German industry association warns of reform delays as Berlin advances defense deals

Germany’s mechanical engineering association, VDMA, has voiced dismay over ongoing federal coalition disputes, warning that delayed structural reforms threaten the country's industrial sector.

Despite political friction, Berlin is advancing major defense initiatives. The federal government agreed to acquire a 50 percent stake in defense contractor KNDS for €6.6 billion. Meanwhile, the Ministry of Defence banned Chinese-manufactured drones and vehicles from military facilities over espionage risks. High demand across the security sector was further evidenced by sensor manufacturer Hensoldt, which reported strong revenue forecasts alongside receiving 100,000 job applications.

On the fiscal front, a Ministry of Finance draft document revealed that Berlin will increase its loan to the Federal Employment Agency by €3 billion, bringing total federal credit support to €8.2 billion next year.

Sources: Der Spiegel, FAZ, Handelsblatt, Hartpunkt, Tagesschau