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German defence stocks down after report of freeze on new Ukraine military aid
UKRAINE-CRISIS/GERMANY-ARMS:German defence stocks down after report of freeze on new Ukraine military aid
BERLIN, - German defence stocks fell on Monday, after the Frankfurter Allgemeine Sonntagszeitung newspaper on Saturday said the finance ministry would not approve additional applications for Ukraine military aid due to budget constraints.
Shares in weapons maker Rheinmetall were down 3% at 0923 GMT, the biggest losers in the German blue chip index Dax. Hensoldt, a maker of radars for IRIS-T air defence system and tank gearbox maker Renk were down 6% and 4%, respectively.
No new requests for money for Ukraine will be approved at the request of Chancellor Olaf Scholz, FAS reported on Saturday, citing a finance ministry letter from Aug. 5. The German chancellery and the finance ministry did not immediate reply to requests for comments.
Around 8 billion euros is already earmarked for Ukraine's military in 2024, and the budgeted 4 billion euros for 2025 is already overbooked, according to the weekly. "The pot is empty," FAS quoted a government source as saying.
The 2024 and 2025 budget plans have not changed, German government sources told Reuters. The planned financial aid for Ukraine would be halved to around 4 billion euros in 2025 because additional funds from the G7's $50 billion loan plan should be available from November, the sources said.
A spokesperson for Hensoldt said the FAS report was "blown out of proportion" and that the firm did not see any backlash from it for its business.
The German government has said that instead of spending taxpayers' money, it wants to use proceeds from frozen Russian assets for further Ukraine aid, in coordination with its Group of Seven partners.
Budget negotiations between Germany's three-party coalition were difficult and protracted as large spending requirements for climate, social measures and infrastructure clashed with constitutionally enshrined limits for new debt.
Last month, the leaders of the Social Democrats, the Greens and the Liberals agreed on a 481 billion euros draft budget and only on Friday reached a deal to narrow its deficit target.
This article was generated from an automated news agency feed without modifications to text.
