German finance minister wants to boost defence industry

FILE PHOTO: German Finance Minister Christian Lindner attends the weekly cabinet meeting at the Chancellery in Berlin, Germany February 7, 2024. REUTERS/Liesa Johannssen/File Photo

By Andreas Rinke

MUNICH (Reuters) – German Finance Minister Christian Lindner said on Saturday his his government will ease red tape for investments into defence companies as Berlin ramps up its military spending in the face of the Ukraine war.

Speaking on the sidelines of the Munich Security Conference, Lindner told Reuters his government wanted to work to reduce the stigma for some investors to put their money into defence companies.

Chancellor Olaf Scholz’s government had promised to rapidly increase defence spending after Russia invaded Ukraine in 2022, in what Scholz dubbed a “Zeitenwende” – or a new era for the country facing global security threats.

Germany this week said it would meet a NATO alliance target of spending 2% of its gross domestic product on defence for the first time since the end of the Cold War, and urged other countries to match the U.S. in financially backing Ukraine.

Lindner said a second “Zeitenwende” was needed to improve the framework conditions for the defense industry in Germany.

“The state is a client and customer of the security and defence industry, but the companies still need private investments and financing,” he said.

“That’s why a second turning point is necessary that improves the reputation and framework conditions for the industry.”

His ministry said the German government was holding discussions with representatives from the financial sector and the security industry on the sidelines of the Munich conference.

“We will reduce regulatory hurdles in the EU and Germany,” said Lindner, without specifying which ones.

“At the same time, there is a clear message that the federal government stands behind this sector. Banks, insurance companies and funds should no longer shy away from commitments because they fear for their public image.”

(Writing by Matthias Williams; Editing by Angus MacSwan)