The conference has emerged as one of the most prominent security forums in the wake of the Ukraine War, first convened in 2023. Bringing together policymakers, military officials, industry leaders, academics, and media representatives, the conference provides a multidimensional platform to debate the rapidly evolving global security environment.

Each year the LDC has focused on distinct themes, with 2023’s “Stronger Security in a Fast-Changing World,” 2024’s “Deterrence: Building Capacity to Counter Global Threats,” and 2025’s “Alliances” reflecting shifts in international security. This year the conference held between April 9-11, centered on the theme of “Readiness.” This year’s theme evokes a stronger sense of action than the previous ones. Rather than merely diagnosing threats or discussing frameworks, “Readiness” calls for proactive preparation, rapid adaptation, and the ability to respond effectively to a wide spectrum of security scenarios.

The opening panel “Uniformed Services and the Whole-of-Society Approach” set the tone by highlighting the necessity of integrating civilian and military efforts in national defence strategies. This approach recognizes that modern conflicts include traditional battlefields but also extend beyond them, encompassing economic resilience, technological innovation, and societal cohesion. In this sense, one of the key concepts discussed extensively during the conference was resilience. Unlike traditional notions of strength, resilience is a core component of readiness and relates to the ability to learn, adapt, and sustain functionality under pressure.

Following the invasion of Ukraine, several European countries have invested in enhancing resilience in civilian domains. Some have prepared public guidance materials outlining actions to take in times of crisis or war, while others have explored ways to protect cultural heritage during conflicts. Discussions at the conference reflected a growing interest in strengthening the whole-of-society approach in the UK. The challenge lies in framing the narrative of readiness in a way that mobilizes society by fostering a sense of urgency without inducing fear.

Additionally, the concept of reindustrialization emerged as a central subtheme of the conference, not merely as an increase in production capacity but as a qualitative shift toward smarter, faster, cheaper and more collaborative manufacturing processes. During the sessions, it was emphasized that the nature of warfare is undergoing rapid transformation, driven by technological advancements and shifting geopolitical dynamics. National security now encompasses a wide array of domains, from supply chains and energy systems to information environments and emerging technologies. Defence industries are no longer evaluated solely on output volume but on their ability to innovate, integrate, and scale efficiently in response to emerging threats. In this sense, readiness is not a static condition but a dynamic process shaped by continuous learning and adaptation.

The conference also addressed the evolving character of warfare, with particular attention to lessons learned from Ukraine. The conflict has demonstrated the continued relevance of conventional warfare while simultaneously highlighting the transformative impact of new technologies. The widespread use of drones has fundamentally altered the battlefield, enabling more flexible and cost-effective operations. One of the most important examples of Ukraine’s advanced capabilities in this regard is Operation Spider Web, a drone attack targeting Russian aircraft which was the subject of my research poster presented at the conference. In this study, I analyzed the extent to which it corresponds to existing theories of deception and what it reveals about the continuity and transformation of deception in modern warfare. Operation Spider Web is one of the most significant examples showing how weaker states can gain asymmetrical advantages over stronger adversaries through deception and surprise attacks. Ukraine’s experience further demonstrates how necessity can drive rapid innovation, offering valuable insights for other countries seeking to enhance their defensive capabilities.

The concept of alliances remained central to the conference’s discourse. For the UK, while NATO continues to be the primary framework for collective defence, strengthening bilateral and regional partnerships within Europe and through the “special relationship” between the UK and the US is essential. The idea that “united we are stronger” encapsulated the prevailing sentiment, especially in the face of a perceived alignment among adversarial states such as China, Russia, Iran, and North Korea. Despite their ideological differences, these countries were described as converging around a shared objective of challenging the Western-led international order. A recurring concern was the perceived uncertainty surrounding the US’ commitment to European security and its role within NATO.

Ultimately, the LDC underscored a fundamental shift in how security is conceptualized and practiced. Readiness is not a static goal but an ongoing process that demands continuous adaptation, collaboration, and investment. It requires a holistic approach that integrates military, economic, technological, and societal dimensions, while also addressing the psychological aspects of preparedness.

Looking ahead, the continuation of initiatives such as the Future Leaders’ Day and the upcoming the LDC Washington Forum in September 2026 indicates that the conference aims to sustain its momentum and expand its influence. As global security challenges become increasingly complex and interconnected, platforms like the LDC will play a crucial role in shaping Western strategic thinking and fostering the collaborative efforts needed to navigate an uncertain future.

Spring has arrived in Oxford with unusual speed this year. Locals say it has been one of the rainiest seasons in memory. Yet with the arrival of blossom and longer days, nature has come alive – and so has our planning for an even more productive period ahead. We at the Oxford Centre for Geopolitics have taken this moment to reflect, recalibrate, and plan for a productive and ambitious period ahead.

So, what exactly have we been doing over the past semester?

Over the past semester, our focus has been on laying the intellectual and institutional groundwork for the year ahead. As global geopolitical dynamics continue to evolve at pace, the need for fresh perspectives and rigorous analysis has never been more pressing.

Our 2026 Research Agenda

This year, the Oxford Centre for Geopolitics will focus on the following three core themes:

1. Future of AI: Geopolitics and the Global Divide
   Exploring how artificial intelligence is reshaping global power structures and widening gaps between technological leaders and followers.

2. When Civilian Technology Becomes Strategic Power: The New Era of Dual-Use Innovation
   Examining the increasing overlap between civilian and military technologies, and its implications for global competition.

3. Shifting Power: China, Middle Powers & the West
   Analysing the evolving balance of power between major and emerging actors in the international system.

These topics reflect the most pressing intersections between technology, power transitions, and international order. Detailed research papers, policy briefs, and events will be rolled out throughout the year.

Launch of Our New Web Platform

We are pleased to announce the launch of our new website ( https://www.oxford-geopolitics.org/ ), alongside a dedicated publishing platform on Substack - https://opinion.oxford-geopolitics.org/. This platform will serve as the primary outlet for our fellows’ work, featuring weekly analysis and commentary on pressing geopolitical issues.

We warmly invite you to subscribe and follow our publications as we expand our intellectual footprint.

Trinity Term Activities

Looking ahead to Trinity Term, we have an exciting lineup of events and engagements planned:

• A series of seminars and roundtable discussions hosted in Oxford University

• Visits to leading think tanks in London

• A forthcoming collaborative event with King’s College London and Cambridge University (details to be announced)

• Two joint events with the Oxford International Development Centre

• Additional events at Saïd Business School and Pembroke College

• A collaborative event with the Oxford Space Initiative

Further details will be shared soon—stay tuned.

Welcoming Our New Fellows

We are thrilled to welcome the 2026 cohort of Research Fellows to the Oxford Centre for Geopolitics. This year’s fellows hail from leading institutions including the University of Oxford, University of Cambridge, King’s College London, and the University of Warwick.

These distinguished scholars bring fresh expertise and diverse perspectives. Over the coming months, they will share their research and insights through articles and briefings on our new Substack platform.

We wish them every success and are confident their contributions will greatly enrich our work and the wider policy debate.

As Trinity Term begins and Oxford fills with the energy of spring, the entire team at the Oxford Centre for Geopolitics is energised and ready for what promises to be a dynamic and impactful period.

We look forward to keeping you informed and engaged throughout the term.

On April 8, 2026, France became the first major Western democracy to formally commit its entire government apparatus to abandoning Microsoft Windows in favour of Linux. The announcement, made at an interministerial seminar convened in Paris at the Prime Minister’s direction, is less a technology procurement decision than a geopolitical one: a direct response to escalating fears that American software infrastructure has become a strategic liability for European states. DINUM — the Direction interministérielle du numérique, France’s coordinating body for government IT — will migrate its own workstations as an initial proof of concept. Every ministry and public operator must then formalise its own dependency-reduction plan by autumn 2026, covering seven domains: operating systems, collaborative tools, antivirus software, artificial intelligence, databases, virtualisation, and network and telecommunications equipment.¹

The ambition is sweeping. France is attempting something no large democracy has accomplished at national scale — systematically unwinding decades of dependence on a single foreign technology ecosystem.

THE TRIGGER WAS POLITICAL, NOT ONLY TECHNICAL

The timing of the announcement is no accident. Since January 2025, the Trump administration has wielded technology access as a coercive instrument in ways that have alarmed European capitals. When the United States sanctioned International Criminal Court officials, ICC chief prosecutor Karim Khan reportedly lost access to his Microsoft email account — an incident Microsoft subsequently disputed, claiming the ICC itself made the decision to disconnect his services, though Dutch press reporting suggested Microsoft had made the broader service continuation contingent on that disconnection.² US tariffs of 20 per cent on EU goods, Vice-President Vance’s attacks on European regulation at the Munich Security Conference, and Commerce Secretary Lutnick’s explicit linkage of tariff relief to the rollback of digital rules have collectively dissolved any remaining illusion of apolitical technology partnerships.

David Amiel, France’s Minister of Public Action and Accounts, framed the pivot in blunt terms: “We can no longer accept that our data, our infrastructure, and our strategic decisions depend on solutions whose rules, pricing, evolution, and risks we do not control.” His counterpart Anne Le Hénanff, Minister Delegate for Artificial Intelligence and Digital Technology, described digital sovereignty as “a strategic necessity,” positioning France as the vanguard of a broader European shift.³

The legal architecture reinforces the political anxiety. The US CLOUD Act of 2018 grants American authorities the power to compel any US-controlled company to produce data stored anywhere in the world — including servers physically located in the European Union. FISA Section 702, reauthorised in 2024, enables mass surveillance of non-US citizens’ data without individualised warrants. These statutes exist in irreconcilable tension with Europe’s GDPR. In June 2025, testifying before a French Senate inquiry into public procurement and digital sovereignty, Microsoft France’s director of public and legal affairs acknowledged that, should US authorities issue a legally justified demand, the company could not guarantee that data held in France would not be transmitted without the explicit consent of French authorities.⁴ With American cloud providers controlling the vast majority of the European cloud market, the exposure is not theoretical.

A SOVEREIGN SOFTWARE STACK ALREADY TAKING SHAPE

France’s bet on Linux is not a leap into the unknown. It builds upon a two-decade precedent that most outside observers have overlooked. The National Gendarmerie — France’s 95,000-strong military-police force — began its migration from Windows to a custom Ubuntu-based distribution called GendBuntu in 2004, taking a deliberately phased approach: first replacing Microsoft Office with OpenOffice, then migrating browsers and email clients, and finally deploying Linux on desktops from 2008 onwards. By June 2024, 103,164 Gendarmerie workstations — representing 97 per cent of the entire fleet — were running GendBuntu, constituting one of the largest Linux desktop deployments in any government worldwide.⁵

The Linux migration is the most dramatic element of a broader campaign to replace American software across French government operations. DINUM has assembled La Suite Numérique — a cohesive ecosystem of open-source productivity tools already adopted by more than 500,000 users across more than 15 ministries and affiliated public bodies.⁶ The suite encompasses four functional pillars.

Tchap, a secure messaging platform built on the open Matrix protocol, has exceeded 375,000 monthly active users and was made mandatory across government ministries from September 2025, with its use explicitly preferred over platforms such as WhatsApp, Signal, and Telegram for official communications. Visio, a video conferencing tool built on the open-source LiveKit framework with AI transcription provided by French start-up Pyannote, is replacing Microsoft Teams and Zoom: the CNRS — France’s national research centre, which is planning the replacement of Zoom licences covering 34,000 agents and 120,000 affiliated researchers — has been among the institutions preparing migration. France Transfert, a sovereign file-sharing service hosted on ANSSI-certified SecNumCloud infrastructure operated by Dassault Systèmes’ subsidiary Outscale, has displaced WeTransfer and Dropbox for government file exchange. The National Health Insurance Fund (CNAM), with 80,000 agents, has formalised a partnership with DINUM to deploy La Suite tools — and France’s national health data platform, currently hosted on Microsoft Azure, is scheduled for migration to sovereign infrastructure by the end of 2026.⁷

Digital sovereignty requires more than swapping desktop software — it demands indigenous capacity in artificial intelligence, where dependence on American platforms may prove even more consequential than operating-system choices. Here, France possesses a genuine industrial asset in Mistral AI. Founded in 2023 by alumni of DeepMind and Meta, the Paris-based company reached a valuation of €11.7 billion in its September 2025 Series C, led by Dutch chip designer ASML, with Nvidia, Andreessen Horowitz, Bpifrance, General Catalyst, Index Ventures, and Lightspeed as additional participants. ⁸

France’s national AI strategy, initially launched in 2018 and substantially expanded in 2023, has aligned public policy with the thesis that sovereign computing infrastructure — not merely regulatory frameworks — is required for meaningful AI independence. Mistral CEO Arthur Mensch has argued publicly that dependency on American cloud infrastructure for AI training constitutes a strategic vulnerability, and that European organisations require alternatives hosted within European jurisdictions. Supported by both private investment and state policy alignment, Mistral is building the physical compute layer that France’s sovereignty ambitions require.

EUROPE IS MOVING — BUT THE SCALE GAP REMAINS FORMIDABLE

France is not acting in isolation. Germany’s Schleswig-Holstein has migrated roughly 80 per cent of its 30,000 government workstations away from Microsoft, reporting annual licensing savings of €15 million in 2026 alone. Denmark’s Ministry of Digital Affairs announced its own open-source transition in 2025. Austria’s armed forces have replaced Microsoft Office with LibreOffice across 16,000 computers. The European Data Protection Supervisor found in 2024 that the European Commission’s own use of Microsoft 365 violated GDPR. ⁹

The EU AI Act, reaching full application in August 2026, adds regulatory momentum. Its requirements for transparency and auditability in high-risk AI systems structurally favour open-source architectures — an advantage for European providers such as Mistral, whose models are substantially open-source, over their closed American competitors. The convergence of the AI Act, the Data Act applicable since September 2025, DORA for financial services, and NIS2 for critical infrastructure is creating an environment in which sovereign technology choices become not merely politically attractive but legally prudent. ¹⁰

Yet the scale challenge is formidable. American hyperscalers — AWS, Microsoft Azure, and Google Cloud — collectively invest hundreds of billions annually in infrastructure, dwarfing all European efforts combined. GAIA-X, the Franco-German federated cloud initiative launched with considerable fanfare in 2019, has largely failed to produce operational infrastructure commensurate with its political ambitions. European cloud providers hold only a small fraction of their own continental market, a share that is declining rather than growing. Closing the infrastructure gap would require sustained, coordinated EU investment on a scale that is nowhere on the political horizon.

DIGITAL SOVEREIGNTY: DATA, DEFENSE AND DESTINY?

France’s digital sovereignty agenda faces a paradox familiar to all long-term technology transitions: the timeline for execution extends well beyond the political cycle that generated the mandate. The presidential election looms approximately one year away. Microsoft’s European headquarters sits in Paris; lobbying pressure will be intense and sustained.

The deeper tension is structural. Even as France replaces its desktop layer, the substrate beneath remains overwhelmingly American. Government AI models train on NVIDIA hardware. Sovereign aspiration is not the same as sovereign reality.

If the autumn 2026 ministry plans prove genuinely ambitious, and if the June 2026 Industrial Digital Meetings generate durable public-private coalitions, France will have created an institutional framework capable of outlasting any single administration. The Gendarmerie’s quiet, two-decade Linux deployment survived multiple changes of government precisely because it delivered measurable operational results without ideological grandstanding.

Whether a national-scale transition can replicate that pragmatic persistence — amid tariff wars, artificial intelligence races, and electoral cycles — will determine whether France’s digital sovereignty remains coherent policy or retreats into mere political posture. The borders of the 21st-century state, France is insisting, are no longer drawn only on maps. They are written in code. And Paris intends to hold the pen.

NOTES & SOURCES

¹ DINUM (Direction interministérielle du numérique). “Souveraineté numérique : l’État accélère la réduction de ses dépendances extra-européennes.” Official press release, 8 April 2026. https://www.numerique.gouv.fr/sinformer/espace-presse/souverainete-numerique-reduction-dependances-extra-europeennes/

² The Register. “Microsoft throws spox under the bus in ICC email flap.” 18 February 2026. Multiple reports confirmed Karim Khan’s email access was disconnected following US sanctions; Microsoft disputed direct responsibility. https://www.theregister.com/2026/02/18/microsoft_asks_uk_parliament_to_correct_record/

³ Heise Online. “France’s plan: Away from Windows, towards Linux.” Quotes from ministers Amiel and Le Hénanff at the April 8 seminar.https://www.heise.de/en/news/France-s-plan-Away-from-Windows-towards-Linux-11251739.html , 9 April 2026.

⁴ Forbes. Microsoft France Director Anton Carniaux, French Senate public procurement inquiry hearing, June 2025. Carniaux stated: “No, I cannot guarantee that.” https://www.forbes.com/sites/emmawoollacott/2025/07/22/microsoft-cant-keep-eu-data-safe-from-us-authorities/

⁵ The Next Web. “France orders all government ministries to ditch Windows for Linux in digital sovereignty push.” GendBuntu statistics confirmed: 103,164 workstations, 97% of fleet, €2M/year savings, 40% TCO reduction. https://thenextweb.com/news/france-linux-windows-migration-digital-sovereignty

⁶ DINUM / numerique.gouv.fr. LaSuite partnership announcement with CNAM: “already adopted by more than 500,000 users” and deployed across “more than 15 ministries.” https://lasuite.numerique.gouv.fr, March 2026.

⁷ LeMagIT. “Polémique autour de LaSuite.” February 2026. Tchap: 375,000 monthly active users; mandatory from September 2025. CNRS: 34,000 agents and 120,000 researchers. Outscale/Dassault SecNumCloud hosting confirmed. https://www.lemagit.fr/actualites/366638848/Polemique-autour-de-LaSuite-la-DINUM-se-defend-et-ne-ferme-pas-la-porte-au-prive

⁸ ASML / Mistral AI. Series C funding press releases, 9 September 2025. €1.7 billion raised; €11.7 billion post-money valuation; ASML lead investor with €1.3 billion. https://www.asml.com/en/news/press-releases/2025/asml-mistral-ai-enter-strategic-partnership ; https://mistral.ai/news/mistral-ai-raises-1-7-b-to-accelerate-technological-progress-with-ai

⁹ Schleswig-Holstein migration: https://interoperable-europe.ec.europa.eu/collection/open-source-observatory-osor/news/schleswig-holsteins-open-source-strategy-year

¹⁰ European Commission. AI Act (2024); Data Act (applicable September 2025); NIS2 Directive; DORA.https://www.eiopa.europa.eu/digital-operational-resilience-act-dora_en

“In the race to master artificial intelligence, the United States and China are not just building faster algorithms; they are constructing rival blueprints for the digital world’s future.”

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The US-China race in artificial intelligence is about more than algorithms and processors: it is a struggle to control the rules, the infrastructure, and the future of the digital world.

Just as the nuclear arms race became the strategic centrepiece of the Cold War, the contest for dominance in artificial intelligence (AI) and quantum computing (QC) is fast becoming the defining arena of twenty-first-century great-power rivalry.

These capabilities are no longer peripheral research projects. They are now central to national security, poised to transform economic productivity, military effectiveness, and geopolitical influence.

The country that establishes and secures a decisive lead will not merely set the pace for the next generation of civilian and military applications; it will have the means to recalibrate the global balance of power.

Because AI and QC are inherently dual-use technologies, advances in one area can quickly be repurposed in the other. This enables the development of more autonomous weapons systems, more sophisticated surveillance architectures, and faster, data-driven strategic decision-making.

Neither Washington nor Beijing believes it can afford to lose this race.

For Washington, conceding leadership is not an option. The prevailing consensus is that the United States must remain ahead to safeguard both economic advantage and national security.

Reflecting this urgency, Vice President JD Vance described the development of artificial intelligence as an ‘arms race’ with China.

Donald Trump’s return to the White House has ushered in a more assertive approach to AI policy driven by the ‘America First’ agenda.

Early in his second term, he issued an executive order titled ‘Removing Barriers to American Leadership in Artificial Intelligence’, explicitly committing his administration to accelerating the development of AI with minimal constraints as a means of ensuring US technological dominance.

Shared goal, divergent paths

If AI is to become the foundation of global power, the question is no longer “whether” states will compete for dominance, but “how”—and on whose terms.

Both Washington and Beijing are convinced that mastery of AI infrastructure will determine who sets global standards, secures the world’s data flows, and controls the computational resources underpinning finance, defence, and beyond.

But they diverge in their methods, principles, and narratives.

This logic is strikingly reminiscent of the nuclear competition of the Cold War, when fears of a ‘missile gap’ with the Soviet Union led to an intense acceleration of US strategic programmes.

Then, as now, policymakers saw technological victory as the key to sustaining global primacy.

For Washington, allowing a rival, particularly China, to control this domain would mean relinquishing strategic leverage over the networks and platforms that define the modern world.

Its newly unveiled “Winning the AI Race: America’s AI Action Plan” opens with an unequivocal statement of intent: “The United States is in a race to achieve global dominance in artificial intelligence (AI).

Whoever has the largest AI ecosystem will set global AI standards and reap broad economic and military benefits.”

The plan’s America First orientation casts AI leadership as a core pillar of US national security.

It proposes dismantling domestic regulatory constraints, accelerating innovation, expanding data-centre capacity, and ensuring semiconductor self-sufficiency— measures designed to safeguard America’s proprietary advantage and maintain its geopolitical leverage in the AI era.

This approach focuses on controlled access, involving the restriction of advanced computing and chipmaking technology exports to China and the sharing of cutting-edge capabilities primarily with ‘trusted allies’.

This exclusivity-focused approach stems from the belief that protecting proprietary advantages is essential for maintaining commercial leverage and strategic superiority.

China’s ‘openness’ strategy

Beijing responded to Washington’s action plan with one of its own, emphasising international cooperation in both development and regulation.

Warning against AI becoming an “exclusive game” controlled by a few nations and corporations, China positioned itself as the champion of openness.

China’s Global AI Governance Initiative has pledged to expand open-source development and share capabilities with developing countries, particularly in the Global South, as well as to promote multilateral governance through a new international body headquartered in Shanghai.

These initiatives are intended not only to institutionalise China’s leadership role but also to bring global rules, standards, and norms more closely into alignment with its strategic interests.

Two objectives underpin this openness.

First, by releasing advanced open-source models, Beijing is contesting the US approach of monetising AI as an exclusive, proprietary product. If these open-source platforms achieve the same level of performance as their US counterparts, the commercial advantage of exclusivity — one of Washington’s key competitive assets — could be significantly diminished.

Second, by enabling these models to be freely adapted and exported, China embeds its technology in the digital infrastructure of emerging economies. This creates long-term dependencies and gives Beijing greater leverage over global technical standards and governance frameworks.

Who will dominate AI sovereignty?

Recent advances by Chinese AI firms are closing the performance gap with the US, raising the prospect of a world in which American dominance is no longer guaranteed — and in which Chinese models could be adopted on a par with, or even more widely than, those in the US.

In such a scenario, the contest would shift from technical superiority to control over the standards, ecosystems, and governance models embedded in global digital infrastructure.

As Microsoft President Brad Smith warned, “The No. 1 factor that will define whether the US or China wins this race is whose technology is most broadly adopted in the rest of the world. Whoever gets there first will be difficult to supplant.”

Beijing’s centralised, state-led model enables it to mobilise resources, align industry and exploit disruptive opportunities far more quickly than the US’s private-sector–driven approach. This agility could put Washington in a paradoxical position: technologically advanced, yet strategically outmanoeuvred.

For middle powers and emerging economies, the stakes are no less acute. Both Washington and Beijing export not just products but technological ecosystems that carry political influence.

Alignment with either superpower risks long-term dependency; avoiding both would require costly investment in domestic capacity—a politically difficult and time-consuming path.

Washington’s AI Action Plan implicitly presents its ready-made solutions as the pragmatic option. However, history shows that dependence on external providers often comes with strategic constraints.

Therefore, the concept of Sovereign AI—the capacity to develop, deploy, and govern a nation’s own AI systems without relying on foreign infrastructure—is gaining prominence.

Sovereign AI is not simply about technological pride; it is about ensuring control over where AI workloads run, how critical data is stored and used, and who ultimately has the power to switch those systems on or off.

In sensitive sectors—defence, intelligence, energy, and critical infrastructure—such autonomy could act as a strategic shield, insulating states from coercion, espionage, or supply-chain disruption.

Many countries are more tempted by the immediate option of choosing turnkey systems offered by Washington’s proprietary stacks or Beijing’s open-source platforms.

However, both options pose risks. US solutions often tie users into closed commercial ecosystems, while Chinese offerings, although open in form, can establish deep structural dependencies that are hard to undo.

The real question is not simply which superpower will “win” the AI race, but whether the rest of the world can muster the capacity—and the political will—to carve an independent path.

Otherwise, sovereignty in the digital era may become the first casualty of great-power competition.

This article was originally published by TRT World on August 15, 2025. The views expressed herein are solely those of the author and do not necessarily reflect the views or editorial stance of TRT World.

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“As Europe’s biggest economy moves beyond pacifism on paper, it remains trapped between the habits of the past and the demands of a more dangerous world.”

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Russia’s 2022 offensive in Ukraine represented the most significant break in European security since World War II, signalling a decisive departure from the post-Cold War order.

While Europe has endured numerous crises over the years, none has so fundamentally shattered the continent’s assumptions of peace and stability.   

The incursion not only breached the long-standing principle of inviolable borders but also brought back the spectre of a major war into Europe’s heartland. 

The illusion of protection from large-scale conflict—once widely believed across much of the continent—collapsed suddenly, prompting a reassessment of national security doctrines.  

In response, states that had long depended on the protective umbrella of others are now facing a harsh new reality, leading to urgent efforts to rebuild their defensive capabilities. The change is not just reactive; it signifies a deeper reconsideration of strategic autonomy and resilience.   

Uncertainty over US security commitments, China’s assertiveness, energy dependencies, increasing cyber vulnerabilities, and intensifying political fragmentation within the EU have all heightened Europe’s strategic unease.   

No country has experienced this rupture more viscerally than Germany. 

For over thirty years, Berlin built its prosperity on an export-driven model powered by cheap Russian gas, while leaving its deterrence to NATO and allowing the Bundeswehr to weaken.

That delicate balance fell apart in 2022. 

Germany now faces an existential threat. The ontological foundations of its post-war identity—as a civilian power with a deep aversion to militarisation—have become increasingly untenable. 

Reconstructing that identity requires more than mere adaptation. It demands a deliberate break with the past—and a willingness to forge a new role in a much less forgiving world.  

Otherwise, if existential anxiety remains unresolved, Germany faces paralysis: a state caught between normative ideals and strategic needs, unable to act decisively in an era that punishes hesitation. 

Material commitments and strategic ambiguity

In the aftermath of Russia’s offensive in Ukraine, Germany has undertaken its most ambitious military overhaul since WWII. The extent of investment, institutional reform, and symbolic acts is notable.   

Yet behind the surge in spending and political rhetoric, a fundamental question remains: is this a genuine strategic reorientation—or a series of reactive measures under pressure?   

For decades, Berlin’s defence stance relied on two closely linked pillars: a civilian power role based on diplomacy, restraint, and legalism; and a geo-economic power identity rooted in the belief in the civilising force of commerce.

And nowhere was this more evident than in its relationship with Russia.

Within this framework, affordable Russian gas was more than just an economic resource—it upheld Germany’s self-image as a responsible player within a stable international order. 

This dual role, although coherent in theory, posed a strategic contradiction in practice. Germany appeared as a reluctant power—hesitant to project force, cautious of leadership, and slow to make commitments.

Paradoxically, this very reluctance offered a form of ontological security: it allowed Germany to reconcile its NATO commitments with ongoing economic relations with Moscow.

However, the binary confrontation triggered by the Russian military attacks in Ukraine shattered that balance.   

The consequences have been extensive. Then-chancellor Olaf Scholz’s Zeitenwende speech in February 2022 marked a turning point, quickly followed by a constitutionally protected €100 billion fund to modernise the Bundeswehr.   

Germany is now on track to increase its annual defence budget to €162 billion ($191B) by 2029—a 70 per cent rise from 2025 levels—potentially making it Europe’s largest military spender. 

Core defence outlays are projected to reach 3.5 per cent of GDP, significantly above NATO’s 2 percent benchmark.   

To finance this shift, Chancellor Friedrich Merz has introduced constitutional reforms that relax Germany’s long-standing fiscal constraint known as the debt brake.

Up to €1 trillion ($1.2T) in borrowing has been authorised over the next decade for defence and infrastructure, breaking with decades of debt aversion. A €380 billion ($448.4B) package is already designated for military modernisation through 2029.   

Equally notable is Berlin’s effort to break cultural taboos surrounding military power. These taboos are deeply rooted in Germany’s Nazi past.

The post-1945 'never again' ethos turned anti-militarism into a defining feature of national identity, viewing the use of force not just as a strategic decision, but also as a significant moral risk.

In 2024, Germany held its first official veterans’ commemoration since World War II. A long-overdue national security councilwas created, fulfilling a campaign pledge by Merz.  

And in a historic first, Germany started its first permanent foreign deployment to Lithuania—marking the first overseas peacetime deployment of its forces since WWII. 

Yet despite the momentum, doubts remain. Critics claim that key decisions—such as cutting Russian gas, sending Leopard tanks to Ukraine, and purchasing F-35s—were influenced more by external pressure than by strategic vision.

Germany’s defence procurement system continues to be slow and inefficient, raising concerns about its capacity to effectively implement projects.   

And despite the rhetoric of transformation, it remains unclear whether the ‘Zeitenwende’ signifies a fundamental shift in strategic thinking—or merely a necessary response to a deteriorating status quo. 

The social limits of strategy

Germany’s post-2022 defence transformation has been politically bold and materially expansive. But while budgets have increased and military plans have accelerated, the strategic culture supporting this change remains underdeveloped.  

The ‘Zeitenwende’—now more than two years old—has unfolded less as a coherent national strategy and more as a series of elite-driven, reactive responses to external shocks. What is still missing is a fundamental alignment between military ambition and societal consent.  

The clearest sign of this gap is in the manpower issue.

While the Bundeswehr plans to grow from 182,000 to 260,000 soldiers by the mid-2030s, and reserve forces are to increase from 60,000 to 200,000, planners face a harsh reality: a population that is increasingly disengaged from the armed forces.   

The 2011 abolition of conscription under former chancellor Merkel was not just a policy change—it reflected a cultural consensus that the military should remain peripheral to German civic life. That consensus has not yet been meaningfully reversed.  

The newly approved voluntary military service programme aims to recruit up to 40,000 young people each year by 2031 and will require all 18-year-old men to undergo medical assessments—even those not planning to enlist. However, early signs suggest resistance rather than enthusiasm.   

Recent polling indicates that only a third of Germans aged 18–29 support reinstating conscription. Among younger Germans, concerns about a potential draft are increasing—evidenced by a rising interest in how to legally avoid service.  

This recruitment hesitancy is worsened by the government’s failure to reconnect with former conscripts because of outdated record-keeping and data protection laws. Defence Minister Boris Pistorius has already stated that if the volunteer model fails, conscription will be reinstated.  

This is more than a personnel dilemma—it is a warning sign about the limits of transformation without participation. A better-equipped Bundeswehr will not be a more credible deterrent if it lacks social legitimacy.  

Defence expenditure is expected to reach €162 billion ($191B) by 2029, and Germany is progressing towards meeting NATO’s new target of dedicating 5 percent of GDP to defence.

However, these financial commitments alone cannot fill the strategic void created by public indifference and political division. 

The implication is clear: without a societal ‘Zeitenwende’—a broad recalibration of how Germans understand risk, power, and responsibility—material improvements risk reinforcing, not resolving, Germany’s status as a reluctant power.  

A state can announce brigades and purchase F-35s, but if it cannot convince its own citizens of the legitimacy of force, it remains strategically incomplete. Germany’s challenge is not simply to spend—but to engage. Not just to arm—but to align.  

Without a corresponding shift in strategic culture and societal consent, increased funding and high-profile procurements will simply produce a better-equipped version of the same reluctant power, not a truly independent and responsible actor.

This article was originally published by TRT World on September 15, 2025. The views expressed herein are solely those of the author and do not necessarily reflect the views or editorial stance of TRT World.

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As the war in Ukraine continues and geopolitical tensions sharpen across multiple fronts, the continent is being forced to confront a reality it had long hoped was behind it: security can no longer be taken for granted.

For years, Europe’s defence posture rested on two assumptions. The first was that large-scale war on the continent had become nearly unthinkable. The second was that the United States would remain the ultimate guarantor of European security. Both assumptions now look increasingly fragile.

The return of war to Europe’s neighbourhood, coupled with growing uncertainty about the long-term durability of the transatlantic security umbrella, has triggered a profound reappraisal across the continent. Europe is no longer merely debating how much it should spend on defence. It is also grappling with a deeper question: how does a society that has grown accustomed to peace recover a strategic mindset?

That is not an easy transition. Europe’s post-war political culture was shaped by the trauma of the Second World War and, later, by the relative stability that followed the end of the Cold War. Over time, military risk receded from public consciousness. Defence budgets were cut, armed forces were reduced, and resources were channelled into welfare, development, and economic modernisation. In many European societies, pacifism ceased to be simply an ethical position and became part of the political mainstream.

This legacy still matters. Major European states such as Germany, France, the United Kingdom, and Spain no longer maintain conscription, and decades of strategic demobilisation cannot be reversed overnight. Europe may now be willing to rebuild its military capacity, but physical rearmament is only one part of the challenge. Equally important is a mental and doctrinal shift: moving from a culture of risk aversion to one of preparedness, deterrence, and resilience.

Yet Europe’s path back to strategic seriousness may not lie solely in reviving traditional models of military power. It may instead depend on how effectively it can harness the technologies that increasingly define modern conflict.

Warfare Has Changed — and Europe Must Change With It

The nature of war is being transformed by digital systems, artificial intelligence, data infrastructures, autonomous platforms, and advanced software. Military strength is no longer measured only in tanks, fighter aircraft, or troop numbers. It is increasingly shaped by algorithms, sensors, communications systems, cyber capabilities, electronic warfare tools, and the speed at which innovation can be deployed.

In this new environment, dual-use technologies have become central.

The concept of dual-use is not new. For decades, innovations developed in the military sphere found civilian applications. Many technologies that later became embedded in everyday life emerged from defence-related research. But that flow is now being reversed. Today, the civilian sector is often the true engine of technological innovation, and the military sphere is adapting commercial breakthroughs for strategic use.

This shift has major implications for Europe. It means defence capability no longer depends exclusively on conventional arms manufacturers or state-led military research. It increasingly depends on start-ups, software engineers, data scientists, universities, and civilian research ecosystems. The decisive technologies on today’s battlefield are often not produced in traditional arms factories, but in innovation hubs, laboratories, and tech firms.

That is why Europe’s future defence capacity will be shaped as much by its ability to integrate civilian innovation into strategic planning as by its willingness to increase military spending.

The Strategic Value of Dual-Use Innovation

For Europe, dual-use technologies offer more than just an additional layer of capability. They may provide the fastest and most realistic route to strategic adaptation.

Unlike traditional defence procurement, which is often expensive, slow, and bureaucratic, dual-use innovation can be agile, scalable, and rapidly transferable across sectors. This matters in a security environment where speed increasingly determines effectiveness. Low-cost, adaptable, and intelligent systems can sometimes outperform larger and far more expensive platforms burdened by lengthy procurement cycles.

Examples of this shift are already visible. German firm Quantum Systems develops drones that can serve both civilian and military purposes. Helsing, one of Europe’s most prominent defence-tech companies, has built its model around AI-enabled systems ranging from battlefield software to autonomous capabilities. These are not traditional defence firms in the classical sense, yet they are becoming central to Europe’s security landscape.

This reflects a broader truth about modern war: the most strategically relevant actors are no longer only states and conventional defence contractors. Civilian technology companies now play an increasingly decisive role in shaping military effectiveness.

Europe’s Real Challenge Is Not Only Material — It Is Psychological

There is, however, a deeper issue at stake. Europe’s challenge is not merely technological or industrial. It is psychological.

A continent that spent decades distancing itself from military logic must now rediscover the language of power without abandoning the values that define it. That requires more than new budgets and procurement plans. It requires a cultural shift in how security is understood: not as an outdated preoccupation of the past, but as a necessary condition for political sovereignty and social stability.

In this sense, Europe’s rearmament debate is not simply about building more weapons. It is about rebuilding strategic confidence.

Dual-use technologies are likely to play a crucial role in that process, because they sit at the intersection of innovation, economic strength, and defence capability. They allow Europe to draw on existing technological excellence and convert it into strategic relevance. But even that will not be enough unless Europe also overcomes its long-standing reluctance to think in terms of hard power.

The continent’s transition from passivity to preparedness will depend not only on what it can produce, but on whether it is willing to think differently about security itself.

Europe’s security reckoning has begun. The real question now is whether it can move fast enough — intellectually, politically, and technologically — to meet the demands of a more dangerous world.

It is obvious that space is gradually becoming a new era of competition. From the internet to GPS, agricultural production forecasting to daily communication, space technologies have a lot to offer for the betterment of daily life, as well as improvement and efficiency of economic activities. On the other hand, the space domain is also considered crucial for the military industry and competitiveness. Space technologies gradually attract more and more interest from the military sector as they offer several vital capabilities like earth observation, monitoring, surveillance, tracking, and signalling. Fast-developing space technologies require big powers to have a skin in the game and keep up with the latest advancements. A strong presence and capabilities in the space industry are indispensable for any country in the pursuit of superiority in the global arena.

With all this in mind, the so-called global north now has a formidable and powerful competitor in the global space race: China.

Our current research at Oxford Space Initiative is an attempt to frame the extent to which China leverages dual-use technologies to strengthen its position in the global space race.

The term dual use refers to technologies that can be used both for civilian and military purposes. Especially in the military industry, several technologies can be used both for civilian and military purposes. A satellite, for example, can be used both for monitoring agricultural production and military sites.

For instance, China’s BeiDou Navigation Satellite System (BDS) is used both for civilian and military purposes. China’s BeiDou is considered a major rival to US’s Global Positioning System (GPS), achieving full global coverage in 2020.

Given this background, in our report, we particularly examine the following questions:

1. What are the primary strategic motivations that drive China’s implementation of the dual-use in its space technology development?

2. How does the Chinese government leverage organizational structures and policies to integrate private sector participation and military expertise into dual-use space programs?

3. Which specific technologies or space systems are particularly important for dual use in the Chinese space sector? What are the strategies that China implements to support these specific technologies?

4. How is China leveraging dual-use-space initiatives globally to support key external strategies like the Belt and Road Initiative (BRI) and the expansion of China’s international influence?

5. Despite the rapid advancement fostered by Military Civil Fusion and Dual Use, what key technological and operational deficiencies indicate a gap between China’s space capabilities and those of established space powers like the United States?

We will continue to publish blog posts addressing the questions mentioned above.

Stay tuned!

In late July 1993, a Chinese civilian container ship (The Yinhe) was sailing through the Indian Ocean. The ship’s crew had no idea that this voyage would later be remembered as one of the events that prompted China to accelerate the development of its own satellite navigation system, BeiDou.

The Yinhe was scheduled to travel to Kuwait, with stops in Singapore, Jakarta, and Dubai. But it never reached those destinations.

Suddenly, international media began reporting a dramatic story: the U.S. government, via the CIA, claimed that the Yinhe was carrying materials that could be used to produce chemical weapons. According to U.S. intelligence, the ship’s final destination was Iran. Washington pressed Middle Eastern ports to deny docking rights to the Yinhe — and one by one, ports across the region refused entry.

China vehemently rejected all allegations and initially refused to allow any inspection of the vessel, not anticipating that the U.S. held a powerful leverage point: control over GPS.

After China denied inspection, the U.S. allegedly disabled or jammed the Yinhe’s GPS navigation support, leaving the large container ship essentially “blind” in the middle of the ocean. As a result, it drifted and remained stranded on the high seas for twenty-four days, unable to navigate safely until China ultimately agreed to inspection.

During this period, the crew suffered shortages of water, fuel, and basic supplies. Eventually, following protests from Beijing and a joint Saudi–U.S. inspection that found no chemical-weapon precursors on board, the ship was cleared and allowed to return to China.

The incident became a turning point. It prompted China to fundamentally rethink its supply-chain security and accelerated its efforts to build an independent satellite navigation system — later known as BeiDou.

The Yinhe affair exemplifies how external constraints and security risks partially motivated China to pursue autonomy in space-related dual-use technologies.

Today, China has a clear ambition not only to rival the United States but also to present itself to the Global South as a capable, independent space power. This raises important questions:
What drives China to pursue such an ambitious dual-use strategy in space? What are the strategic motivations — domestic and external — that have shaped the implementation of its Military-Civil Fusion (MCF) strategy in space technology development?

In this blog post, we examine China’s motivations to challenge the space dominance of the United States and the broader Global North, particularly in dual-use technologies and critical space infrastructure.

A foundational motivation is China’s desire to avoid “single-point” dependencies — such as reliance on foreign GNSS systems, advanced sensors, and key semiconductors — that could be denied during a crisis. Strategic autonomy in navigation, timing, and space-based services reduces operational vulnerability for both civilian and military systems. The Yinhe incident is widely cited in Chinese policy discourse as a humiliating episode that underscored this vulnerability and helped catalyze the quest for indigenous satellite navigation.

Military modernization is another central driver. China regards space capabilities — navigation, surveillance, communications, remote sensing — as force multipliers. Integrating civilian R&D and commercial industrial capacity shortens technology cycles and speeds the development of advanced dual-use systems for the People’s Liberation Army. Xi Jinping elevated MCF to a national-level strategic priority in 2015, explicitly linking civilian technological innovation and industrial strength to national defense objectives.

At its core, China’s MCF strategy in space is motivated by national ambitions for technological and military leadership, while U.S. restrictions and international scrutiny act as significant external drivers and constraints. MCF is central to Xi’s broader vision of the “great rejuvenation of the Chinese nation,” which seeks to make China wealthy, strong, and globally respected by mid-century. The goal is to transition from a “major space power” to a “strong space power” capable of rivaling or surpassing the U.S. in space capabilities.

China also views space technologies as vital for national security, economic growth, and international prestige. Possession of global navigation capacity and ground-station networks gives China considerable leverage abroad and enhances its geopolitical influence. Control over space-based infrastructure is not only a strategic asset but also a tool for diplomacy and soft power. Systems such as BeiDou, along with indigenous launch capabilities and remote-sensing networks, strengthen China’s ability to expand its influence through commercial partnerships and civil diplomacy while contesting U.S. technological predominance.

Another important motivation involves using dual-use technologies to activate the entire national innovation ecosystem. China’s MCF strategy is designed to create a platform that links military and civilian sectors, enabling the transfer of mature technologies across domains. This integrated approach is believed to catalyze innovation, accelerate commercialization, and promote economic development. The underlying philosophy is that military and civilian technological advances can be mutually reinforcing.

Finally, China considers export controls, technology denial, and sanctions to be serious long-term threats to national security. Since the early 2000s — and especially after the mid-2010s — U.S. export control regimes (ITAR, EAR, Entity List) and allied measures have tightened restrictions on China’s access to advanced semiconductors, precision fabrication tools, space components, and mission-critical software. These constraints created what Chinese strategists increasingly view as an unbearable strategic dependence on foreign suppliers, thereby incentivizing the rapid development of domestic alternatives.

In essence, China — much like the United States and European countries — views its space program through a dual-use lens that deliberately links military necessity and civilian prosperity. Technological innovation is treated as mutually reinforcing across both sectors. Through MCF, China ensures that advances in the strategic space domain generate significant technological and economic benefits for the civilian economy, while civilian innovations simultaneously strengthen military capabilities.

Resources:

Can, M., & Vieira, A., 2022. The Chinese Military-Civil Fusion Strategy: A State Action Theory Perspective. The International Spectator, 57, pp. 85–102. https://doi.org/10.1080/03932729.2022.2080262

E, C., & Arrow, U., 2023. Modernization and the Military-Civil Fusion Strategy.

Nie, M., 2020. Space Privatization in China’s National Strategy of Military-Civilian Integration: An Appraisal of Critical Legal Challenges. Space Policy, 52, pp. 101372. https://doi.org/10.1016/j.spacepol.2020.101372

Masuo, C., 2021. China’s “National Spatial Infrastructure” and global governance: Chinese way of Military–Civil Fusion (MCF) over the ocean. Maritime Affairs: Journal of the National Maritime Foundation of India, 17, pp. 27–42. https://doi.org/10.1080/09733159.2021.2024383

Bitzinger, R., 2021. China’s Shift from Civil-Military Integration to Military-Civil Fusion. Asia Policy, 28, pp. 24–5. https://doi.org/10.1353/asp.2021.0001

Pollpeter, K., 2020. China’s Space Program: Making China Strong, Rich, and Respected. Asia Policy, 27, pp. 12–18. https://doi.org/10.1353/asp.2020.0027

Wu, X., & Long, J., 2022. Assessing the Particularity and Potentiality of Civil–Military Integration Strategy for Space Activities in China. Space Policy. https://doi.org/10.1016/j.spacepol.2022.101514

Pollpeter, K., 2023. Innovation in China’s space industry: overcoming decoupling. Asian Security, 19, pp. 114–128. https://doi.org/10.1080/14799855.2023.2256241

Duchâtel, M., 2023. Europe’s China Problem: How Not to Feed Beijing’s Military–Civil Fusion. Survival, 65, pp. 55–78. https://doi.org/10.1080/00396338.2023.2239059

Evron, Y., 2021. China’s Military-Civil Fusion and Military Procurement. Asia Policy, 28, pp. 25–44. https://doi.org/10.1353/asp.2021.0002

Jash, A., 2020. China’s Military-Civil Fusion Strategy: Building a Strong Nation with a Strong Military, 13, pp. 42–62.

Yang, Z., 2021. Opening Up While Closing Up: Balancing China’s State Secrecy Needs and Military-Civil Fusion. Asia Policy, 28, pp. 45–64. https://doi.org/10.1353/asp.2021.0003

Rome, N., 2023. China’s Space Export Strategy. Space Policy. https://doi.org/10.1016/j.spacepol.2023.101574

Military-civil fusion will strengthen China’s military. Emerald Expert Briefings. https://doi.org/10.1108/oxan-db254866

Sarjito, A., 2024. NATIONAL STRATEGY FOR DEVELOPING COMPETITIVE ADVANTAGE THROUGH MILITARY-CIVIL FUSION. Journal of Social Politics and Governance (JSPG). https://doi.org/10.24076/jspg.v6i1.1527

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Germany has announced its support for the defense industry to respond to growing security concerns and, at the same time, provide momentum to a weakening economy. To this end, large-scale investment plans have been launched. However, the question arises whether the defense industry in Germany has actually gained momentum as a result of these investment plans. To what extent have these investments contributed to strengthening defense capabilities while also unfolding measurable positive effects on the weak economic development?

Germany’s Industry and Security Under Pressure

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For several years, Germany has been trying to cope with significant challenges. In the past five years, economic growth has remained very limited. In the industrial sector, 300,000 jobs were lost. High energy prices, changed supply chains, and countries like China and Türkiye, which are industrializing rapidly, have weakened the competitiveness of German industry.

At the same time, Germany’s security policy environment is also changing today. In a country whose defense architecture depends heavily on the USA and which hosts some of the largest US bases in Europe, the perception of security is beginning to shift. The assumption that American support for European defense might not be as strong in the future as it was in the past has prompted Berlin to put the long-neglected defense industry and military spending back on the political agenda. On the other hand, the German defense structure has also been confronted with significant problems for years. Over the past decade, the Bundeswehr (German Armed Forces) has repeatedly been in the public eye due to the poor condition of its equipment.

As an answer to all these problems, comprehensive reforms in defense and security policy have been carried out in Germany over the past three years. The defense budget planned for 2026 has since grown to 108.2 billion euros. Berlin has pledged to invest significantly more in the domestic production of defense goods.

Berlin Invests Massively in Military Rearmament

In this context, very large investment packages were announced. Chancellor Merz stated that hundreds of billions of dollars in total are to be used for defense spending in the coming years. The government has committed to spending a total of 550 billion euros on defense between 2026 and the end of 2029, provided that military aid for Ukraine is included. With this policy, Germany wants to revitalize the production sector and the economy on the one hand and strengthen the country’s defense capabilities on the other.

Germany has thus moved up to fourth place among the world’s largest defense spenders—behind the USA, China, and Russia. In 2022, when Russian President Vladimir Putin began his full-scale invasion of Ukraine, Germany was still in seventh place. But this is exactly where the real question begins: How effective are these large-scale investments actually when it comes to setting the economy in motion and increasing defense capability?

A look at the details of the German defense budget shows that a significant portion of the budget is earmarked for the purchase of weapons. Which weapon systems are these, and is it already clear where they will come from? Yes, this is largely known. As part of the modernization of the German armed forces, around 14 billion dollars have been allocated for F-35 fighter jets to be procured from the USA, and another approximately 7 billion dollars for Patriot air defense systems. If helicopters and ammunition are added, payments for US products are likely to total more than 35 billion dollars.

Conventional Weapons Instead of a Technological Leap?

Israel ranks second in this massive supply chain with the sale of the Arrow 3 missile defense system worth around 6.7 billion dollars. The Arrow 3 contract was the largest single arms export in the history of the State of Israel.

Looking at individual expenditure items, it becomes clear that more than 35 percent of the enormous German defense budget flows to American and Israeli companies. Despite the scale of defense spending, this raises the question of the extent to which the resulting economic effects actually remain in Germany. In other words: the budget is growing, but it is not yet clear how much of it actually strengthens German industry, German manufacturers, and Germany’s technological capability.

Another point of criticism is that a significant part of the budget flows primarily into traditional defense goods. A government insider expressed concern that the Ministry of Defense is spending “a huge amount of money” on conventional weapons such as armored vehicles and fighter jets.

Arms Boom as an Escape for Industry?

In Germany, it is also evident that many companies want to use their existing infrastructure for the defense industry in light of the slowdown in automotive production. Numerous firms are therefore looking for ways to enter the arms industry. Particularly the weakness of traditional production sectors makes the defense industry a new way out. However, there is also a major problem here: a very large portion of the budget provided for defense flows only to certain large corporations.

In recent times, the general trend in the defense industry has been more toward promoting small and medium-sized enterprises (SMEs). This is because the most innovative technologies today often no longer come from established large corporations, but from startups and flexible technology companies. Nevertheless, in Germany, only a very small part of this large state budget flows to SMEs and startups. According to Moritz Schularick, President of the Kiel Institute, more than 95 percent of German defense spending since 2022 has flowed into “traditional legacy procurement.” For example, Rheinmetall alone has a massive order volume of about 30 to 40 billion euros in the area of ammunition and modernization of armored vehicles, while Airbus receives around 15 billion euros for new Eurofighter aircraft and systems. In the naval sector, TKMS (ThyssenKrupp Marine Systems) is signing contracts worth 5.5 billion euros for next-generation submarines, and the electronics group Hensoldt is collecting tenders for radar systems worth more than 3 billion euros. This picture shows that more than 70 percent of defense spending is concentrated directly on only four or five strategic companies.

Another problem for Germany in this process is the cumbersome procurement procedures and sluggish bureaucracy. In other words: the budget is there, but the procurement process and the operational readiness of the systems remain highly problematic. A report prepared for the Federal Ministry for Economic Affairs and Energy in 2023 explicitly emphasized that the military procurement system must be reformed and designed to allow for testing, rapid procurement, and flexible decisions. According to the report, existing procurement rules are adequate neither for rapid technological change nor for the conditions of high-intensity conflicts.

The Federal Audit Office (Bundesrechnungshof) also points to years of delay in the transition from procurement to actual capability generation. For example, sixteen years after the first K130 corvette was ordered for the German Navy, five corvettes have been commissioned, but it is still not possible to deploy drones from these ships. Yet this capability is now considered a fundamental necessity. This example clearly shows how slowly procurement processes run in Germany and how difficult it is even to integrate modern—now standard—technologies into the rearmament process.

Furthermore, the distribution of the defense budget is far from creating a competitive and innovative ecosystem. In Germany, Poland, and the United Kingdom, between 67 and 90 percent of total military procurement is accounted for by the ten largest contractors.

Germany’s Rearmament with Limited Innovation Impact

In the USA, on the other hand, the share of the ten largest contractors is below 40 percent, despite a significantly higher total defense budget. This difference points not only to the size of the budget but to structural differences in procurement strategy.

Another issue is how much of the defense budget is spent on research and development (R&D). The difference between the USA and Europe is evident not only in the weight of large companies but also in research, development, and startup capacity. Public spending on defense-related R&D in the USA is significantly higher than in European states, both in absolute terms and as a proportion of total public R&D spending.

Against this background, Germany’s rearmament appears at first glance to be a profound change, but the nature and distribution of the expenditures paint a much more complex picture. Yes, Germany is increasing its defense budget significantly. Yes, the country is undergoing a historic shift in security policy. However, a significant portion of these funds flows into foreign procurement, particularly to companies from the USA and Israel. The portion remaining domestically is, in turn, largely distributed among existing large corporations. Therefore, while the increase in defense spending strengthens certain military capabilities in the short term, it has so far contributed only limitedly to a broad-based industrial transformation and the building of a technology-driven new defense ecosystem in Germany.