When Rheinmetall, Germany’s largest arms manufacturer, broke ground on a gunpowder and ammunition plant in Bulgaria through a joint venture with local partners, it marked one of the most visible steps yet in Berlin’s push to rebuild European defense production. The facility, projected to reach operational status roughly 14 months after construction began, is part of a wider scramble across the continent to manufacture munitions at a pace not seen since the Cold War.
By spring 2026, that scramble has reshaped how German industry operates. Rheinmetall alone has announced expansions spanning Lithuania, Hungary, and Ukraine alongside the Bulgarian site, while reporting record order backlogs driven by NATO restocking and Ukraine’s ongoing ammunition needs. Inside Germany, the company has invested in upgrading capacity at its historic Unterlüß site in Lower Saxony. The question facing Berlin is no longer whether to scale up, but whether the pace is fast enough.
The EU funding engine behind the push
Much of the momentum traces back to Brussels. In 2023, the European Commission launched the Act in Support of Ammunition Production, known as ASAP, directing 500 million euros toward eliminating bottlenecks in Europe’s munitions supply chain. The program’s stated goal was to push continental output toward 2 million rounds per year by the end of 2025.
That deadline has now passed. While the Commission has reported significant progress, with production rates roughly tripling from a pre-2022 baseline estimated at around 300,000 rounds annually, publicly available data as of early 2026 does not confirm the full 2-million-round target has been reached. The Commission’s own program summary emphasized that ASAP funds would support production lines, raw material procurement, and cross-border cooperation, but specific country-by-country breakdowns of output gains remain limited.
ASAP was always designed as a bridge. The larger structural shift came in March 2025, when EU leaders endorsed the ReArm Europe plan, unlocking pathways for up to 800 billion euros in collective defense spending. Germany moved in parallel: the Bundestag approved a constitutional reform loosening the debt brake specifically for defense and security investments, building on the 100 billion euro Bundeswehr special fund established in 2022. Together, these measures gave German manufacturers a financial runway that extends well beyond any single EU grant program.
Why Bulgaria, and what it signals
Rheinmetall’s decision to build in Bulgaria rather than solely expand domestic German capacity was pragmatic. Bulgaria offered existing expertise in munitions manufacturing, lower construction and labor costs, and a regulatory environment geared toward fast-tracking defense projects. For a company racing to deliver product, those advantages translated into months saved.
But the choice also exposed a tension at the heart of Europe’s rearmament drive. Placing critical defense production outside national borders can accelerate output in peacetime while introducing supply chain risks that are harder to manage during a crisis. Ammunition manufactured in Plovdiv or Sofia must still reach German depots and forward-deployed NATO units, a logistics chain that depends on open borders, functioning transport corridors, and political alignment among allies.
European officials have tried to address this by framing ammunition stocks as a shared resource. Under ASAP and the broader European Defence Industrial Programme, cross-border procurement is encouraged, and joint ventures like Rheinmetall’s Bulgarian plant are treated as contributions to collective security rather than exports of national capability. Whether that framework holds under the pressure of an actual conflict, when governments tend to prioritize their own forces, remains untested.
Inside Germany’s own factory floors
The overseas expansion has drawn attention, but changes inside Germany tell a parallel story. Rheinmetall has poured investment into its Unterlüß complex, where artillery shells and propellant charges have been produced for decades. The company has also expanded operations at sites in Neckarsulm and Kassel, adding shifts and hiring skilled workers to meet delivery schedules that, according to company reporting, now stretch years into the future.
Beyond Rheinmetall, smaller German manufacturers have entered or re-entered the defense supply chain. Component makers that spent the post-Cold War decades serving automotive or industrial clients have begun accepting contracts for shell casings, fuses, and propellant ingredients. The shift is uneven: not every factory can pivot overnight, and defense production demands specialized quality controls, security clearances, and testing regimes that civilian manufacturing does not require.
Workforce effects remain one of the least documented aspects of the transition. Large-scale defense manufacturing requires machinists, chemical engineers, logistics specialists, and quality inspectors, many of whom need training specific to munitions work. German labor unions have flagged concerns about working conditions in high-tempo production environments, while regional economic development agencies in states like Lower Saxony and North Rhine-Westphalia have begun marketing themselves as defense manufacturing hubs. Concrete employment figures tied to the ramp-up, however, have not been consolidated in any single public report as of May 2026.
How Germany compares across Europe
Germany is not acting alone. Poland has committed to spending 4.7 percent of GDP on defense in 2025, the highest ratio in NATO, and has signed major procurement deals with South Korean and domestic manufacturers. France’s Nexter has expanded production of 155mm shells at facilities in Bourges. The Czech Republic and Romania have both attracted new ammunition production investments, and Norway’s Nammo has scaled up output at plants in Scandinavia and the United States.
What distinguishes Germany’s approach is the combination of scale and speed. As Europe’s largest economy, its industrial base offers manufacturing depth that smaller nations cannot match. But decades of underinvestment in defense, a legacy of post-reunification peace dividends and political reluctance to embrace military spending, mean that Germany is starting from a lower baseline relative to its economic weight. The current ramp-up is as much about closing a self-imposed gap as it is about responding to new threats.
Unanswered questions heading into summer 2026
Several critical details remain unresolved. The Bulgarian plant’s 14-month timeline was a projection, and no public update as of May 2026 has confirmed whether construction is on schedule, ahead, or delayed. Rheinmetall has not disclosed the facility’s planned annual output volume, the specific calibers it will produce, or how production will be allocated between German Bundeswehr orders, NATO partners, and potential export customers.
The distribution of ASAP funds among EU member states also lacks transparency. The 500 million euro envelope was an aggregate figure; how much flowed to German-based producers versus manufacturers in France, Poland, or the Baltics has not been itemized in publicly accessible Commission documents. Without that breakdown, it is difficult to assess whether Germany is a primary beneficiary of EU defense industrial support or one participant among many.
Perhaps the most consequential unknown is whether the combined output of all these investments, German and European, will prove sufficient. Ukraine’s consumption of artillery ammunition has at times exceeded 5,000 rounds per day. NATO’s own stockpile requirements, recalculated after 2022, demand reserves that dwarf what European factories produced for most of the past three decades. The plants being built and expanded today are a response to that arithmetic, but the gap between current capacity and strategic need has not been publicly closed.
What is clear by spring 2026 is that Germany’s defense industry has shifted from cautious incrementalism to aggressive expansion, both at home and across European borders. Real money is flowing, real concrete is being poured, and real production lines are running additional shifts. Whether the pace matches the threat environment is the question that will define the next phase of Europe’s rearmament.
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*This article was researched with the help of AI, with human editors creating the final content.
