Germany’s draft 2027 budget proposes reducing munitions spending to approximately €9.6 billion. This represents a decline from the €11 billion allocated for 2026.
The reduction poses a challenge for Rheinmetall, the world’s largest producer of 155mm artillery shells. Investor concerns have already contributed to a 30% drop in the company’s share price this year.
The potential cut follows the termination of a major warship contract last month. German defense priorities are shifting toward drones and newer technologies over traditional tanks and artillery.
Some analysts have downgraded stock recommendations pending final budget outcomes. A German Defense Ministry spokesperson stated that ammunition procurement remains a priority despite the draft document.