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11 Mar 25. Germany’s military build up continues, but personnel shortages remain. The German military continued its rearmament but still suffered from serious personnel shortages last year, a report presented to the country’s parliament on Tuesday showed. The paper also detailed the European power’s more assertive foreign military involvement, including its navy’s first-ever shots fired in a combat situation. Presented by the Parliamentary Commissioner for the Armed Forces Eva Högel, the annual paper outlines the military’s status quo while highlighting key shortcomings. Her office was created to ensure parliamentary oversight over the German armed forces. Since Russian President Vladimir Putin’s full-scale invasion of Ukraine in 2022, Germany has undergone a deep transformation in how it approaches its armed forces. It has come with a major cash injection to the tune of hundreds of billions of Euros and a more assertive role for its fighting force internationally. Symbolizing this, last fall, the country ratified an agreement for its first-ever brigade permanently stationed abroad, which will be 5,000 strong and whose facilities are currently being built in Lithuania. The Bundeswehr’s navy, meanwhile, for the first time ever fired live rounds in a combat setting. It was the frigate Hessen that saw the engagement while on an EU mission in the Red Sea to protect the region’s vital shipping routes against attacks by the Yemeni Houthi rebels. For the first time in recent years, Germany’s defense spending in 2024 reached the NATO goal of 2% of GDP, the report says, with military expenditures amounting to more than €69 bn, or $75.4bn USD. Roughly a quarter of this was funded from the special one-off cash injection announced by Chancellor Scholz in the form of a “Sondervermögen” — a special fund — worth €100bn ($109bn) that was created in the immediate aftermath of Russia’s invasion of Ukraine. Only about 18% of this funding source is remaining, the commissioner said. The government’s budgetary committee approved a record 97 major procurement decisions last year, up from 55 the year before. Several of these large purchase decisions fall in the domain of air defense, which is itself a key priority highlighted in this year’s report. In 2024, Germany decided to buy both the Skyranger 30 from Rheinmetall and the Arrow 3 from Israel. The country also ordered new Leopard main battle tanks and 22 self-propelled howitzers to replace those the country sent to Ukraine.
But money alone cannot solve some things, and one of the most stubbornly persistent issues plaguing Germany’s armed forces remained a central topic in 2024: Staffing.
While recruitment increased by 8%, bringing in more than 20,000 new people last year, over a quarter of them chose to leave after their six-month probationary period. Meanwhile, nearly 20% of non-enlisted and 28% of enlisted positions remained vacant. The Bundeswehr is 21,826 heads short of its 203,000 active personnel target, the report laid out. There was a significant structural reform to report, too. The cyber warfare arm last year was elevated to become a full branch of the German military, alongside the Luftwaffe, navy and land forces. On a touchier subject, the report included several pages discussing cases of neo-Nazi sympathies among the ranks and institutional shortcomings in addressing and successfully investigating these situations. In one case, a soldier had reportedly played an SS song for comrades. Only after several years did the case make it to trial; by then, the witnesses professed not to be able to recall whose phone had been playing the song or who had put an end to it. A new enforcement mechanism became available in 2024 following an amendment to the Soldiers Act passed the year prior that sought to accelerate such proceedings. While only a “small minority of soldiers” harbored extremist views, this mechanism was touted as being a necessary and “sharp and effective means against identified enemies of the constitution in the Bundeswehr.” Germany’s incoming governing coalition of conservatives and social democrats has promised to continue down the path of revitalizing and building up the country’s military might. To do so, incoming chancellor Friedrich Merz has suggested exempting defense spending from the country’s constitutionally enshrined debt ceiling, a move that would have been largely unthinkable in notoriously fiscally frugal Germany until recently. While this particular proposal is still mired in a political tug-of-war at present, the more militarist tone of the past few years appears here to stay. (Source: Defense News)
12 Mar 25. European countries need to strengthen their defence ties in Nato without the US and invest more in their own military capabilities in areas such as space and satellites, Sweden’s defence minister has said. (Source: FT.com)
11 Mar 25. Estonia: Government will likely push pro-business, defence policies following coalition fracture. On 10 March, Prime Minister Kristen Michal announced that he would expel the Social Democratic Party (SDE) from the governing coalition due to a dispute over taxation. The decision leaves Michal’s Reform Party and the Estonia 200 party with a narrow majority of just 52 seats in the 101-seat parliament, sustaining the risk of further instability in the event of future disputes. Michal stated that the ejection of the SDE will enable the coalition to move to the political right. Most notable is the move by the Reform Party and Estonia 200 to reverse a planned increase in corporate and income tax, which aims to maintain Estonia’s attractiveness to investors and entrepreneurs. The government will highly likely adhere to the commitment to raise defence spending to 5% of GDP given the broad consensus on this issue, which has been reinforced by the US’ demand for NATO allies to step up on defence spending. We assess that the economy will likely recover slowly in 2025, though the war in Ukraine will likely weigh on investment decisions. (Source: Sibylline)
10 Mar 25. Italy pushes for 200-bn-euro defence plan using EU guarantees. Italy plans to propose to its European partners a guarantee scheme that could potentially trigger investments worth up to 200bn euros ($216.48bn) in the defence and aerospace industries, people familiar with the matter said. Economy Minister Giancarlo Giorgetti will detail the plan at a meeting of European Union finance ministers later on Monday in Brussels, the people said. The bloc is studying options to boost defence spending through new joint borrowing, existing EU funds and a greater role for the European Investment Bank (EIB), with a view to taking decisions in June. Italy backs the discussions and is keen to design ways to limit the impact of the defence push on its strained public finances. State guarantees usually impact the budget when they are tapped. Under the scheme to be proposed by Giorgetti, dubbed the European Security and Industrial Innovation Initiative, some 17bn euros in European guarantees are expected to trigger 200 bn euros over up to five years, the people said. ($1 = 0.9239 euros) (Source: Reuters)
08 Mar 25. A proposed €150bn injection into the EU’s defence industry has become a new flashpoint in a long-standing battle between France and Germany over the continent’s rearmament drive and whether it should include countries outside the bloc. (Source: FT.com)
12 Mar 25. DBT’s approach to supporting UK industry needs boost to unlock full potential of Industrial Strategy.
- The Department for Business and Trade (DBT) should use the clear framework for prioritisation in the forthcoming Industrial Strategy to review how it supports key industry sectors.
- DBT has developed its approach to supporting industry sectors since it formed in 2023, but there are areas to improve.
- Issues identified include a limited view of overall government spending on business support; a lack of transparency when making decisions to support industry; and difficulty in influencing other departments to change policy.
Weaknesses in how the Department for Business and Trade (DBT) supports UK industries must be addressed if government is to maximise the impact of its forthcoming Industrial Strategy and achieve its priority mission of growing the economy, according to a new National Audit Office (NAO) report.1,2,3. In support of this priority, government announced a new Industrial Strategy in October 2024 and identified eight growth-driving sectors that can boost output and productivity growth over the long term.4,5 DBT’s role is to support businesses, including those operating in these priority sectors, to invest, grow and export, creating jobs and opportunities across the country. In the two years since it formed, DBT has done well to merge structures and teams from the former Department for Business, Energy and Industrial Strategy (BEIS) and Department for International Trade (DIT) and address its immediate skills gaps. It has engaged extensively with industry stakeholders to understand their needs and developed sector plans using its knowledge of the economy. It also shares its business intelligence widely across government. However, DBT does not have a complete overview of what it and wider government spends supporting industry – hindering its ability to make sound decisions in the future and allocate resources strategically. To date, DBT has not looked at its industry sector strategies collectively, with limited consideration of the trade-offs between different business support decisions and different sectors. This can make it difficult for stakeholders to understand DBT’s decision making, and for DBT to demonstrate how and why it is prioritising certain decisions over others. DBT also makes too little use of evidence of what works to inform its approach to developing new industry support initiatives. Despite government’s ‘mission-driven’ approach and its stated aim to encourage cross-departmental ways of working, DBT is not always able to exert influence over other departments to achieve policy change that supports business. And while DBT has taken steps to improve how it collaborates with other departments, a lack of clarity has caused frustration among some businesses regarding which department can best support their needs. The success of the Industrial Strategy will depend on whether DBT and other government departments can work effectively together, and with industry, to prioritise and target interventions that drive growth in the priority sectors and across the whole economy. The NAO recommends that DBT uses the forthcoming Industrial Strategy to review its operating model for supporting key industry sectors. It should also clarify the metrics it uses, and the trade-offs it makes, when prioritising certain business support decisions over others; consider how it can collate its spending to support business in a more useful way; lean more heavily on evidence when making such decisions; and develop its approach to monitoring and evaluation to understand what works. Gareth Davies, head of the NAO, said: “DBT was created to provide a ‘front door’ to the UK’s key industries, supporting government’s priority mission of growing the economy. It has made early headway, and now needs to build on its approach to supporting industry and make transparent, informed decisions about where best to deploy its resources.”
07 Mar 25. EU unveils €800bn ‘REARM Europe Plan.’ The detailed legal proposals for the REARM Europe Plan comprises five key elements. European Commission president Ursula von der Leyen has unveiled an ambitious financial strategy, termed the ReArm Europe Plan, which encompasses a budget of €800bn ($867.74bn) aimed at bolstering defence spending across the continent. The initiative outlines a comprehensive approach for leveraging various fiscal tools to assist European Union member countries in rapidly enhancing their defence infrastructure and capabilities. The plan comprises five key elements. The initial aspect of ReArm Europe initiative involves activating the deployment of government funds for defence purposes within individual nations. This could potentially release up to €650bn for defence spending. A subsequent proposition introduces a novel mechanism designed to extend up to €150bn in lending to member countries for defence-related expenditures. The essence of this approach is to enhance the efficiency and collective nature of spending. The third element capitalises on the financial leverage of the EU’s budgetary resources. The final two strategic objectives focus on engaging private investment by expediting the progress of the Savings and Investment Union, as well as using the financial capabilities of the European Investment Bank.
von der Leyen said: “We are coming out of this European Council very determined to ensure Europe’s security and act with the scale, speed and resolve that the situation demands. We are determined to invest more, better and faster together. From Paris to London to Brussels, we have shown that we are willing and able to step up our joint efforts and to coordinate effectively.
“The fact is that Europe is facing a clear and present danger. This is why I presented the REARM Europe Plan to the leaders today, a plan to give Europe the military capability it needs to face today’s threats. It could mobilise up to €800bn. It is about shouldering more responsibility for our own security. Because the urgency is real.”
She concluded: “We will continue working closely with our partners in Nato. This is a moment for Europe. And we are ready to step up.”
The EU chief noted that the upcoming release of the European Defence White Paper is scheduled for 19 March 2025, just prior to the routine session of the European Council. Additionally, a proposal aimed at streamlining defence-related processes will be introduced. The call to re-arm the continent follows recent events from Washington’s new leadership that have spotlighted Europe’s responsibility for its own defense. The US is showing a reduced commitment to safeguarding its longstanding European allies as it navigates and engages with Russia. Recently, the UK has shown its support for Ukraine by signing a bilateral loan agreement worth £2.26bn ($2.9bn) to bolster the defence capabilities of the war-affected nation. (Source: army-technology.com)
11 Mar 25. Estonia: Government will likely push pro-business, defence policies following coalition fracture. On 10 March, Prime Minister Kristen Michal announced that he would expel the Social Democratic Party (SDE) from the governing coalition due to a dispute over taxation. The decision leaves Michal’s Reform Party and the Estonia 200 party with a narrow majority of just 52 seats in the 101-seat parliament, sustaining the risk of further instability in the event of future disputes. Michal stated that the ejection of the SDE will enable the coalition to move to the political right. Most notable is the move by the Reform Party and Estonia 200 to reverse a planned increase in corporate and income tax, which aims to maintain Estonia’s attractiveness to investors and entrepreneurs. The government will highly likely adhere to the commitment to raise defence spending to 5% of GDP given the broad consensus on this issue, which has been reinforced by the US’ demand for NATO allies to step up on defence spending. We assess that the economy will likely recover slowly in 2025, though the war in Ukraine will likely weigh on investment decisions. (Source: Sibylline)
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Founded in 1987, Exensor Technology is a world leading supplier of Networked Unattended Ground Sensor (UGS) Systems providing tailored sensor solutions to customers all over the world. From our Headquarters in Lund Sweden, our centre of expertise in Network Communications at Communications Research Lab in Kalmar Sweden and our Production site outside of Basingstoke UK, we design, develop and produce latest state of the art rugged UGS solutions at the highest quality to meet the most stringent demands of our customers. Our systems are in operation and used in a wide number of Military as well as Homeland Security applications worldwide. The modular nature of the system ensures any external sensor can be integrated, providing the user with a fully meshed “silent” network capable of self-healing. Exensor Technology will continue to lead the field in UGS technology, provide our customers with excellent customer service and a bespoke package able to meet every need.
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