Germany Buys Tanks, Howitzers in Jumbo Defense Order

(Bloomberg) -- German lawmakers gave the green light to buy 18 battle tanks and 12 self-propelled howitzers from domestic manufacturers Rheinmetall AG and Krauss-Maffei Wegmann GmbH as part of an order worth €843 million ($910 million) to replace equipment sent to Ukraine.

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The purchase, which also includes spare parts and services, was approved by the budget committee in the lower house of parliament Wednesday, according to participants in the meeting.

The Defense Ministry has suggested the order of the next-generation Leopard 2-A8 battle tanks to replace the Leopard 2-A6 tanks that Berlin sent to Ukraine earlier this year. Bloomberg first reported on the order Tuesday.

Chancellor Olaf Scholz’s government will pay €525.6 million for the Leopard 2 tanks and €190.7 million for PzH 2000 howitzers, according to Defense Ministry documents. The supply of spare parts for the Leopards is worth €126.6 million. The first tanks will be delivered in 2026 at the latest.

The agreement with the companies includes the option to purchase as many as 105 additional Leopard tanks in a deal worth as much as €2.9 billion.

The Defense Ministry said in a statement that the Czech Republic voiced interest in joining the Leopard 2-A8 procurement.

Minister Boris Pistorius called the Czech entry a “major step” toward implementing a modern European defense architecture triggered by Russia’s war.

Germany hopes economies of scale can be achieved through larger purchase quantities. Joint procurement also provides planning security for the industry, which can expand production capacities on a more calculable basis, while buying almost identical weapons systems can unleash synergy effects in training and logistics.

A spokesperson for Krauss-Maffei Wegmann declined to comment.

Scholz has abandoned a policy against sending lethal weapons into combat zones in response to Russia’s war in Ukraine. The government in Berlin delivered 18 Leopard tanks at the beginning of this year, while the rapid-fire PzH 2000 was among the first heavy weapons handed over to Kyiv last year.

Shortly after the invasion last February, Germany set aside €100 billion to upgrade its military in a special fund outside its normal budget. But since this is a replacement order, the funds will be part of regular spending.

--With assistance from Alexander Pearson.

(Updates with ministry statement on Czech interest in sixth paragraph.)

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