U212 class submarine procurement for Germany takes shape

This article, written by Lars Hoffmann, was originally published in German by https://www.hartpunkt.de/ on 30th November 2024. Hartpunkt and Calibre are collaborating to bring you the best content from across Europe. 

In his public appearances in recent weeks, Defence Minister Boris Pistorius has repeatedly mentioned the procurement of new U212 class submarines as one of the top priorities among the orders due by the end of the year.

According to media reports, the cost of four new boats from the U212 class submarine is around 4.7 billion euros, which has been confirmed by hartpunkt sources. The sum includes a spare parts package and training. Apparently, a down payment of one billion euros will be due to Thyssenkrupp Marine Systems (tkMS), the manufacturer shortly after the order is placed. The money will be used, among other things, to set up a second production line for submarines at the Wismar site with delivery planned in the 2030s.

The Kiel-based naval shipbuilder bought the shipyard in Wismar a few years ago from the bankruptcy estate of the Malaysian company Genting, which actually wanted to build cruise ships at this East German location. Even then, tkMS had discussed setting up a second production line and the several hundred jobs this would create with the unions. However, there have been no orders so far.

The Federal Ministry of Defence is reportedly pushing for a quick conclusion of the contract so that Norway’s parliament receives a clear signal and can make the concrete purchase decision early next year. This is the only way to ensure that construction of the boats can begin on time. It is said that in the event that Oslo does not order any more boats from tkMS, around a quarter of a billion euros will be added to the German purchase price as a contingency fee – but this would not be incurred in the event of an order from Oslo.

What is special about the contract is that the billion euro advance payment was not even planned for when the 2024 budget was drawn up, but is apparently to be achieved through savings in the Einzelplan 14 (Individual Plan 14 – the name of the defence budget in the overall budget of the Federal Govt). Observers therefore assume that the money planned for other armaments projects will not flow out this year – despite the limited investment share in the defence budget. The fact that this outflow of funds is apparently stalling may be due to delays in industry or planning errors in the ministry.

The actual payments to the manufacturer tkMS are not due to start until the end of this decade. Extraordinary commitment authorizations are planned for this, which are only partially covered by savings elsewhere. The planners are obviously assuming a rising defense budget in order to raise the additional billions.

U212 class submarines – a capability gap?

The reason given for the start of the procurement of new U212 submarines – which came as a surprise to many – is the expected increase in NATO planning targets. If you ask experts in Berlin, the number of weapon systems for the army, air force and apparently also the navy is set to increase significantly. However, the greatest increase is expected in the land forces. While the German navy currently has six submarines in its inventory, the Bundeswehr’s target size for this type of ship is likely to almost double. According to NATO capability targets, Germany must have at least five operational submarines from 2031.

In the parliamentary bill, the acquisition of the additional submarines is described as “temporally unavoidable” and “factually unavoidable,” otherwise the Bundeswehr would not be able to meet the new NATO requirements for better protection of the alliance’s northern flank.

If Berlin and Oslo were to order another batch of boats, this would mean an order intake of over seven billion euros for tkMS, thus employing its build capacity for a long time. At the same time, the company’s position in the planned spin-off from the parent company Thyssenkrupp would be improved.

By purchasing German submarines and operating them jointly with the German Navy, Norway is signaling that the Scandinavian country is striving for a close security partnership with Berlin. The recently published shortlist of countries with which the Kingdom wants to discuss the joint purchase and operation of new frigates includes Germany, as well as the USA, France and Great Britain. This is obviously about the design of the future F 127 frigate from tkMS. Norway and Germany have also jointly offered Canada military cooperation on naval issues.

The ties between the two countries are also growing closer on the arms industry side. The majority state-owned Kongsberg Group and the tkMS subsidiary Atlas Elektronik jointly operate the joint venture KTA Naval Systems, which develops the command and weapon systems for the tkMS submarines.

Furthermore, Kongsberg, as consortium leader, as well as MBDA Germany and Diehl Defence, are working on the development of the Tyrfing anti-ship missile, which will probably fall into the category of a “deep strike precision missile”. Apparently, the arms cooperation is to be expanded further in the future and a new heavyweight torpedo is to be jointly developed, which will then be fitted into the U212 class submarines. Atlas Elektronik and Kongsberg would probably be the main players here again.

German companies would benefit if the joint fleet of U212s were to be equipped with new weapon systems such as the Seaspider anti-torpedo torpedo or the IDAS air defense system in the future, as planned. A 25 million euro proposal is planned for this year for the final development of IDAS.

More than submarines for Germany and Norway

Norway and Germany’s mutual interest in cooperating on a military level is probably based not least on their close and strategic economic relations. In 2022, around 28 percent of all Norwegian exports went to Germany, the most important export market at the time. In terms of imports, however, Germany only accounts for 11.4 percent of imports, putting it in third place after Sweden and China.

In 2023, Germany exported goods worth 9.1 billion euros to the Scandinavian country, but imported goods worth 30.5 billion euros from there. The main imports from Norway are gas and oil.

In the year of the Russian invasion of Ukraine in 2022, Germany had even imported goods worth around 63 billion euros, 225 percent more than in the previous year (19.4 billion euros). Norway – including the price effects in that year – helped keep the lights on in Germany. According to the Federal Network Agency, Germany covered 43 percent of its gas needs from Norway last year. The gas is transported to the end consumer via pipelines.

If one takes into account the fact that Norway’s oil and gas production takes place offshore, i.e. in the sea area around the country, and that this requires very large facilities, it becomes clear which security interests unite Berlin and Oslo. Now it remains to be seen whether the proposal for the new submarines will pass the Bundestag committees. After all, the current minority government does not have a majority in parliament and the Union clearly still has some questions and is keeping all options open.