Robert Habeck wants Germany to rebuild Ukraine

BERLIN — On the ground in Ukraine, Robert Habeck is thinking of the future after the war.

Along with a delegation of defense and energy industry bosses, Germany's Vice Chancellor arrived in Kyiv on Thursday looking to plug his country's industrial heavyweights into Ukraine's economy, on everything from armament production to power grid resilience.

But while major German arms contractors are delivering weapons systems for Ukraine's war against the Russian invasion, they're also gearing up to make the most of what may be a major business opportunity for the future.

There will be money to be made out of Ukraine's reconstruction. On top of that, analysts say the live battlefield environment can serve as a lab for arms companies to test their latest military technology.

"The German defence industry is supporting the fight for freedom and democracy with their commitment in Ukraine," Habeck said in an emailed statement. "With their private investments, they are contributing to the country’s security and resilience."

His trip follows months of criticism over Germany's refusal to send Taurus cruise missiles to Ukraine. Berlin formally launched an initiative to form an air defense alliance for Ukraine this week, calling on allies to find and finance extra systems to combat Russian missile attacks.

Spying investment opportunities that will outlive the war with Russia, defense manufacturer Rheinmetall has already said it plans to develop production plants inside Ukraine — for vehicle maintenance and artillery ammunition.

Setting up factories in Ukraine offers both a quick market, with low production costs and secured demand, and the chance to test technical innovations, said Guntram Wolff, a senior fellow at the Brussels-based Bruegel think tank.

“Whatever you produce there you can test and innovate working with local military experts to develop cutting edge new systems,” said Wolff. “That’s the real business case. It’s like a laboratory.”

Before traveling Kyiv, Habeck hosted executives for a roundtable discussion in March aimed at figuring out how to ramp up defense production capacity to help Ukraine.

The delegation Habeck has taken with him includes representatives from arms firms Rheinmetall and Diehl, which are set to deliver critical equipment like the IRIS-T air defense system, an official with knowledge of the trip told POLITICO. Others such as FAE-Group and Quantum Systems, which provide mine-clearing vehicles and reconnaissance drones, are also on the visit.

Over the next few days, Habeck and the Kyiv government are expected to launch multiple German-Ukrainian industrial collaboration projects — some under tight security.

Also part of the delegation are two energy firms tasked with securing decentralized power generation through renewable energy.

Those joining Habeck for the night train from Poland to Kyiv were asked to leave their mobile phones at home, and neither confirm or deny their travel plans, the official familiar with the trip said, speaking on condition of anonymity because the matter is sensitive.

The journey began soon after a cabinet meeting, with Habeck traveling to Eastern Poland to meet the delegation. From there, the group continued by night train to Kyiv, arriving in the early hours of Thursday.

The official cited above pointed to Habeck’s frustration with the slow pace of aid and supply commitments from allies, prompting him to take matters into his own hands.