Addendum to the essay "Industrial Subsidy in Camouflage" of February 2026.
Eight months later: where Europe wanted to build together, the companies fought over ownership. Where something new arrived, the old ones followed.
In February, in “Industrial Subsidy in Camouflage”, we wrote that German arms procurement follows not the threat but the product catalogue of its own industry. We called for four things: a threat analysis that starts from the threat, European instead of national procurement, money for the technologies of the next war, and open tenders that give new suppliers a chance. Enough has happened since then to take stock.
The Joint Projects
On 8 June Friedrich Merz and Emmanuel Macron ended the joint fighter aircraft FCAS. A good three billion euros had been spent by then. It failed neither on the technology nor on the armed forces. According to ZDF, Dassault refused to share patents and sensitive know-how with Airbus, and even a personal conversation between the chancellor and the company’s chief changed nothing. In the end two questions remained open: who owns the technology, and who earns from it.
The joint main battle tank MGCS is faring no better. In early October France’s chief of the defence staff told parliament that Germany had pulled out. Both defence ministers contradicted him at once. Here too the dispute is not about the tank but about the shares of KNDS and Rheinmetall.
So our second demand did not fail because of Europe, but because of the way it was carried out. A joint project in which every national industry demands its share is not European procurement. It is the national industrial subsidy, only in European colours.
The Frigate
In June the Defence Ministry stopped the F126 frigate. The Dutch shipyard Damen had declared that it could not keep to schedule or budget. The first ship would have come in 2032 instead of 2028. The replacement is eight MEKO frigates from TKMS in Kiel. Damen is now claiming 4.7 billion euros in damages.
Militarily the decision may be right. It nonetheless confirms what we described in February. The question asked was not which ship the navy needs for which task, but who is still able to deliver at all. The answer was the manufacturer we wrote about then: TKMS builds frigates, so Germany buys frigates.
The Satellites
How much Europe’s armed forces depend on Starlink has been known since 2022. In October it became visible that this dependence can also be turned against its users: Ukrainian units reported sudden disruptions, and who ordered them has not been confirmed. The answer is two networks. The EU is building IRIS², from 2029, for more than 15 billion euros. Alongside it the Bundeswehr is planning a network of its own for eight to ten billion, with satellites from OHB and ground technology from Rheinmetall. There is no body that plans both together and decides whether the second is needed at all. The London institute IISS speaks of “an aggregation of national systems rather than an integrated operational architecture”.
The Drones
Here something genuinely new has happened, and in fairness it belongs in the account. On 25 February the Bundestag’s budget committee approved framework contracts for kamikaze drones with two young companies, Helsing and Stark. That is exactly our fourth demand: new suppliers win the contract, not the old ones.
The conditions are even more remarkable. Each company may initially call off at most one billion euros. Every further call-off needs the committee’s explicit approval, after the company has shown that it can deliver in series. And the ministry must report after six months on what has been delivered, at what price and with what competition. That is built-in feedback with a termination condition, as we described it in “Is Failure Built into the System?”. It came not from the ministry but from parliament.
Five weeks later the ministry asked the committee to order kamikaze drones from Rheinmetall as well, with an overall contract of around 2.4 billion euros. The new had barely arrived when the established player followed through the side door, with the largest single contract.
The Balance
Of our four demands, one has been partly met. Money is flowing into drones and space, 35 billion euros for space alone by 2030. A second had a beginning, open awards to new suppliers, and was watered down at once. European procurement broke apart wherever it was tried. A public threat analysis from which one could read why Germany needs frigates, tanks and a second satellite network still does not exist.
The pattern has stayed the same; it has only taken a new form. Where Europe wanted to build together, the companies fought over ownership. Where something new emerged, the old ones followed. And the only brake that held was a committee that set conditions.
The camouflage paint is flaking. Underneath stand the same names.
Further texts on the subject are collected in the Signpost to Defence and Armament.
Sources. ZDFheute, “Warum der deutsch-französische Kampfjet gescheitert ist”, 8 June 2026. · Euronews, “Verwirrung um deutsch-französisches Panzerprojekt MGCS”, 10 October 2026. · Naval News, “Germany is cancelling the F126 frigate project and procuring eight MEKO frigates”, 24 June 2026; SWZ Maritime, “Damen seeks EUR 4.7 billion over cancelled F126 project”, 5 October 2026. · Euronews, “Europe’s answer to Starlink: Who is building IRIS² and what is Germany’s role”, 16 October 2026; Atlas Institute, “IRIS² and the Satellite Race Europe Is Not Winning”, August 2026. · Augen geradeaus, “Bundestag gibt Mittel für Loitering Munition frei – unter Auflagen”, 25 February 2026; Tagesspiegel, “Verteidigungsministerium will offenbar auch bei Rheinmetall Kamikazedrohnen bestellen”, 31 March 2026. · hartpunkt, “Pistorius: 35 Milliarden Euro für Weltraum bis 2030”, September 2025.
To the essay: Industrial Subsidy in Camouflage. Why Europe's largest rearmament programme does not increase security.