By Dhirendra Tripathi
Investing.com – Lockheed Martin (NYSE:LMT) stock traded 1.7% higher Monday on prospects of securing an order from Germany for 35 F-35 fighter jets.
The stealth jets will replace the aging Tornado aircraft that Germany plans to phase out between 2025 and 2030.
The Tornado is the only German jet capable of carrying U.S. nuclear bombs, stored in Germany, in case of a conflict.
Chancellor Olaf Scholz has decided to sharply increase the country’s spending on defense to more than 2% of its economic output, a decision heavily influenced by Russia’s invasion of Ukraine that has forced many countries to revisit their security preparedness and up the defense spending.
Since the end of the Second World War, Germany has long refrained from getting involved in conflicts, resisting pressure to raise its defense spending in the light of its military past, and resulting in strong pacifism within its population.
Scholz’s government has decided to more than double last year’s military investment to 100 billion euros ($109 billion) in the 2022 budget.
As Germany reverses its policy, pressure on governments in other European nations could mount too, considering the heightened geopolitical risks in the region and the lack of unity among countries on critical security issues.
If the F-35 purchase happens, it will be a blow for Boeing (NYSE:BA), whose F-18 was favored by former German defense minister Annegret Kramp-Karrenbauer to replace the Tornado, according to Reuters.