BMI's Executive Summary

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In Q407 Germany's ruling Grand Coalition of the CDU and SPD parties experienced increasing tensions over a variety of issues, including whether to introduce a minimum wage and how to handle industrial disputes. With the SPD adopting more left-wing policies, BMI expects tensions with Chancellor Angela Merkel's CDU to continue into 2008. On the security front the government tightened its stance on trade with Iran, which was accused by the US of developing a nuclear programme for military ends, and there were warnings that Germany could become more of a target for Al Qaeda extremists because of its continuing role in Afghanistan.

Germany remains a key player in the international community, taking the lead in a number of regional issues, and retains strong international alliances through its membership of NATO, the EU and the UN. In addition, Merkel has sought to strengthen ties with the US. Whilst there are no major conventional military threats to Germany, it faces terrorist threats from radical Islamic groups. German intelligence services and security forces, whilst well-trained and well-equipped to combat such terrorist threats, lack the same experience as some of their European counterparts.

The German defence industry has grown over recent years, with an increased number of joint ventures enabling German-based companies to penetrate large markets more successfully. Recent legislative developments have provided greater protection of German technological intelligence. The new ThyssenKrupp Marine Systems began trading earlier in 2007 following the merger of ThyssenKrupp Werften and Howaldtswerke Deutsche Werft. In April 2007, the MAN AG industrial group sold its subsidiary MAN Mobile Bridges to Krauss-Maffei Wegmann (KMW). European aerospace group EADS has finally seen a conclusion to the intense power struggle between the French and German leading executives, but issues remain to be resolved over its current recovery programme.

Exports have increased significantly. Germany is exploring new avenues in Eastern Europe and the Asia Pacific region following recent successes in Australia, where it has become an established supplier. A continuing German inflation differential relative to the euro area average could result in short-term interest rates dampening the regeneration of domestic demand, which has been poor of late. In April 2005, the budgetary commission of the parliament approved the country's involvement in the transatlantic co-operation project the Medium Extended Air Defence System (MEADS).

Berlin remains the capital of one of the most prosperous and stable countries in Western Europe. It plays an active and significant role in the region and across the globe. Germany boasts the fourth largest armed forces in the region and one of the best equipped. The international deployment of German military forces is constrained under strict constitutional rules, but Germany's deployment in

Chapter 1 - Executive Summary

SWOT Analysis

Germany Political SWOT

Germany Security SWOT

Germany Defence SWOT

Germany Economic SWOT

Chapter 2 - Political Overview

Domestic Political Outlook

Healthcare Proposals Disappoint

Chapter 3 - Security Risk Analysis

BMI’s Security Ratings

Risk Ratings

Table: Germany Regional Risk Ratings

Table: Germany Regional Risk Ratings

Regional Security: Europe

Overview

Internal Terrorism

International Terrorism

Criminal Activities

Germany Security Risk Ratings

Germany Conflict Risk

Germany Terrorism Risk

Germany Physical Safety Risk

Chapter 4 - Security Overview

Threat Perception

Internal Security Situation

Domestic Terrorism

Crime

External Security Situation

International Terrorism

Chapter 5 - Military Structure & Defence Industry

Armed Forces

Table: Regional Armed Forces (including conscripted) 2006

Defence Posture

Defence Reform

Conscription

Constraints On Defence Capabilities

Constitutional

Budgetary

Societal

International Deployments

Table: Germany International Deployments

Co-Ordination And Joint Operations

Table: Selected Training Events/Exercises in which Germany took part in 2004:

Weapons Of Mass Destruction

Chapter 6 - Market Overview

Recent Changes

Arms Trade Overview

Exports

Imports

Industry Trends & Developments

Table: Key Players – Germany Defence Industry

Procurement Trends & Developments

Chapter 7 - Industry Forecast Scenario

Army Enlargements

Table: Army Enlargements

Army

Air Force (Luftwaffe)

Navy

Table: Government Expenditure On Defence Industry

Chapter 8 - Macroeconomic Forecast

First Quarter Recovery To Be Boosted By Q206 World Cup Effect

Table: Germany – Macroeconomic Forecasts

Chapter 9 - Company Profiles

EADS

Rheinmetall De Tec Group

Krauss-Maffei Wegmann

RUAG Aerospace Deutschland

Chapter 10 - BMI Forecast Modelling

How we generate our industry forecasts

Defence Industry

Sources

Chapter 11 - Appendix A: Security Ratings Methodology

Conflict Risk Methodology

Terrorism Risk Methodology

Physical Safety Risk Methodology

Overall Risk Rating

State Vulnerability Index Methodology

Competitive Landscape for European Defence & Security: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Defence & Security Sources

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BMI's European Defence & Security Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include: