Rheinmetall CEO Armin Papperger has come under attack from leaders of other military producers for understanding rearmament in terms of conventional defense systems like battle tanks and artillery, instead of promoting investments into drones, missiles, and AI. Thomas Enders, CEO of the Franco-German company KNDS, and a leading figure of the German Atlantic Society, has the view that ground-based systems are less important now, and that air-based systems are the ones of the future—as shown by Ukraine, as he argues. The Papperger camp is charged by its critics with being responsible for the fact that 95 percent of the 500-billion-euro special rearmament fund is earmarked for traditional military technologies.
The Kiel Institute of the World Economy published a paper titled “Time to be smart” in March, advocating a reassignment of military spendings—550 billion euros for all of Europe in 2026 (about 3percent GDP) along the following five points:
>Invest more in military R&D—Germany alone should quadruple its funding to 10 percent of the defense budget, or 10–15 billion euros per year—and also specifically procure innovations through agile and more autonomous procurement;
>Be prepared for high demand for weapons in the event of conflict by entering into capacity contracts that finance the industry’s maintenance of production facilities that can be ramped up quickly when needed;
>Learn from Ukraine by advancing defense industry integration with the most efficient and innovative regional security actor and increasing military aid to 5–6 percent of their defense spending;
>Centralize weapons procurement and harmonize production to create a European defense market that reduces costs through economies of scale and improves the interoperability of national armies as well as production planning;
>Issue joint Eurobonds to develop missing, highly capital-intensive military assets such as satellites, long-range missiles, or AI.
