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Rheinmetall CEO urges EU to forge leaders in defense technology

Rheinmetall CEO urges EU to forge leaders in defense technology Photo: Rheinmetall CEO Armin Papperger (Getty Images)
Author: Liliana Oleniak

The head of Germany's largest military contractor Rheinmetall, Armin Papperger, has called on EU countries to abandon the advantage of national champions and create larger and more specialized defense groups to compete with American companies, according to the Financial Times.

He said that if Europe wants closer cooperation in the defense sector, countries need to specialize in different types of military technologies.

He remarks that it wouldn't make much sense if they were to choose the second or third-best technology just because one country wanted it. He added that it was the most difficult discussion they had at the governmental level and emphasized the necessity of having big companies in Europe.

European arms companies compete with each other, military budgets are controlled at the national level, and individual countries seek to retain control of strategic supply chains, factories, jobs, and technological advantages.

One example of successful cross-border cooperation is Europe's largest missile manufacturer, MBDA, owned by the British company BAE Systems, and the European aviation concern Airbus, which holds 37.5% of the shares, with the remaining share owned by the Italian company Leonardo.

EU defense

The issue of defense industry development has become very relevant for Europe in recent years. In particular, this is due to the full-scale Russian invasion of Ukraine and the need to help Kyiv.

In early January, European Commissioner for the Internal Market Thierry Breton proposed to create a €100 billion fund to develop the European defense industry.

Bloomberg also reported that the EU will strive to have half of its defense systems purchased within the bloc by 2025. Currently, most weapons are purchased from third countries.