Germany approved defense exports to Israel worth nearly €800 million (about $930 million) in the first half of 2026, "Der Spiegel" reports, citing data from Germany’s Ministry of Economics and Energy in response to a query from a leftist opposition party.
This is such a significant jump that in the first half of 2026, total German defense exports to Israel were four times higher than in all of 2025 (€260 million). Some of the increase was due to Chancellor Friedrich Merz’s partial lifting of the Israel arms embargo, which ended last November. Furthermore, €735.8 million of the amount (about 91.9%) was approved in the second quarter, with 67% of that for a "naval project" and 21% for licenses for joint projects carried out by German and Israeli companies together, serving the German military.
Considering the amount and timing, the only project that could be that "naval project" is the most expensive submarine that Israel has ever procured, the INS Drakon. The delivery ceremony for Israel’s sixth submarine took place last month at the TKMS shipyard (ThyssenKrupp Marine Systems) in Kiel.
INS Drakon is the largest submarine built in Germany since World War II. Its cost is estimated at about €550 million. In the field of submarines, Israel is completely dependent on Germany and ThyssenKrupp, and this dependence will continue in the coming decade.
In the above-water sector, there has been a move to indpendence. In December 2024, the Ministry of Defense signed, for the first time in more than two decades, an agreement with Israel Shipyards to purchase five advanced Reshef-class attack ships, for $840 million. These ships are intended to replace the Nirit ships, which are expected to be retired after 40 years of operation.
Three more on the way
In 2018, the Israel Navy decided to halt development of the advanced submarine eventually delivered last month, which was almost ready, and to make a strategic change and some improvements, including replacing components. The major change took time and costs increased. The design and planning phase of each submarine lasted about three years, while construction took about seven years. Among other things, unlike Israel's first three submarines, the most recent three - the Tanin, Rahav, and Drakon have an AIP system, which allows batteries to be charged even underwater, allowing for a longer dive time.
According to reports in the international media, the Drakon is over 70 meters long. Its size allows it to carry a larger crew and more equipment and weapons. Its weight exceeds 2,000 tons, a figure that makes it the largest and most powerful submarine in the Middle East. According to a report by "Der Spiegel", the Tanin and Rahav submarines can stay underwater for up to 18 days and reach a speed of 25 knots - about 46.3 kilometers per hour.
Looking ahead, three additional Dakar-class submarines will arrive in Israel from 2031, at a rate of one every 18 months, replacing the Dolphin, Leviathan and Tekuma submarines, which entered service in 1999 and 2000. Israel signed the contract with ThyssenKrupp in 2022, at an estimated cost of €3 billion. The German government will finance 20% of the cost.
The submarine industry will be a major anchor in the German-Israel defense relationship in the coming decades. For comparison to the current peak of nearly €800 million in German defense exports to Israel in the first half of 2026 - the previous big jump was in 2023 with €327 million - ten times the amount in 2022. In 2024, German defense exports to Israel were €161.1 million.
In terms of Israeli defense exports to Germany, the Arrow 3 deal has placed Germany in second place on the procurement list. Data from the Stockholm International Peace Research Institute (SIPRI) shows that between 2021 and 2025, German procurement accounted for about 21% of Israeli defense sales. India was in first place, with 29%; and the US is in third place, with 7.8%.
Published by Globes, Israel business news - en.globes.co.il - on September 3, 2026.
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