Germany approves $4.3 billion purchase of Arrow-3 missile defense systems

The German Ministry of Defense and the Budget and Defense Committees of the Bundestag approved the acquisition of the Arrow-3 air defense and missile defense system.

The system, developed by Israel Aerospace Industries (IAI)it is part of Israel’s multi-layered defense array and offers protection against longer-range threats, particularly those carrying weapons of mass destruction.

Protection, at the highest level of defense

With reported a price of nearly $4.3 billionthe Arrow-3 deal represents the largest defense sale in Israel’s history.

Germany has moved ahead with the supply of Israel’s advanced Arrow-3 missile defense system. Reuters reported that Germany’s Bundestag and Budget Committee had agreed to release advances of up to $610 million, marking the initial phase of the procurement process.

The acquisition of the Arrow-3 system comes in response to the growing need for powerful ground-based air defense systems in the wake of Russia’s war in Ukraine.

With existing defense systems lacking in Western nations, Germany aims to boost its defense capabilities by acquiring the Arrow-3, which offers the highest level of air defense protection.

While the middle layer is covered by systems such as Raytheon’s Patriot units and IRIS-T, the Arrow-3 interceptor provides defense against ballistic missiles outside the Earth’s atmosphere.

Funds for this buyout will come from a special €100 billion fund launched by German Chancellor Olaf Scholz after Russia’s war against Ukraine.

Tristan Sauer, GlobalData’s aerospace, defense and security analyst, pointed out: “When German Chancellor Olaf Scholz announced a $109 billion investment to modernize the Bundeswehr’s capabilities after the invasion of Ukraine in early 2022, many observers expressed skepticism that this commitment would amount to any tangible changes, with the lack of major markets in 2022 only further legitimizing this view.”

A relationship steeped in infamous history

Negotiations between Israel and Germany in acquiring the Arrow-3 system gained momentum last year after the conflict in Ukraine. Israeli Prime Minister Benjamin Netanyahu discussed the potential deal with German Chancellor Olaf Scholz in Berlin earlier this year.

According to GlobalData’s “Israel Defense Market 2023-2028”, due to Germany’s historical responsibility for the Holocaust and its aftermath, the two nations enjoy a special relationship that makes Germany one of Israel’s strongest defense partners in Europe.

Israel’s Ministry of Defense and Israel Aerospace Industries (IAI) welcomed the German approval and confirmed their commitment to complete the supply contract.

The joint statement by Defense Minister Yoav Gallant, the Israeli Defense Ministry and IAI highlighted ongoing discussions with German counterparts and maintained communication with the US administration to secure the necessary sales approval.

If the deal fell through, Germany would lose some or all of its advance, compensating Israel for the work done so far.

With the approval of the German parliament, the Arrow-3 agreement paved the way for enhanced defense capabilities and deepening cooperation between Germany and Israel.

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