Germany cancels €10 bn F126 frigate program amid massive cost overruns

Germany’s defence ministry has halted the F126 frigate programme, the navy’s largest shipbuilding project in 75 years. The estimated cost per vessel has risen by €3 billion, a 228 % increase over the original budget, prompting doubts about the program’s affordability.

The cancellation follows persistent delays, technical problems with software, sensors and stability, and difficulties with the Dutch shipbuilder Damen Schelde Naval Shipbuilding. Instead, the ministry plans to procure eight smaller MEKO‑A200 frigates from domestic shipbuilder TKMS, with at least four ships already ordered. The shift caused Rheinmetall’s share price to fall up to 16 % while TKMS shares rose about 12 %. The decision marks a major re‑assessment of Germany’s naval procurement strategy and will affect the national shipbuilding sector and related defence contracts.