New market conditions and "exit strategies" for the German arms industry. OSW Commentary No. 130, 12.03.2014

Due to changing internal and external conditions, the German arms industry is facing serious challenges as are its counterparts across Europe. The arms sales market in Germany is contracting – orders from the Bundeswehr are slowing down and the Federal Ministry of Defence is planning to change the way it cooperates with German arms producers. In addition, member states of NATO and the EU, major customers of German arms manufacturers, are reducing their defence spending, which will spell a fall in their orders for new armament and military equipment. In response to the new circumstances, the German arms industry is beginning to organise itself and increase its lobbying efforts in Berlin and, with the support of the federal government, it has been implementing specific measures in several areas. German companies are interested in securing new markets outside NATO and the EU and are also exploring opportunities for mergers and joint ventures with other German and foreign companies, and are seeking to create more conducive conditions for business on the EU and NATO markets.