Leaked: German Industry Told to Prepare for War Economy by 2026

Part 2: Confidential corporate briefing reveals Berlin’s timeline for declaring “state of tension”—as NATO exercises escalate toward conflict readiness

Part 1 you will be able to find here:
Arming Into Decline: Why Germany and the EU Are Investing in War

Part 3 you will be able to find here:
EDIP: How the EU is Converting Europe into a War Economy

Part 4 you will be able to find here:
https://www.michael-hollister.com/index.php/2025/11/30/the-eu-backdoor-to-war

from Michael Hollister

1.781 words * 9 minutes readingtime

First published by Overton Magazine on November 02, 2025

FRANKFURT — At a strictly secured meeting in spring 2025, Volkswagen executives delivered an extraordinary message to the company’s top dealers: Germany will switch to a war economy in 2026. The state, they said, plans to declare a “Spannungsfall”—a constitutional state of emergency that transforms the economy for war without formally declaring one.

Cell phones were banned. Notes forbidden. Security tight. The message was clear: “2025 will be economically tough. But hold on—by 2026, Germany shifts to war economy mode.”

This information comes from a veteran investigative journalist who shared it with me—someone who only speaks when evidence is solid. And it’s not isolated. I’ve now received three independent confirmations from different industrial sectors, all pointing to the same timeline: 2026.

What Is “Spannungsfall”?

The German term sounds technical, almost bureaucratic. But legally, it’s one of the most dangerous mechanisms in the country’s constitution. Under Articles 80a and 115a-l of Germany’s Basic Law, the Bundestag can declare this “state of tension” when “the security of the federation is endangered.”

No war declaration required. No specific threat definition needed. Just a political assessment.

Once declared, dormant emergency laws activate: The state can mandate labor duties, commandeer production facilities, and force private companies to manufacture for military purposes—against their commercial interests if necessary. Corporate boardrooms become extensions of the defense ministry. The Spannungsfall is the legal bridge from civilian economy to war economy—without crossing the Rubicon of formal war.

And that term—Spannungsfall—was explicitly used at the VW meeting. A major German corporation, deeply embedded in the country’s industrial base, signaling to its commercial network: prepare for economic mobilization in 2026.

The Industrial War Machine Awakens

If VW received this briefing, they’re not alone. When a government prepares for economic mobilization, it doesn’t talk to one company—it talks to the entire system-critical infrastructure: automotive, energy, communications, logistics, steel, chemicals.

The transformation is already visible:

Rheinmetall, Germany’s largest defense contractor, is building new ammunition plants in Lower Saxony with additional facilities planned for Saxony and North Rhine-Westphalia. Production targets: mass manufacturing of artillery shells, tank components, and propellant—all scheduled to reach capacity in 2026. The company reported 73% revenue growth in defense in Q1 2025, driven by massive German government contracts from the Bundeswehr’s special €100 billion rearmament fund.

Defense tech startups are exploding while civilian industries collapse. In June 2025, Helsing SE secured €600 million in venture funding, valuing the AI-weapons company at €12 billion. It’s building a factory in southern Germany to mass-produce autonomous combat drones. Quantum Systems raised €160 million in May, becoming Europe’s newest defense “unicorn.”

Venture capital flowing into European defense startups hit $5.2 billion in 2025. Germany plans to increase defense spending from €63 billion in 2025 to €162 billion by 2029—roughly 3.5% of GDP. That’s approximately equal to Russia’s entire military budget.

Meanwhile, traditional German industrial giants—BASF, ThyssenKrupp, Siemens Energy—announce plant closures and layoffs. Corporate bankruptcies in the first half of 2025 exceeded any comparable period since 2009.

The message is clear: civilian industry contracts while military industry explodes.

NATO’s 2026 War-Readiness Deadline

The timeline isn’t coincidental. NATO has been conducting the largest series of military exercises since the Cold War, with a clear progression toward 2026-2027 operational readiness:

Steadfast Defender 2024 (January-May): 90,000+ troops, the largest NATO exercise in decades. Focus: collective defense, rapid deployment, Eastern Europe deterrence.

Defender Europe 2025 (April-May): 30,000+ troops testing logistics for rapid US force projection into Europe.

Vigorous Warrior 2026: Planned for Estonia, focusing on military medicine and sustained combat operations. This exercise explicitly prepares for “longer crisis and war scenarios”—not deterrence, but actual prolonged conflict.

The Atlantic Council stated it plainly in 2025: “By 2027, NATO must strengthen the Baltic Defense Line.” The RAND Corporation emphasizes that Europe’s defense capabilities must be “massively expanded” with a view toward “long-lasting changes in European security priorities.”

Translation: Europe is preparing to fight a war by 2026-2027.

EDIP: The EU’s War Economy Framework

What Germany prepares nationally, the EU coordinates continentally. In January 2025, the European Parliament finalized the European Defence Industry Programme (EDIP)—a €1.5 billion ($1.6 billion) program for 2025-2027 designed to create a unified European defense industrial base.

EDIP isn’t just funding. It’s the architectural blueprint for transforming Europe’s economy from civilian to military production. The accompanying European Defence Industrial Strategy (EDIS) explicitly states the goal: reduce dependence on non-European defense suppliers (primarily the United States) and build an autonomous European military-industrial complex.

The EU Commission’s language is blunt: Europe faces the “return of high-intensity warfare” and requires “increased, more collaborative and European investment” in defense manufacturing.

The Financial Times reported in December 2024 that the EU plans to activate the full €150 billion credit facility for arms purchases—the largest militarization program in European history.

What VW told its dealers about Germany—economic mobilization in 2026—the EU has codified as official policy for the entire continent. EDIP provides the legal framework. EDIS provides the strategy. National governments execute.

War Keynesianism: The Economic Logic

Why now? The economic explanation is straightforward and disturbing: when an economy exhausts civilian growth potential, military spending can substitute as a growth engine.

This is textbook military Keynesianism—the theory that war production can sustain capitalism when civilian demand falters. Tanks, jets, ammunition, logistics—all require manufacturing, employment, supply chains. The GDP grows. Corporations profit. The economy appears healthy.

But there’s a fatal flaw: weapons production requires weapons consumption. You can’t stockpile indefinitely. Drones need deployment zones. Ammunition needs targets. Tanks need battlefields.

What begins as economic stimulus becomes structural dependency. The economy requires ongoing weapons consumption to maintain growth—which means ongoing war. Peace becomes unaffordable because peace means recession.

Those who build their economy on armaments must eventually use those arms. The system demands it.

Social Spending Cut, Military Spending Soars

The reallocation is already underway. While defense budgets explode, Germany has:

• Capped parental leave benefits
• Reduced education and research funding
• Cut hospital investment
• Decreased employment agency funding despite rising unemployment

Citizens pay taxes—but an ever-larger share flows not into social infrastructure but into the machinery of war.

The Question: War With Whom?

The official narrative is “deterrence” and “defense” against Russia. But the scale of preparation—economic mobilization, legal frameworks for compulsory labor, mass drone production, sustained combat readiness—suggests something beyond deterrence.

NATO isn’t preparing to deter. It’s preparing to fight. And the timeline—2026—is remarkably specific.

Russia’s military is degraded by the Ukraine war. China remains focused on Taiwan and the Pacific. Iran lacks conventional capability to threaten Europe. So who is this massive, coordinated, continent-wide military mobilization actually preparing to fight?

The most troubling answer: anyone Washington designates.

The 1914 Parallel: When Mobilization Becomes Inevitable

History offers an uncomfortable precedent. In the summer of 1914, European powers didn’t stumble into war—they mobilized into it. Once Russia, Germany, France, and Austria-Hungary activated their war economies and military timetables, the momentum became unstoppable. Mobilization itself became the casus belli. Generals argued that demobilization would leave them vulnerable. Industries that had retooled for war production needed contracts fulfilled. Loans taken for military buildup demanded return on investment.

The lesson: economic mobilization creates its own inevitability. Once you’ve transformed your economy for war, you’ve made peace economically catastrophic.

Europe in 2026 faces an eerie parallel. Billions invested in drone factories, ammunition plants, tank production—all require return. Helsing’s investors didn’t fund €12 billion in valuation for weapons that gather dust. Rheinmetall’s shareholders don’t expect artillery shells to sit in warehouses indefinitely. The economic pressure to use what’s being built will be immense.

Who Benefits? Follow the Money

While European taxpayers fund this transformation, who profits?

The irony: European military “independence” from the United States still enriches American capital. Venture capital firms backing Helsing, Quantum Systems, and other European defense startups? Largely US-based. The software, chips, and components for “European” weapons systems? Still substantially American. Even as Europe builds its own military-industrial complex, Wall Street and Silicon Valley capture significant returns.

Meanwhile, traditional European industries—automotive, chemicals, steel—collapse. BASF moves production to China. Volkswagen cuts jobs. But Rheinmetall’s stock soars 150% in two years. BlackRock and other US asset managers, major shareholders in European defense contractors, benefit handsomely.

The pattern is familiar: socialize the costs (taxpayer-funded mobilization), privatize the profits (defense contractor windfalls), externalize the consequences (working-class Europeans die in the resulting war).

This isn’t European sovereignty. It’s transatlantic capital finding a new growth sector as civilian markets stagnate. The “return of high-intensity warfare in Europe” isn’t a threat assessment—it’s an investment thesis.

Conclusion: Not Prediction, But Documentation

This article isn’t speculation. It’s documentation of observable preparation:

• VW briefing dealers on 2026 economic mobilization
• Rheinmetall, Helsing, Quantum Systems building war production capacity for 2026
• NATO exercises progressing toward 2026-2027 war-readiness
• EU implementing EDIP/EDIS framework for war economy transformation
• German defense budget tripling by 2029

The pieces form a clear picture: Europe, led by Germany, is systematically preparing for war economy activation in 2026.

The question isn’t whether this is happening—the evidence is overwhelming. The question is: will populations acquiesce to economic mobilization for a war that serves whose interests?

Because when democracies transform into war economies without public debate or consent, democracy becomes a fiction. Parliaments become theater. Media becomes propaganda. And citizens become resources to be mobilized.

Those who ignore this now forfeit the right to claim ignorance later.

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Primary Sources:

[1] Reuters – Germany to raise defence spending to 3.5% of GDP by 2029, June 23, 2025
https://www.reuters.com/business/aerospace-defense/germany-raise-defence-spending-35-gdp-by-2029-sources-say-2025-06-23

[2] Rheinmetall – Quarterly Report Q1 2025, May 8, 2025
https://www.rheinmetall.com/en/media/news-watch/news/2025/05/2025-05-08-rheinmetall-news-quarterly-statement-q1

[3] Sifted.eu – Helsing raises €600M to build autonomous drone systems, June 2025
https://sifted.eu/articles/helsing-ai-attack-drones-factory-germany

[4] Bloomberg – Euro Defense Startups, 2025
https://www.bloomberg.com/features/2025-euro-defense-startups

[5] European Parliament – European Defence Industry Programme (EDIP): Briefing, 2024
https://www.europarl.europa.eu/RegData/etudes/BRIE/2024/762402/EPRS_BRI(2024)762402_EN.pdf

[6] European Commission – European Defence Industrial Strategy (EDIS)
https://defence-industry-space.ec.europa.eu/eu-defence-industry/edis-our-common-defence-industrial-strategy_en

[7] Financial Times – EU to tap entire €150bn loans-for-arms programme, December 2024
https://www.ft.com/content/2bcca8ea-69b1-4c2a-8be2-a679ec6ac9e9

[8] Atlantic Council – For NATO in 2027: European leadership will be key, 2025
https://www.atlanticcouncil.org/in-depth-research-reports/issue-brief/for-nato-in-2027-european-leadership-will-be-key-to-deterrence-against-russia

[9] RAND Corporation – Russia, China, and the European Deterrence Gap (RRA3141-5)
https://www.rand.org/pubs/research_reports/RRA3141-5.html

[10] Carnegie Endowment – Understanding the EU’s New Defense Industrial Strategy, March 2024
https://carnegieendowment.org/emissary/2024/03/understanding-the-eus-new-defense-industrial-strategy

[Complete source documentation available upon request]

© Michael Hollister — Redistribution, publication or reuse of this text is explicitly welcome. The only requirement is proper source attribution and a link to www.michael-hollister.com (or in printed form the note “Source: www.michael-hollister.com”).

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