military’s 2026 budget, but many are longer-term purchases for which there is no clear time frame. The 2026 budget cycle includes 320 new military hardware projects, with contractors identified for 178 of them. Around €182 billion will go to German firms through 160 contracted initiatives. These orders cover tactical drones (mainly Rheinmetall’s LUNA NG), hundreds of ground vehicles, Diehl Defence missiles, IRIS-T air defense systems, munitions, and millions of rifle rounds. Major investments also include €2.5 billion for 15 F-35 jets from Lockheed Martin, €1.8 billion for four Boeing P-8A Poseidons, and Tomahawk missiles. Several of the Bundeswehr’s most expensive new projects are in space, with €14 billion set-aside for satellite programs and €9.5 billion allocated to establish a low-earth-orbit satellite constellation aimed at strengthening secure military communications. The aligns with Defense Minister Boris Pistorius’ €35 billion plan to boost Germany’s “space security.”
German industry stands to benefit considerably from this procurement strategy, with over half of all projects assigned to domestic companies. Rheinmetall is notably prominent, featuring in 53 different spending lines worth over €88 billion, including €32 billion directly and additional funds through subsidiaries and joint ventures, particularly Artec GmbH with KNDS of the Netherlands. Bavarian missile manufacturer, Diehl Defence, is the Bundeswehr’s second major industrial anchor, appearing in 21 procurement lines worth €17.3 billion.
25 projects are linked to foreign interests. At a value of roughly €14 billion, this equates to less than 5 percent of the total €377 billion requested. However, the €14 billion allocated to foreign firms includes nearly all of Germany’s strategic capabilities, including nuclear-related and long-range assets such as nuclear-certified aircraft, deep-strike systems, and maritime surveillance technology.
One of the most debated items on the Bundeswehr’s procurement list is the possible purchase of 15 F-35 jets from Lockheed Martin, valued at about €2.5 billion through the U.S. Foreign Military Sales program. This move would maintain Germany’s nuclear-sharing capability but increase its dependence on American maintenance, software, and mission-data access. It would also further align Germany with American military technology that it cannot easily replace. This U.S.-based approach extends to other major acquisitions as well. The Bundeswehr plans to acquire 400 Tomahawk Block Vb cruise missiles for approximately €1.15 billion, in addition to three Lockheed Martin Typhon launchers worth €220 million, a combination that would allow Germany to strike targets up to 2,000 kilometers away. The navy’s interim plan for maritime patrol aircraft, valued at €1.8 billion and involving the purchase of four Boeing P-8A Poseidons, is also within the foreign military sales pipeline.
Each of the three links Berlin’s prospective strike and surveillance capacities to United States’ export and sustainment regulations. While domestic companies account for a larger share financially, the few foreign systems hold significant sway politically by shaping the country’s most critical military functions.