Germany is in talks with several defense manufacturers to build a multi-layered, anti-missile shield that could cost as much as €17 billion ($18.5 billion), according to people familiar with the matter.
(Bloomberg) — Germany is in talks with several defense manufacturers to build a multi-layered, anti-missile shield that could cost as much as €17 billion ($18.5 billion), according to people familiar with the matter.
Chancellor Olaf Scholz’s coalition government is in negotiations with Bavarian-based manufacturer Diehl Defence to procure up to eight IRIS-T anti-missile systems with a contract volume of €2 billion to €3 billion, said the people, who asked not to be identified because the talks are private.
The planned shield, which would also include other systems, would aim to protect Germany as well as neighboring countries from missile attacks, according to the people. The cost of the missile system is subject to change as negotiations are ongoing.
Germany began overhauling its defense industry after Russia invaded Ukraine nearly a year ago, boosting the manufacturing of critical weapon supplies. Scholz announced last year a landmark €100 billion fund to modernize the Bundeswehr and a ramp up in annual defense spending. The fund will be used to finance the transactions.
The overall package would include the Arrow 3 system manufactured by Israel Aerospace Industries, for which the German defense ministry has earmarked up to €4 billion and the US-made Patriot system, on which Berlin could spend as much as €10 billion, said the people.
A spokeswoman for the German defense ministry declined to comment on the details of the negotiations but confirmed talks are ongoing, including with Diehl over the IRIS-T systems. Germany’s goal is to erect a modern anti-missile shield and integrate it into the planned European Sky Shield Initiative.
The anti-missile shield was first announced by Scholz in a speech in Prague in August, when he said that Germany would invest significantly in its air defense over coming years as the continent had “a lot of catching up to do.” He said such an integrated system would be more efficient and cost-effective than if each nation built its own complex systems.
At least 15 countries — mainly within the North Atlantic Treaty Organization military alliance — have signed a letter of intent to join the program.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.