German Chancellor Scholz commits to achieving 2% NATO spending goal

German Chancellor Scholz commits to increasing military spending to meet NATO’s 2% target, emphasizing support for Ukraine and defence industry.

German Chancellor Olaf Scholz assured defence companies on Monday that his government would increase military spending and fulfil its pledge to allocate 2% of GDP to NATO defence. Scholz’s comments came in response to former U.S. President Donald Trump’s controversial remarks, suggesting that the United States might not defend NATO allies failing to meet defence spending targets against a potential Russian aggression.

During his presidency, Trump openly criticized nations failing to meet NATO’s 2% GDP defence spending target. Scholz emphasized the need for Germany and Europe’s defence sector to transition to mass production of arms due to the challenges European manufacturers faced in meeting ammunition demand amid the conflict in Ukraine. Scholz made these remarks during a visit to the prospective location of Rheinmetall’s new arms factory in central Germany.

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Scholz stated that there was a need to transition from manufacturing to large-scale production of defence equipment. He emphasized that all European nations, not just the United States, should provide greater support to Ukraine, as the current pledges were deemed insufficient. Scholz expressed that Germany alone could not suffice, but assured that the military and Germany’s defence industry could rely on Berlin’s commitment to meeting the 2% NATO target.

Following Russia’s invasion of Ukraine, Rheinmetall, a major producer of artillery and tank shells globally, initiated an increase in production to address the heightened demand for ammunition, exacerbating existing shortages and posing challenges for European manufacturers. Rheinmetall CEO Armin Papperger stated that the construction of their new factory reflects the evolving circumstances. Expected to commence operations next year, the plant aims to produce approximately 200,000 artillery shells annually. Rheinmetall plans to invest 300 million euros ($323 million) in the project and generate around 500 new job opportunities.

Rheinmetall’s objective is to fulfil the Bundeswehr’s ammunition requirements produced domestically while ensuring timely deliveries to partner nations during crises. The company plans to establish the complete artillery ammunition production process at the central Unterluess factory to achieve this goal.