DECODING: Germany and Its Defense — A Giant Still Learning to Walk

DECODING: Germany and Its Defense — A Giant Still Learning to Walk

Introduction: A Confession Worth More Than Any Speech

Nils Schmid and the Moment of Truth

It took the courage of a deputy minister to say what diplomats had been avoiding for months. Nils Schmid, parliamentary state secretary at the German Defense Ministry, told Bloomberg Television bluntly on June 25, 2026: "We have to admit there is still a long way to go to develop our defense industry, especially in terms of production capabilities." Those words, spoken from Berlin, resonate as both a national confession and an alarm signal. Germany is Europe's largest economic partner, the world's fourth-largest economy — and yet, faced with the Russian threat that became concrete reality since 2022, it is stumbling over the fundamentals of its own rearmament.

The week of June 23–26, 2026 was particularly telling: the spectacular cancellation of the F126 frigate program, an emergency order for MEKO A-200 frigates, and confirmation that the future combat aircraft project SCAF with France is floundering. Three pieces of news. Three symptoms of the same malaise. Germany's defense sector oscillates between declared ambition and disappointing industrial reality.

The Paradox of the Highest Defense Budget in History

Paradoxically, Germany has never spent more on its security. The 2026 defense budget reaches 82.7 billion euros, supplemented by funds drawn from the Sondervermögen — the special 100-billion-euro fund voted on an emergency basis in 2022 — bringing the total above 108 billion euros. Defense minister Boris Pistorius himself declared there is "no longer any reason to complain about the budget." Yet money cannot instantly buy industrial capacity. It takes years to train engineers, expand shipyards, and build production lines.

This gap between funding and real capability is at the heart of the current crisis. The Bundeswehr, which at its nadir had the lowest active-duty strength in its postwar history, now targets 260,000 active soldiers by the mid-2030s. Recruitment applications are up 20%. But equipment is not keeping pace, and the tribulations of the F126 program are the most painful illustration of that failure.

The F126 Shipwreck: Autopsy of an Industrial Disaster

Six Frigates, Zero Deliveries, 18 Billion Reasons to Worry

On June 24, 2026, the Bundesministerium der Verteidigung officially terminated the F126 program, also known as the Niedersachsen class. The contract, signed in 2020 for an initial amount of roughly 10 billion euros, was meant to deliver six anti-submarine frigates to the Deutsche Marine. The outcome by 2026: not a single frigate delivered, projected costs ballooned to 18 billion euros — an overrun of 80% — and the prime contractor, Dutch shipyard Damen Schelde Naval Shipbuilding (DSNS), proved unable to meet schedules or financial commitments.

The attempt to transfer responsibility to Rheinmetall's NVL division was refused. Defense minister Pistorius thus "pulled the plug," as analysts at Naval News put it. Rheinmetall's stock dropped sharply on the announcement, shedding several billion euros in market capitalization in a single session. The program, having already consumed roughly 2 billion euros without producing a single operational vessel, represents one of the largest wastes in recent German military procurement history.

The Replacement Solution: MEKO, Pragmatism Over Ambition

As a replacement, Germany decided to acquire eight MEKO A-200 DEU frigates from ThyssenKrupp Marine Systems (TKMS), a German shipbuilder with which Berlin has worked for decades. The first four units will cost approximately 6.3 billion euros, with an option for four more at around 5.3 billion euros exercisable before the end of 2026. First delivery is expected as early as 2029 — a promise observers greet with cautious optimism.

The MEKO A-200 is a proven design, less sophisticated than the F126 but operational and deliverable. It is a victory of pragmatism over technological hubris. But this choice leaves the Deutsche Marine without new frigates for several critical years, at precisely the moment when Russia maintains constant military pressure on the Baltic Sea. The German navy's anti-submarine warfare capability remains a major concern for NATO planners.

SCAF: The Franco-German Project That Keeps Failing to Take Off

A Future Aircraft With Outsized Ambitions

The Future Combat Air System (FCAS), a joint program between France, Germany, and Spain, was meant to embody Europe's technological sovereignty in combat aviation. Launched in 2017, it aims to replace the Rafale and the Eurofighter by 2040. The program is technically ambitious, politically complex, and industrially disputed between Dassault Aviation, Airbus, and Indra, whose rivalries have repeatedly paralyzed negotiations.

Statements by Nils Schmid during his Bloomberg appearance confirm what insiders have long known: Germany and France are still not on the same page regarding FCAS. Disagreements center on intellectual property sharing, the lead contractor role, and export ambitions. While France pushes for a system integrating combat drones, the New Generation Fighter (NGF), and a networked system of systems, Germany hesitates over the scale of investments and contractual conditions.

The KNDS Shadow and Partial Agreements

On the ground domain, however, Franco-German cooperation is progressing more substantively. KNDS, the joint venture between Nexter (France) and KMW (Germany), is developing the Main Ground Combat System (MGCS) and the future tank to succeed the Leclerc and the Leopard 2. Partial agreements have been signed, but governance ambiguities remain. The week of June 23, 2026 saw announcements about a KNDS agreement — without resolving the FCAS question.

This dichotomy between progress on land and stalemate in the air reveals a political reality: Germany and France can cooperate when industrial stakes are balanced but diverge whenever technological supremacy is in play. FCAS represents for Dassault and the French Air Force an almost existential question of national identity. For Germany, it is above all a matter of industrial policy and exports.

The 2039 Military Strategy: Real Ambition or Wishful Thinking?

Aiming to Be Europe's Leading Conventional Force

In April 2026, Germany released its most comprehensive military strategic documents in decades: an autonomous military strategy for the first time, a revised capability profile, a personnel growth plan, and a reserve strategy. The stated goal is to be "Europe's most powerful conventional fighting force by 2039." The plan calls for expanding the Bundeswehr from 185,420 active soldiers today to 260,000 by the mid-2030s, with a reserve of 200,000.

These figures are impressive on paper. The reality is that the timeline is tight and structural challenges are immense. The Bundeswehr has suffered from decades of underinvestment that left aging equipment, neglected infrastructure, and an institutional culture of making do. The national service law, which entered into force in January 2026, writes the expansion milestones into legislation — with conscription as a fallback option if recruitment targets are not met.

A Program of 153 Debureaucratization Measures

Among the concrete measures is a modernization program dubbed EMA26 (Entbürokratisierungs- und Modernisierungsagenda 2026), consisting of 153 concrete measures and 580 implementation steps aimed at reducing bureaucracy, digitizing workflows, and deploying artificial intelligence in administrative tasks. The notable innovation is that all internal regulations will now carry automatic expiration dates — a revolution for a German military administration known for its attachment to procedures.

These initiatives are commendable but their implementation is a gamble. The Bundeswehr has already launched modernization programs in the past that bogged down. The F126 debacle shows precisely that money and good intentions are not enough without the institutional procurement competence that Germany will need to rebuild progressively. As deputy minister Schmid himself said: this "long way to go" will not be shortened by decree.

The NATO Context: What Germany Owes Its Allies

The 3.5% of GDP Pledge and Its Implications

NATO has set a new spending target of 3.5% of GDP by 2029. For Germany, that is a colossal effort: the country, with a GDP of roughly 4.4 trillion euros, would need to devote more than 150 billion euros annually to defense. The 2026 budget legislation charts a path there, but experts question whether the industry can realistically absorb that pace. Ordering frigates, aircraft, tanks, and ammunition so rapidly risks creating bottlenecks in already-strained supply chains.

Boris Pistorius had warned in March 2026, during an international tour, that Europe must "rely less on the United States." That phrase, spoken from Canberra, reflects the new reality: with Donald Trump in the White House, the question of American commitment to Europe remains fundamentally open. Germany can no longer count on the American shield the way it did for 75 years.

The Baltic Sea and the Eastern Flank: Berlin's Red Line

For the German military staff, the geographic priority is clear: NATO's eastern flank, the Baltic Sea, the Baltic states, and Poland. That is where the risk of escalation is most immediate if Putin's Russia were to decide to widen its conflict with Ukraine. The Deutsche Marine plays a central role in defending this zone with its submarines and frigates. The capability gap left by the cancellation of the F126 is therefore strategically sensitive at precisely the moment when it should not be.

German military planning documents explicitly incorporate scenarios of direct confrontation with Russia by 2029. The goal is not war — it is credible deterrence. For deterrence to work, you need capable forces. And for capable forces, you need delivered, trained, and doctrinally integrated equipment. The cancellation of the F126 is a painful reminder that this process is far from complete.

Germany's Defense Industry: Waking a Sleeping Giant

Rheinmetall, TKMS, and the Challenge of Ramping Up

Germany's defense industry did not disappear during the post-Cold War disarmament years — it mostly pivoted toward civil exports and foreign markets. Rheinmetall, today the sector's flagship, has seen its stock price multiply tenfold since 2022. The company, which produces ammunition, armored vehicles, and air defense systems, has a full order book for several years ahead. But the "ramp-up" — Pistorius's favorite term — takes time.

TKMS, which will now build the eight MEKO A-200 frigates, has demonstrated its ability to deliver on this design with export clients — notably South Africa, Algeria, and Portugal. For Germany, that is a credibility guarantee after the DSNS humiliation. But the delivery schedule starting from 2029 means the Deutsche Marine will have to bridge a capability gap with its current assets for several more years.

The Ammunition Question: The Blind Spot

Beyond the major platforms — frigates, aircraft, tanks — the real crisis of the German (and European) defense industry is ammunition. The conflict in Ukraine revealed that consumption rates in high-intensity warfare exceed peacetime projections by a factor of ten or twenty. NATO stockpiles are inadequate, and production lines cannot simply be doubled overnight. Rheinmetall has announced massive investments in its ammunition factories, including in Ukraine itself, but the concrete results take time to materialize.

This context makes Germany's failure to deliver its large naval platforms on schedule even more alarming. If the country cannot build six frigates on time, how can it guarantee ammunition supply for a prolonged war? The question remains open, and the Pistorius government's answers seem insufficient given the urgency.

The European Comparison: The Polish Lesson

Poland as a Counter-Example

To gauge the scale of Germany's lag, one need only look at Poland. Warsaw, which has long perceived the Russian threat with an acuity that Berlin refused to acknowledge, has committed to massive armament programs since 2022: procurement of 1,000 Korean K2 tanks, 500 K9 howitzers, American F-35 fighters, HIMARS missile systems, and an impressive quantity of ammunition. Poland now devotes more than 4% of its GDP to defense — double what Germany has only just reached.

The paradox is that Poland, an economy roughly half the size of Germany's, is in the process of building an army better equipped for high-intensity combat than its large western neighbor. This is a silent geostrategic revolution that Berlin can no longer ignore. In NATO corridors, Poland is now cited as a model — and Germany as an example of what must not be repeated.

France and the United Kingdom: Contrasting Trajectories

France, for its part, maintains credible military capability, carried by its national defense industry (Dassault, Naval Group, Thales, MBDA) and its nuclear arsenal. It orders its Rafale jets, delivers its FDI frigates, and finances its future aircraft carrier. The pace is slow and budgets are tight, but institutional coherence is preserved. The United Kingdom, since Brexit, is finding its way between strategic autonomy and dependence on the United States, but keeps both aircraft carriers operational.

Germany suffers from a double handicap: decades of peace destroyed its strategic culture as surely as its industrial capabilities, and its constitutional tradition of wariness toward the military makes decisions difficult to take rapidly. This is what deputy minister Schmid implicitly acknowledges: the country is not only behind on equipment, it is behind on itself — on its own understanding of what it means to be a major military power in the 21st century.

Industrial Sovereignty: The Real Lesson of the Defense Crisis

Technological Dependence and Strategic Vulnerability

The F126 frigate crisis illustrates a problem broader than managing a naval contract. It reveals a structural dependence of Germany on foreign supply chains for critical weapons systems. Electronic components, sensors, propulsion systems — a significant share of every German defense platform contains elements produced outside Europe. In a context of deteriorating global trade relations, this dependence is a first-order strategic vulnerability.

Defense minister Boris Pistorius acknowledged in June 2026 that the Zeitenwende cannot be limited to increasing budgets — it must also rebuild a defense industrial base capable of producing, maintaining, and innovating on European soil. Berlin's stated goal is to achieve a European content rate of 80% in major armament programs by 2035 — an ambitious target requiring massive investment in research and development and industrial training.

The Scandinavian Model as a Reference

Sweden and Norway offer a model that Germany watches closely. Both countries maintained robust national defense industries despite smaller economies by specializing their production in technological niches where they excel: anti-tank missiles for Sweden, naval missile systems for Norway. This specialization allows them to be credible contributors to NATO capability exchanges rather than depending entirely on American imports.

For Germany, the size of its economy offers a different opportunity: it can aspire to a complete defense industrial base covering land, air, and naval systems. The Rheinmetall group, whose revenues have tripled since 2022 to exceed 10 billion euros in 2025, is proof that this ambition is not chimerical. But rebuilding an industry takes years in normal circumstances — under pressure to produce quickly, the rush to deliver can create new quality problems similar to those of the F126.

Conclusion: The Long Road Announced Is Also the Right Road

Clarity as the First Step

The admission by Nils Schmid — "there is still a long way to go" — is simultaneously discouraging and encouraging. Discouraging because it confirms that Germany is not where it should be, not where its allies need it to be. Encouraging because clarity is the first condition of any real progress. States that deny their shortfalls never close them. Those that acknowledge them openly can at least begin to chart a course.

The decisions of the week of June 23, 2026 — as painful as they are — point in the right direction. Abandoning the F126 means admitting that perfection is the enemy of the good. Ordering the MEKO means choosing rapid delivery over technological ambition. Acknowledging the FCAS stalemate means refusing to keep spending on projects that are not moving forward. These pragmatic choices are the language of strategic accountability.

What Europe Still Awaits

Europe needs a strong, capable, and committed Germany. Not a Germany perfect in its declarations and absent in its deliveries. The "long road" Schmid invoked is not an excuse — it is a program. Provided the German government holds to it, the Bundestag maintains its budget commitments, and the national industry — TKMS, Rheinmetall, Airbus Defense — proves equal to the orders entrusted to it. The world cannot wait. Neither can Putin.

By Maxime Marquette, columnist

Columnist's transparency note

Who I Am and What I Stand For

Maxime Marquette is a Franco-European columnist specializing in defense, geopolitics, and Western strategy. I am firmly pro-NATO, pro-Ukraine, and convinced that European collective security depends on a militarily serious Germany. I have no affiliation with defense industrial groups, political parties, or governments. My perspective on Germany is not hostile — it is that of a partner awaiting deliveries.

Limitations and Uncertainties in This Analysis

I do not have access to classified assessments of the true state of Bundeswehr capabilities, nor to internal negotiations between Berlin and its industrial partners. The figures cited come from official sources and recognized expert analyses. The evolution of the MEKO and FCAS programs depends on future political decisions that no one can predict with certainty. Any military delivery schedule should be read with prudent skepticism — the history of the F126 made that lesson painfully clear.

Sources

Primary sources

Bloomberg — "German Defense Sector Has Long Way to Go, Deputy Minister Says" (interview with Nils Schmid) — June 25, 2026

Naval News — "Germany is cancelling the F126 frigate project and procuring eight MEKO frigates" — June 24, 2026

Defense News — "Germany scraps F126 frigate program, pivots to MEKO warships amid cost and contractor chaos" — June 24, 2026

Secondary sources

Defense News — "Germany unveils strategy for becoming Europe's strongest military by 2039" — April 22, 2026

Meta-Defense.fr — "F126 cancelled, MEKO A-200 ordered urgently, and a looming capability shortfall for the Deutsche Marine" — June 24, 2026

Atlas Institute for International Affairs — "Germany's Path to Kriegstüchtigkeit: The 2026 Defence Budget" — December 2025

Shephard Media — "Germany sinks F126 frigate programme in favour of cheaper MEKO A-200" — June 25, 2026