Ukraine-Russia war: Germany to make long-range missiles with Ukraine and gives €5bn more in military aid – as it happened

Germany will assist Ukraine in developing long-range weapons capable of striking targets within Russia, according to Chancellor Friedrich Merz, with a memorandum of understanding expected to be signed imminently. This military-industrial cooperation will have no range restrictions and production could occur in both Ukraine and Germany. This announcement coincides with Germany's commitment of an additional €5 billion in military aid to Ukraine, while Russia's Foreign Minister Lavrov asserts that these actions demonstrate Germany's active participation in the Russia-Ukraine war.

Analysis

Germany's decision to jointly produce long-range weapons with Ukraine, as announced by German Chancellor Friedrich Merz, signifies a notable deepening of military-industrial cooperation, highlighted by the planned memorandum of understanding and the absence of range restrictions on these systems. This development, coupled with an additional €5 billion ($5.65bn) in German military aid, has been met with strong condemnation from Russia, with Foreign Minister Sergei Lavrov stating it confirms Germany's active participation in the war, thereby increasing geopolitical tensions. The article further details ongoing hostilities, including Ukrainian drone attacks on Russian weapon production facilities like the Kronstadt and Raduga plants, and a UN report concluding Russian drone attacks in Kherson constitute "crimes against humanity." Simultaneously, Russia has proposed new peace talks and reported significant military recruitment, with nearly 175,000 new contract servicemen since the year's start. Germany also reaffirmed its commitment to prevent the restart of the Nord Stream 2 pipeline, and German prosecutors have charged three individuals with espionage targeting a Ukrainian in Germany, indicating a complex and escalating environment. The provided negative sentiment score (-0.35) and moderate market impact score (0.6) reflect these heightened risks and the tense, factual tone of the developments.

Key Decisions for Investors

• Investors should brace for increased market volatility driven by escalating geopolitical tensions and consider reviewing exposures to regions and sectors directly impacted by the conflict and sanctions.
• The announced €5bn German aid and joint long-range weapons production initiative may present specific opportunities within the European defense sector, particularly for firms involved in advanced military technology and manufacturing.
• Closely monitor diplomatic initiatives, such as the proposed peace talks, and energy security developments, including Germany's stance on Nord Stream, as these will be key determinants of market sentiment and potential shifts in commodity prices.