The leader of one of Germany’s largest arms manufacturers said the country’s increased military budget of 100 billion euros (around $108 billion) is “too low” to meet the government’s goal of modernizing Germany’s military capacity.
German Chancellor Olaf Scholz announced the bolstered budget days after Russia’s invasion of Ukraine in February 2022.
“Many people talk about the fact that the defense budget is too low, and I can confirm that,” Rheinmetall CEO Armin Papperger told Reuters this week in a video interview.
“Last year, for example, we were not able to deliver trucks or ammunition because there was no budget, because there was no money,” the CEO said.
In the interview, Papperger praised newly appointed German Defense Minister Boris Pistorius for the “absolute record” time it took the two to have a conversation.
“Mr. Pistorius is the 11th defense minister I have seen in my time at Rheinmetall. And never has anyone wanted to meet with us so quickly. I think that is important, we are living in special times, we have war in Europe,” he said.
Germany’s special defense fund, which was set up last year, is no longer enough to cover its requirements, Pistorius said in an interview with German newspaper Süddeutsche Zeitung published on Friday.
He also said sending fighter jets to Ukraine was “out of the question” after the country agreed to provide Leopard 2 tanks earlier in the week.
The Rheinmetall CEO said in the interview his company could increase its production of tank rounds to over 100,000 “today,” and that the arms manufacturer has a total capacity of over 240,000 rounds, but for a bottleneck of gunpowder.
He added that the gunpowder shortage was being compounded by the demand to produce both tank and artillery shells.
“That means we would actually need a further powder capacity in Europe and ideally one in Germany,” Papperger said.
The CEO said his company would need financial assistance from the German government if it wanted to build another ammunitions factory to meet that potential demand.
“It would be a relatively large plant as we would need to build a specialized chemical plant that would carry an estimated cost of between 700 and 800 million euros (between about $761 million and $871 million),” Papperger said.
“This is an investment that cannot be borne by the industry alone, but is an investment in national security, which is needed,” he added.
A Rheinmetall spokesman told CNN on Tuesday that even though it has 139 Leopard tanks in stock, only 29 modern Leopard 2 combat tanks could be ready for delivery as early as April or May, as they are being prepared for a weapons ring exchange. Rheinmetall would need about a year to prepare another 22 Leopard 2 vehicles that it has in stock, he added.
CNN’s Inke Kappeler and Claudia Otto in Berlin contributed reporting to this post.