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 Conflict in Ukraine drives German tank orders, - Financial Times

Nato’s eastern European members are displaying “concrete interest” in buying German heavy weaponry, one of the country’s largest defence groups has revealed, as the Ukraine conflict exposes gaps in conventional deterrence.

Frank Haun, chief executive of KMW, the Munich-based manufacturer of the Bundeswehr's Leopard tank, has told the Financial Times, Censor.NET reports.

"In the eastern EU and Nato countries, there is very concrete interest in the establishment or upgrading of specific capabilities. Nato is aware of the deficiencies in its conventional deterrent capability," he said. Military action by Russian-backed groups against Ukrainian government forces has started to nudge policymakers back towards weaponry designed to resist a land assault, manufacturers and analysts added.

Watch more: Antitank weapons system 'Stugna' began service with Ukrainian Army. VIDEO

For Rheinmetall, the Düsseldorf-based defence and automotive company that supplies the cannon, ammunition and firing system for the Leopard tank, the Ukraine crisis has also spurred procurement.
Rheinmetall said: "Ukraine has given defence a political shove." Defence sales grew by 18 per cent to €1bn in the first half of this year, while Rheinmetall's operational loss fell from €52m to €27m, according to interim results published this month. The group is anticipating sales of €2.4bn for its defence division this year, at the upper end of its previous forecast.
KMW's turnover declined from €790m in 2013 to €750m last year, but the company is privately held and does not disclose more up-to-date sales or profit figures.

Until recently, all of Germany's defence contractors had been suffering from years of dwindling EU military spending despite collectively being the largest arms exporters after the US, Russia and China.
Ursula von der Leyen, Germany's defence minister, said earlier this year that the country's defence priorities had to shift in response to Russia's "hybrid conduct of war".

Read more: Trains delivered new convoy of Russian tanks to Ukrainian border. PHOTOS

Ukraine has prompted Germany and other Nato countries to review their land forces, paying closer attention not just to tanks but to armoured vehicles that can be used to deploy troops rapidly.

Henrik Heidenkamp, a defence researcher at the Royal United Services Institute in London, said: "What Ukraine, and basically Russian policy behaviour, has done is to highlight to German policymakers that there is a need to think more constructively about how to strengthen the German defence industry."
Dr Heidenkamp said: "There is a tension between the wish on the government's part to strengthen the German defence industry and still have a restrictive export policy. This tension cannot be resolved."

 
 
 
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