Signal No. 100 · Weapons free

The alliance agreed at Ankara to convert the Baltic Air Policing mission into an air defence mission — the first change to the mandate’s type since allied jets began patrolling Baltic skies in 2004. Lithuanian President Gitanas Nausėda, announcing the decision, named the mission’s transformation into “a NATO air defence mission” as one of the summit’s main outcomes. The policing mission was built for peacetime: intercept, identify, escort — and, if a shot was ever in question, authority that had to be assembled case by case above the cockpit. The new mandate vests engagement authority in the Supreme Allied Commander Europe and delegates it down the military chain, through the air operations centre at Uedem, to the aircraft. Estonian Defence Minister Hanno Pevkur located the change in what SACEUR and the pilots may now decide themselves: pilots “no longer need to communicate with the capital... there are no longer any restrictions preventing the pilot from pressing the button.” Ämari is upgraded to a designated NATO operational air base. No source gives an effective date, and nations may still attach caveats to their own jets.

The mandate catches up with what the mission has already been doing case by case — and closes a seam this publication named in March: a mission built for manned airspace violations, facing an uncrewed war. Its first kinetic engagement of a drone since the full-scale invasion began came, on public evidence, only in May, when a Romanian jet flying from Šiauliai downed a suspected Ukrainian drone over Estonia; on 8 June a French Rafale shot down a drone over Latvia — with the engagement decision taken, Latvia’s defence minister said at the time, by NATO command. Estonian Foreign Minister Margus Tsahkna said Tallinn had worked toward the new mandate since the twelve-minute incursion by Russian fighter jets into Estonian airspace last year — “that is exactly what we have achieved.” The mission that spent two decades performing deterrence — Nausėda’s own description of the old mandate — is now sized, in rules if not yet in magazines, for the drone war that has crossed into alliance airspace repeatedly since spring.

The Bundestag’s Haushaltsausschuss (budget committee) approved 16 defence procurement submissions worth more than EUR 9.5 billion at its final session before the summer recess — on top of 44 already cleared this year, 60 in six months. The headline decision reverses last weekend’s stall: the firm order for four MEKO A-200 DEU anti-submarine frigates from TKMS — EUR 6.3 billion at approval, a shade under the EUR 6.63 billion the submission had carried, with options for four more at EUR 5.3 billion and first delivery around 2029 — had been pulled from the agenda amid coalition doubts, as Signal No. 97 reported on Monday, and cleared committee three days later with a Maßgabe, a binding condition, attached. The batch also clears the Combat Fighter System of Systems Nucleus (CFSN) at slightly more than EUR 220 million — the Helsing mission-system award Signal No. 92 detailed in June, with this committee submission then still pending: a state-owned software framework meant to let uncrewed fighters and remote carriers fight as one, the national successor to FCAS’s surviving drone layers. Alongside it: a Joint Fire Support Team framework of up to 300 systems worth around EUR 750 million (first call-off roughly 50 systems for EUR 100 million), five Combatant Craft Medium boats for the special forces, a shipborne high-energy laser (below), munitions, rifle optics and protected trucks.

The same day showed what the frigate decision costs the company that was building the cancelled one. Reuters reported Rheinmetall has frozen roughly 900 of the 1,000 positions it planned for its naval division after the F126 cancellation — about 100 were hired before the freeze — with the company flagging up to EUR 300 million in lost 2026 revenue if replacement orders do not land. The committee’s EUR 6.3 billion went to the yard that builds an exportable design already in serial production; the workforce assembled for the bespoke one is on hold.

In his government declaration on the Ankara summit, Chancellor Friedrich Merz confirmed to parliament that American Tomahawks “will be acquired by us and stationed in Germany” — Berlin, he said, is “closing a significant strategic gap in our defence” while working in parallel to develop and station European systems of its own. Defence Minister Boris Pistorius and US Defense Secretary Pete Hegseth signed a letter of intent on 7 July in which, per Handelsblatt, Washington commits to granting the export approval in August. The quantity is officially secret — reports cite up to 400 Tomahawk Block Vb rounds worth more than EUR 1 billion, fired from Lockheed Martin’s Typhon launcher — a twelve-metre container of four vertical-launch cells to a trailer, four launchers to a system. The Block Vb reaches up to 2,500 kilometres; the Bundeswehr’s air-launched Taurus stops around 500, and no European state fields a ground-launched system in the class — Britain’s Tomahawks fire from submarines, France’s naval cruise missile reaches about 1,000 kilometres.

What no one will name is a delivery date, and the reason sits in the depots: by late-March US reporting, American forces had fired more than 850 Tomahawks in the Iran war — roughly nine times what the Pentagon buys in an average year. Berlin’s first request sat unanswered for a year, and Pistorius at one point cancelled a Washington trip after failing to secure a meeting with Hegseth, per the FT. The original plan was American: a US unit with Tomahawks, SM-6 interceptors and newly developed hypersonic weapons was to deploy to Germany from 2026 under a 2024 agreement struck against the nuclear-capable Iskanders in Kaliningrad — free, with American crews — until the Pentagon cancelled it in May amid the Iran war, the reversal that produced Berlin’s four-track deep-strike plan, whose first track this purchase now executes, as Signal No. 86 set out in June. The government also says it will carry roughly half of the USD 50 billion European deep-strike coalition launched at the same summit — the long-term replacement for what it is buying now.

Cologne engine manufacturer DEUTZ agreed to acquire 100 per cent of FFG Flensburger Fahrzeugbau — recovery vehicles, armoured personnel carriers and special vehicles for the Bundeswehr and NATO customers, more than 1,100 employees, around EUR 760 million in 2025 revenue against an order book running at a multiple of that — for roughly EUR 1.0 billion in cash and EUR 0.6 billion in newly issued DEUTZ shares. The share component leaves the sellers up to 29.9 per cent of the enlarged company: a fraction below the threshold at which German takeover law would oblige them to bid for the rest, and enough to make Flensburg’s owners the anchor shareholders of the group absorbing them. Shareholders vote on 24 August; closing is expected by early 2027. FFG’s WiSENT recovery vehicles and ACSV G5 combat-support vehicles serve NATO customers and Ukraine — and its Flensburg works overhaul the Bundeswehr’s wheeled and tracked fleets, from the Wiesel to the Leopard 2: repair as recurring revenue, by the company’s own account.

The acquisition closes a sequence rather than opening one: a minority stake in ARX Robotics as lead investor last October; on Tuesday, the start of series production of ARX’s Gereon unmanned ground vehicle at DEUTZ’s Ulm plant, first deliveries to Ukraine from late summer; two days later, the vehicle builder itself. What DEUTZ is not buying is the contested centre of the market — turrets, guns, protection, where Rheinmetall and KNDS hold the German field between them. The assembled portfolio is the layer beneath the fighting vehicle: the engine, the recovery and repair base, and uncrewed platforms cheap enough to build in series. The open question is execution — DEUTZ last built complete vehicles as Magirus-Deutz, divested four decades ago, and it is buying at prices set three years into a boom, though chief executive Sebastian Schulte has run a systems house before: he was CFO of thyssenkrupp Marine Systems, the yard group that took the frigate order on Wednesday. And the financing already tells the industrial story: EUR 600 million of the consideration is DEUTZ’s own paper, purchasing power that exists because investors re-rated an engine company as a defence stock.

Three sources close to the Kremlin told Reuters that Putin is rejecting negotiation — one who meets the president regularly put a “high probability” on escalation in the coming months, and said Ukraine’s strikes on refineries and ports have strengthened his resolve rather than softened it. Putin recently rebuked advisers who proposed a ceasefire along the current lines, the same source said, and treats taking the rest of Donbas as a matter of principle; a senior Ukrainian official said Kyiv’s intelligence points to preparations for new operations or “a possible attack on another European country.” The shape under discussion is specific. Andrei Ilnitsky, a former defence-ministry official, used a Kommersant column to sketch a next phase: strikes on NATO bases in the Baltic states and Romania, and on the EU plants building long-range drones and missiles for Ukraine. Asked about it, Kremlin spokesman Dmitry Peskov did not reject the idea, saying Russia must strengthen its security. RUSI’s Jack Watling reads the scenario not as a bid for open war with NATO but as isolated attacks designed to divide the alliance over the response — and as domestic justification for the mobilisation Putin has so far avoided.

The three-month-old ceasefire is functionally over. Hours after Trump declared it so at the summit, the United States struck some 90 targets across Iran on Wednesday — following 80-plus on Tuesday, the largest waves since the truce, including blasts near the perimeter of the Bushehr nuclear plant, which Iranian state-linked media said was not itself damaged. The IRGC answered with missile and drone strikes on two US-linked bases in Kuwait and two in Bahrain. Brent settled up 5.2 per cent at USD 78.02. Europe’s institutional reflexes ran a day behind the war: EASA, the EU’s aviation safety agency, let its conflict-zone bulletin for the Middle East and Persian Gulf expire on Wednesday, citing “the agreed ceasefire agreements and the overall reduction in short-term tensions” — hours around the resumption of the strikes it existed to warn against (bulletins for Iran, Iraq and Lebanon remain). High Representative Kaja Kallas called Iran’s attacks on Bahrain and Kuwait “unacceptable,” said Iran’s recent attacks on ships near the Strait of Hormuz violate the reopening commitment it made under the ceasefire memorandum, and announced EU foreign ministers will meet their Gulf counterparts on Monday on freedom of navigation in the strait and the Red Sea.

Ukraine’s General Staff said drones hit 12 more tankers, a tugboat and a dry-cargo ship in the Sea of Azov overnight — vessels it said supply fuel to the Russian military and move oil in circumvention of sanctions — bringing the four-day claimed total to 36, including 32 shadow-fleet tankers. “They were all trying to deliver fuel to Crimea,” the defence ministry said, in a campaign that has already put the peninsula under a state of emergency; the claim outruns the acknowledgment, with Rostov’s governor confirming two tankers hit. The same night, SBU drones struck the Tvernefteprodukt oil depot in Tver and Lukoil’s Yugnefteprodukt depot in Stavropol Krai, and Reuters sources said the Saratov refinery has stood idle since Wednesday’s strike on its only crude unit — days after Omsk, Russia’s largest, halted too. The effect is now macroeconomic. Moscow banned diesel exports on Wednesday — Russia is the world’s second-largest diesel exporter — and Europe’s wholesale diesel premium over crude spiked to USD 60.70 a barrel; the FT calculates the fuel crisis now touches some 50 million Russians. President Zelenskyy’s term for the campaign is “long-range sanctions.” The air war ran the other way: Russia fired two Iskander-M ballistic missiles from Crimea and 94 strike drones into Ukraine; 72 drones were downed or jammed, and both ballistic missiles struck — by the Air Force’s own nightly tallies, the third consecutive night on which every ballistic missile aimed at Ukraine arrived.