Germany’s Scholz Commits to Achieving 2% NATO Spending Target

By Matthias Inverardi and Andreas Rinke

DUESSELDORF (Reuters) – German Chancellor Olaf Scholz stated on Monday that defense companies can rely on the government to increase military spending and fulfill its pledge to spend 2% of GDP on NATO defense.

Scholz’s remarks came in the wake of former U.S. President Donald Trump’s controversial suggestion that the United States might not defend NATO allies who fail to adequately invest in their own defense against a potential Russian threat.

During his presidency, Trump openly criticized nations that did not meet NATO’s defense spending target of 2% of GDP.

Scholz emphasized that Germany and the European defense industry must transition towards mass production of weapons, as the ongoing conflict in Ukraine has underscored the challenges faced by European manufacturers in meeting the rising demand for ammunition.

During a visit to the future site of Rheinmetall’s arms factory in central Germany, Scholz remarked, "We have to move away from manufacturing towards large-scale production of defense equipment." He stressed the need for further support for Ukraine from all European nations, highlighting that Germany alone cannot meet the requirements.

"This commitment to the 2% NATO target is urgently needed. The reality is harsh: we do not live in times of peace," he stated.

Scholz also called for European countries to consolidate their arms orders to assist the industry in fulfilling long-term commitments. He compared the predictability of car purchases to the unpredictability of arms production, noting that tanks and artillery systems are not readily available.

Rheinmetall, a leading manufacturer of artillery and tank munitions, has increased production following Russia’s invasion of Ukraine, which has intensified the demand for ammunition and left European suppliers struggling.

"The construction of our new factory is a direct result of the changing times," said Rheinmetall CEO Armin Papperger.

The facility, expected to commence production next year, is projected to produce around 200,000 artillery shells annually.

Rheinmetall plans to invest 300 million euros and create approximately 500 new jobs. The company aims to fulfill the Bundeswehr’s demand for domestically produced ammunition and ensure supply to partner nations during crises. The factory in Unterluess will cover the entire value chain for artillery ammunition.