Published by Global Banking & Finance Review®
Posted on September 1, 2025
2 min readLast updated: January 22, 2026
Add as preferred source on GoogleGermany's economy minister is considering state financing for the defence sector to counter threats from Russia, using existing economic transformation funds.
BERLIN (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.
Minister Katherina Reiche said the financing could come from an existing fund intended to facilitate economic transformation - although she did not specify which fund.
"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.
"Rearmament is a security policy imperative, but it is also an economic and technological opportunity for Germany."
A ministry spokesperson later said she was not referring to the Climate and Transformation Fund but to other unspecified resources at the ministry's disposal.
Reiche said "old certainties have disappeared" since Russia's full-scale invasion of Ukraine, and Moscow did not seem interested in a ceasefire.
That is why, she argued, it is right to make state financing available now to give the industry planning security.
The 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.
(Reporting by Christian Kraemer; Writing by Sarah Marsh; Editing by Sandra Maler)
The defense sector encompasses industries and organizations involved in the production of military equipment, technology, and services aimed at national security and defense.
Economic growth is the increase in the production of goods and services in an economy over time, typically measured by the rise in Gross Domestic Product (GDP).
The Bundeswehr is the unified armed forces of Germany, responsible for the country's defense and military operations.
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