Stepchild East Germany? West Germany in Particular Benefits from the Arms Boom

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According to the Stockholm Peace Research Institute Sipri, Germany is now the world's fourth-largest arms exporter due to the world's crises. But only the old federal states benefit from this.

Martin Kurczyk, former Major General of the German Armed Forces and now Chairman of the newly founded Central German Institute for the Security Industry (MISI) in Leipzig, believes that too little of the money is reaching the East German economy in terms of the arms boom. In his opinion, this must change! If only to reconcile the people in East Germany with the enormous defence spending of the federal government (108 billion this year alone), so to speak. It is unfair if this expenditure only reaches the old federal states in the form of added value. The aim should therefore be for investments to flow back to Central Germany in proportion to the size of the population. According to Kurczyk's calculations, this would be around ten percent of the value added generated in Germany. And there are hardly any concrete figures on the arms industry in eastern Germany. Nevertheless, the Federal Government was able to respond to a minor question from the BSW parliamentary group in 2024. It states that export licenses for armaments and weapons worth a good 2.2 million euros were issued for Saxony for the period from January to 15 October 2024. Around 7.9 million euros for Saxony-Anhalt and around 90 million euros for Thuringia. In comparison: the front-runner in the same period was Lower Saxony with 3.9 billion euros, followed by Baden-Württemberg and Bavaria with around 2.3 billion euros each.

But things are moving in the direction of armaments

The reasons for this are historical, explains Peter Scheben from the Federal Association of the German Security and Defence Industry (BDSV). The arms industry is traditionally more strongly anchored in the West. There are currently 16 member companies in Saxony. There are four in Saxony-Anhalt and seven in Thuringia. However, there has also been some movement recently, as the armaments group KNDS took over the former Alstom site for railroad carriage construction in Görlitz in 2025. Tank parts have been produced there ever since. And in Saxony-Anhalt, Rheinmetall AG plans to invest millions in its site in Silberhütte in the Harz Mountains. Last year, the company also took over the ammunition company Muni Berka in Dietersdorf (Mansfeld-Südharz district). Thomas Horn, Managing Director of Wirtschaftsförderung Sachsen (WFS), believes that there are now opportunities for the mechanical engineering, automotive technology, electronics and aerospace sectors, among others. The currently struggling automotive suppliers can also benefit, as Jens Katzek, Managing Director of the Automotive Cluster East Germany (ACOD), believes. This is because they are used to producing large quantities of components with high precision under a tight regulatory corset - as is the case in the defence industry. And the Thuringian Ministry of Economic Affairs believes that there is also sufficient potential for Thuringian companies to at least partially compensate for declining business areas in other sectors with armaments orders.

The chances of armament in the East are good

Interest appears to be immense, as an information forum organised by the Thuringian State Development Corporation last year was bursting at the seams. According to reports, almost 300 company representatives attended this event. Further forums and themed trips are therefore planned. There were also numerous inquiries about potential entry into the supply chains. At least that is what Saxony's top business promoter Thomas Horn said. Saxony-Anhalt's Ministry of Economic Affairs has already confirmed growing interest among automotive suppliers. The BDSV and the MISI are also reporting a consistently high number of new membership applications. For Kurczyk, however, it is not just business interest that is central to membership, but also the attitude of those interested. He therefore expects new members to be interested in using their expertise for Germany's security. However, the armaments industry should not be seen as a panacea for the crises of the time, but rather as another mainstay and compensation tool.