Germany Bolsters Military Expansion With €2.9 Billion Tank Order

(Bloomberg) -- Germany plans to buy 105 additional Leopard 2 A8 battle tanks as part of the ruling coalition’s multi-billion euro program to modernize the armed forces triggered by Russia’s full-scale invasion of Ukraine.

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Defense Minister Boris Pistorius has asked lawmakers to approve the purchase from Franco-German manufacturer KNDS in a deal worth €2.9 billion ($3.1 billion), according to people familiar with the planning and a government letter to parliament seen by Bloomberg.

The budget committee in the lower house is expected to give the green light before the summer break begins in mid-July, added the people, who asked not to be identified discussing confidential information.

Some of the tanks, which will be delivered in tranches by 2030, will be deployed to bolster a planned brigade in Lithuania, part of NATO efforts to shore up Europe’s eastern flank against potential Russian aggression.

The latest tank order comes on top of one for 18 Leopards that Germany placed last year. That agreement included the option for the additional 105 units.

The purchase isn’t covered by Germany’s debt-financed €100 billion special fund for military spending, nor by the regular federal defense budget for the years from 2025 onwards, according to one of the people.

Instead, lawmakers will approve a so-called commitment authorization, meaning that the government guarantees payment.

KNDS was formed from the merger in 2015 of Germany’s Krauss-Maffei Wegmann GmbH & Co. KG and France’s Nexter.

Separately, German defense contractor Rheinmetall AG announced Thursday it had received an order for 155mm artillery ammunition from Germany’s armed forces worth as much as €8.5 billion.

The purchase is to replenish stocks held by the Bundeswehr and its allies, and to provide support to Ukraine in its defense against Russia’s invasion, the company said.

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