German Far-Right Election Win Could Boost Israeli Defense Firms

Germany and Israel are expressing concern following a significant electoral victory for the far-right Alternative for Germany (AfD) party in the state of Saxony-Anhalt, where it secured approximately 43.8% of the vote, translating to 39 parliamentary seats. This result is the party's largest since World War II.

Unexpectedly, an Israeli defense company, Elbit Systems, may stand to benefit from the AfD's rise. Ulrich Siegmund, who is expected to become the state's Minister-President, supports establishing domestic arms facilities. This could encourage Elbit to build a plant in the region to supply resources for the party's planned deportation operations. While the AfD opposes increased German defense spending, Siegmund stated that the party does not object to producing military equipment for local needs, citing its utility for internal security and national defense.

Local media reports indicate that Elbit is in discussions to establish a factory in Saxony-Anhalt that would produce components for other German companies, potentially creating up to 400 jobs. Elbit Germany confirmed it is exploring expansion opportunities in the country but has not yet made a final decision on a location.

In a separate development, Elbit Systems is also involved in a deal to acquire the former Volkswagen plant in Osnabrück, in partnership with the Aurelius investment fund and the state of Lower Saxony. This facility would produce components for the Iron Dome missile defense system, among other things. This acquisition is notable as it bypasses opposition from the Qatari investment fund, a shareholder in Volkswagen, to collaborating with Rafael on defense systems. The deal is expected to save thousands of jobs at the plant, which was slated for closure.