Germany has spent $10B+ on Israeli defense since 2022. Arrow 3 ($6.5B), Spike ($2B), Heron ($1.2B), Lightning 5 ($350M), Elbit A400M ($260M). All three Israeli primes inside the Bundeswehr.
ISRAELI DEFENSE INDUSTRY · OLAM.BUSINESS
Germany has spent more than $10 billion on Israeli defense systems since 2022 — the largest bilateral defense procurement relationship Israel has ever built outside the United States. The anchor is Arrow 3 ($6.5 billion), but the pipeline runs deeper: $2 billion in Spike anti-tank missiles through EuroSpike, $1.2 billion in Heron TP drones under discussion, $350 million in Lightning 5 targeting pods for Typhoon fighters, $260 million in Elbit defensive systems for A400M transport aircraft, and a PULS rocket artillery evaluation that could add billions more. The Bundeswehr spent €315 million on Israeli weapons in 2025 alone — more than in the previous four years combined — and that figure excludes Arrow and Spike. Germany is not just buying Israeli defense. Germany is rebuilding its military around it.
The $10 Billion Deal Book
| System | Israeli Prime | Value | Status |
|---|---|---|---|
| Arrow 3 (original) | IAI | ~$3.5B | Signed Sept 2023. First battery delivered Dec 2025. |
| Arrow 3 (expansion) | IAI | ~$3.1B | Bundestag approved Dec 2025. IAI signed Jan 2026. |
| Spike ATGM | Rafael / EuroSpike | ~$2B | Signed Oct 2025 via NATO/EuroSpike. |
| Heron TP drones | IAI | ~$1.2B (est.) | Reported Sept 2025. Heron lease ongoing since 2010. |
| Lightning 5 targeting pod | Rafael | $350M+ | Selected for Typhoon fighters. |
| A400M defensive systems | Elbit | ~$260M | Contract awarded July 2025. |
| PULS rocket artillery | Elbit | TBD | Under evaluation. |
| Confirmed total | $10B+ |
The Bundeswehr additionally spent €315 million ($365 million) on Israeli weapons in 2025 — more than in the previous four years combined. That figure excludes the Spike deal (routed through EuroSpike, a German-registered entity) and the Arrow contracts.
February 27, 2022: The Day Germany Started Buying
Before the Russian invasion, Germany's defense relationship with Israel was historical, emotional, and relatively modest in dollar terms. Germany built Israel's Dolphin-class submarines. Israel leased Germany Heron drones. The trade was significant but not structurally defining.
The invasion changed the architecture. Scholz declared the Zeitenwende on February 27, 2022, and committed €100 billion in supplementary defense spending. Germany needed missile defense, artillery, drones, and electronic warfare systems it did not have and could not build domestically in time. Within eighteen months, the Bundeswehr was the largest single foreign buyer of Israeli defense systems in the world.
The pivotal decision: August 2023, the US State Department approved Germany's purchase of Arrow 3 — the first export of the exo-atmospheric interceptor to any country. Germany chose Arrow 3 over the American THAAD (Lockheed Martin). The $3.5 billion contract was signed in Berlin on September 28, 2023 — nine days before October 7. It reset the relationship from niche procurement to strategic dependency.
IAI, Rafael, Elbit — All Three Primes Are Inside the Bundeswehr
The depth of the corridor is visible in one fact: all three Israeli primes hold major German contracts simultaneously.
IAI — the strategic anchor. Arrow 3 ($6.5B+ total), the Heron drone family (lease since 2010, potential $1.2B purchase), and ELTA radars integrated into the Arrow system. IAI is the company that delivers the system Germany chose to shield its territory from ballistic missiles.
Rafael — the munitions and precision layer. Spike via EuroSpike ($2B, October 2025) — one of the largest guided-missile contracts in NATO history, routed through a German-registered subsidiary to satisfy European defense-industrial content requirements. Lightning 5 for Typhoon fighters ($350M+).
Elbit — land systems and platform defense. A400M defensive systems ($260M, July 2025). PULS rocket artillery under evaluation — the HIMARS competitor. Elbit's land-systems portfolio, built on the 2018 IMI acquisition, positions it as the Israeli provider of the artillery and armored-vehicle systems Germany is now procuring at scale.
Germany Suspended Arms to Israel. It Never Stopped Buying From Israel.
The relationship operates inside a political contradiction. Germany is Israel's largest European weapons customer. Germany also suspended arms exports to Israel in August 2025 under Chancellor Friedrich Merz — restricting weapons that could be used in Gaza.
The suspension applied to German arms exports to Israel. Not Israeli arms exports to Germany. The distinction matters: Germany restricted what it sold. It did not restrict what it bought. The procurement pipeline continued. Arrow 3 batteries were delivered in December 2025. The $3.1 billion expansion was approved the same month. The Spike deal closed. The Lightning 5 was selected.
The emotional substrate is unique. At the Arrow 3 handover ceremony at Holzdorf on December 3, 2025, Israeli Defense Ministry Director-General Amir Baram said: "We Israelis, descendants of Holocaust survivors, want to see Germany strong and prosperous, proud and leading in Europe and throughout the world." No other bilateral defense relationship carries that language.
The Post-American Strategy Starts in Berlin
Germany is the proof case for Israeli defense industry's life after American aid. The 2028 FMF cliff — the expiration of the $3.8 billion/year US-Israel military aid MOU — will force Israeli primes to diversify revenue. Germany is where that diversification is already happening.
IAI's $6.5 billion Arrow 3 contract alone exceeds two years of US FMF at current levels. The combined $10B+ German pipeline provides the commercial foundation for the IAI and Rafael IPOs — both of which are being marketed partly on the strength of European order books.
The Germany corridor is not a trade relationship. It is the structural anchor of Israeli defense industry's next decade.
Olam coverage
Arrow 3 · Spike · PULS · IAI · Rafael · Elbit · ELTA Radars · 2028 FMF Cliff · Israel–Germany: The $9B Trade Corridor · Europe Rearmed · Defense Prime Index
The Olam Editorial Team | Israeli Defense Industry