The postwar architecture of Kiel is a historic reminder of the Baltic port city’s strategic importance as a wartime marine hub and its obliteration by Allied forces’ bombing.
Now the capital of Schleswig-Holstein, Germany’s northernmost state, is embracing a new marine era with a Canadian order of a dozen new submarines from a Kiel-based builder.
ThyssenKrupp Marine Systems (TKMS) beat a South Korean rival to secure the contract – estimated at about €20 billion – to build and service the 12 new submarines, just as Nato leaders gathered in Turkey to discuss defence spending.
“This is possibly the biggest arms deal in the history of the federal Republic,” said German chancellor Friedrich Merz of the Canadian submarine deal, calling it part of “building a more European Nato so that Nato can remain transatlantic”.
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But when Merz says European, increasingly he means German. After a year in office, the 70-year-old leader has concluded that Europe’s race to secure its peace and prosperity from Russian advances can be a profitable business for German arms and steel companies.
It’s certainly good news for TKMS, formed 20 years ago by steel giant ThyssenKrupp and spun off to create an independent company in 2025. Its model 212CD submarine is a joint-development of German and Norwegian navies and combines stealth with long range and flexible weapons payloads.
The contract to build and service the submarines will create about 1,500 jobs at TKMS shipyards in Kiel and Wismar, 150km east in the northeastern state of Mecklenburg-Vorpommern.
In Germany’s brave new security world, though, there is loss as well as gain. Last month, for instance, Merz pulled the plug on the FCAS fighter jet project, raising questions about the Franco-German alliance that previously underpinned major European security projects.
That Berlin is now spending about twice as much annually as Paris on defence has alarmed some in France and beyond. About €108 billion is in Germany’s defence budget this year, rising to around €153 million annually by 2029.
Last April, Germany published its first military strategy document in 80 years, part of what it calls its response to growing Russian aggression. Other moves to reverse years of decline in German armed forces capabilities include a YouTube youth recruitment channel and a long-overdue review of arcane procurement procedures.
For years, state auditors have described the latter as “organised disorganisation”, where spending more money on defence does not always mean securing more equipment.
That Germany’s defence ministry is spending record sums on arms, while simultaneously reforming the rules governing their procurement, has already seen some expensive U-turns.
Two weeks ago, federal defence minister Boris Pistorius cancelled an order of six new 166m frigates, set to be the “biggest battleships of the German fleet”, amid uncertain delivery dates and €2 billion spent so far.
Instead, Berlin is ordering eight new frigates at a total cost of €12.7 billion, including maintenance costs. The builder, once more, is TKMS in Kiel.
Complicating matters further are exponential prices increases from German arms manufacturers in recent years. Even government defence spokespersons have complained publicly that ThyssenKrupp, Rheinmetall and orders are “feathering their own nests”, claiming that prices “shoot up as soon as the customer is the Bundeswehr armed forces”.
And, amid its security spending spree, Germany’s political leaders have yet to have an awkward conversation with their own voters.
“One question is whether Germany can live up to its role as a leading European nation in Nato,” noted the Süddeutsche Zeitung daily this week. “The other question is whether Germany wants to live up this role.”
