German defense stocks plummet amid Ukraine aid freeze

Shares of German defense companies took a hit after reports in Frankfurter Allgemeine Sonntagszeitung (FAZ) that the finance ministry would not approve additional requests for military aid to Ukraine due to budgetary constraints.

According to Report, which cites RBC Ukraine, shares of weapons manufacturer Rheinmetall fell by 3%, becoming the biggest losers in the German blue-chip index Dax. Shares of Hensoldt, the producer of radars for the IRIS-T air defense system, and tank transmission manufacturer Renk dropped by 6% and 4%, respectively.

FAZ, citing a letter from the finance ministry dated August 5, stated that no new funding requests for Ukraine would be approved at the request of Chancellor Olaf Scholz. Approximately €8 billion has already been allocated for military assistance to Ukraine in 2024, and the budgeted €4 billion for 2025 has already been exceeded.