Klingbeil Takes Iran War Concerns to G7 as Germany Unveils €10B Defence Plan

Germany ran four security and economic files in parallel on Monday: the Iran war's economic blowback at the G7 in Paris, a €10-billion domestic civil-defence package, a major sanctions-evasion bust on Russia's defence supply chain, and a fresh trade-association warning that the chemical industry's revenue has now slipped 22 percent since 2022.

Finance Minister Lars Klingbeil flew to Paris with the bluntest warning. Before departure he told reporters the Iran war and a possible closure of the Strait of Hormuz constituted a "ernsthafte Bedrohung für die Weltwirtschaft" and were doing "massive" damage to economic development; everything had to be done to permanently end the war, stabilise the region and ensure free sea lanes. "Wir setzen auf Kooperation statt Konfrontation," he added. The two-day G7 finance ministers' meeting opened in Paris under France's 2026 presidency. The agenda runs from the Hormuz blockade's economic fallout to global-trade imbalances, supply of critical raw materials, financing for developing countries, the fight against terrorism and organised-crime financing, and Ukraine support. Finance ministers from Brazil, India, South Korea and Kenya joined the table on a guest basis. The Bundesregierung said separately that the recent Merz–Trump quarrel over Iran policy was "ausgeräumt" after a May 15 phone call.

Interior Minister Alexander Dobrindt (CSU) presented an outline of a €10-billion civil-defence package due in cabinet on Wednesday. The plan funds shelters, training, around 1,000 specialised vehicles and 110,000 field beds by 2030, framed as the first major civil-defence build-up since the end of the Cold War. It sits alongside Berlin's earlier May 15 signal that it stands ready to join a European Strait of Hormuz mission and a coalition push to harden Germany against hybrid pressure from Russia.

German prosecutors announced the dismantling of a large sanctions-evasion network that allegedly supplied Russia's military industry with European dual-use technology routed through Turkey and shell companies. Police arrested suspects in coordinated raids; the case adds to a sequence of busts targeting the third-country pipelines that have allowed Russian missile production to keep absorbing Western electronics. Volodymyr Zelensky on Sunday cited the same pipeline when pointing to Western components in Russian missiles used against Kyiv this week — the supply-chain problem the Bundesnachrichtendienst has flagged repeatedly.

The structural number came from the trade body VCI. Revenue at German chemical firms fell to €220 billion in 2025, a roughly 22-percent drop since 2022, and the association said there was "no sign of a turnaround," citing persistent energy-cost pressure and weak demand. The decline anchors the case Klingbeil pushed in Paris: Berlin and Europe must become "unabhängiger und widerstandsfähiger" on raw materials, energy and supply chains. The pressure spans the Gulf as well as the eastern flank — Chancellor Friedrich Merz on Sunday condemned Iran's drone attack on the Baraka nuclear plant in the UAE, the country's main power source, and demanded Tehran open Hormuz "ohne Einschränkungen."