Discussing a new outlook for Malta’s defence strategy

Foreign Affairs Minister Ian Borg noted during a live debate that the Maltese public is still hesitant to invest in defence, even as it continues to expect protection from the European Union if necessary. He cited survey results indicating that while citizens oppose Malta contributing to EU defence spending, they still want the bloc to defend the country in times of need. The minister added that successive Maltese governments have managed to maintain the country’s neutrality while modestly contributing through humanitarian aid, describing this approach as a delicate but consistent balance. While, the European Union was founded as a peace project, however, since the adoption of the Maastricht Treaty and the progressive development of an EU common foreign and security policy, the peace project is slowly mutating, seeking to transform the EU from a civilian power to a military power.

Some argue that rising militarism and a growing appetite for conflict are reshaping the EU in ways they find unacceptable. Faced with all these developments, Malta as a neutral country will face tough choices in the foreseeable future.

What are other EU members doing in their countries to beef up defence spending? To start with, in recent years, Germany has embarked on one of the most significant military modernisation efforts in its post‑Cold War history. Driven by shifting geopolitical realities and the need to strengthen both national and European security, the country is rapidly expanding its defence industrial base.

This expansion goes beyond merely acquiring weapons systems, it also involves large‑scale investment in the domestic production of such components, technologies, and industrial capacity essential for modern warfare. Germany has committed €355 billion through 2041 for new military equipment, on top of a €100 billion special fund.

Apart from munitions, there is a vast expansion in expenditure consisting of combat vehicles, communications and electronics. These categories include thousands of components – sensors, armour systems, electronics, propulsion parts, and more – produced by German industry. By comparison, France’s defence priorities, as outlined in its 2025 National Strategic Review (RNS) and the updated 2024-2030 Military Programming Law (LPM), emphasise strategic autonomy, high-intensity warfare readiness, and a balanced “complete army” model. This contrasts with many other EU countries, which focus more narrowly on territorial defence or specific capability gaps.

Back to Germany, we observe a transformation in its long‑term financial commitment. Berlin has allocated €355 billion through 2041 for new military equipment, supplemented by a €100 billion special fund established after Russia’s invasion of Ukraine. A substantial share of this funding is directed toward categories that rely heavily on component manufacturing – munitions, combat vehicles, communications systems, and logistical equipment. Germany’s strategy also emphasises strengthening domestic defence manufacturers.

Approximately €182 billion in upcoming procurement projects are tied to German companies, with Rheinmetall emerging as a particularly prominent beneficiary. The company appears in more than 50 procurement lines worth over €88 billion, covering armoured vehicles, ammunition, weapons systems, and the specialised components that enable them.

This approach reflects a deliberate effort to ensure that critical technologies from fire‑control systems to missile housings are produced within Germany’s borders. The expansion of component production is especially visible in several key areas. In the field of munitions, Germany has placed orders for thousands of DM22 anti‑tank mines and is replenishing ammunition stocks depleted by support to Ukraine.

In ground systems, the procurement of FLW 100 and FLW 200 remote weapon stations requires domestic manufacturing of optics, stabilisation mechanisms, and electronic subsystems. Germany is also investing heavily in advanced electronics, including explosion‑proof GPS receivers and thermal imaging sights, which demand sophisticated microelectronics and ruggedised engineering.

As can be expected, we note how air defence has become another priority. Germany is constructing a layered air‑defence network centred on systems such as the domestically-produced IRIS‑T SLM, which requires local production of missile bodies, seekers, launchers, and radar components. Even when integrating foreign systems like Arrow 3 or Patriot, Germany invests in domestic infrastructure and electronic support systems to ensure operational independence.

Beyond traditional weapons, Germany is channelling resources into emerging technologies. Investments in loitering munitions, drone swarms, radar satellites, and laser‑based weapon prototypes signal a commitment to future‑oriented capabilities.

These programmes rely on advanced optics, AI-enabled power systems, and digital components – areas where Germany aims to build long-term industrial expertise. Underlying all these efforts is the National Security and Defence Industry Strategy, which seeks to reduce reliance on foreign suppliers and reinforce Germany’s role as a capable and autonomous defence producer.

The strategy includes incentives for local manufacturing, streamlined procurement processes, and support for dual‑use infrastructure that enhances military mobility. By investing not only in finished systems but also in the components and industrial capacity behind them, Germany is positioning itself as a central pillar of European defence. The result is a more resilient supply chain, a revitalised industrial base, and a military better equipped to meet the challenges of an increasingly uncertain security environment.

In conclusion, tiny Malta is faced with realities of the war in Ukraine, the conflicts in the Middle East and the Gulf, so it must wisely prioritise resilience, diversification and diplomacy. Such objectives ought to be focused towards achieving an economy capable of withstanding future economic shocks while seizing opportunities in expanding its GDP levels.

George M. Mangion is a senior partner at PKF Malta