Germany’s Shipbuilding Crisis: Bundestag Approves Financing for Alternatives to F126 Frigates

The Bundestag has approved funding for an alternative ship project worth about €7.8 billion to replace the F126 frigates.

Hartpunkt has reported the news.

Relevant changes have been made to the 2026 federal budget and the Bundeswehr’s special fund. The move comes in response to delays and problems with Dutch shipbuilder Damen Shipyards, the main contractor for the F126 program.

According to the decision, €724.7 million from the special fund may be allocated for the alternative platform in 2026, and another €878.2 million in 2027 as future budget commitments. From 2028, funding is to come from the regular budget, with €6.2 billion planned to be spent by 2033.

However, these funds, along with the financing already approved for the F126 program, remain frozen until the budget committee adopts an additional decision to lift the restrictions.

The Hartpunkt notes that dedicated funding for an alternative project gives the government significant room to maneuver. According to parliamentary data, the governing coalition can now:

• terminate the F126 contract if Damen cannot transfer the project to the German company NVL Group;
• immediately order another class of ship;
• or instruct NVL to continue building the F126 while the Navy relies on temporary solutions.

The only realistic alternative under consideration is the MEKO 200 design from TKMS, which could replace the F126 or serve as a partial substitute. The final decision will depend on talks between Damen, the Defense Ministry, and NVL, which will continue in the coming months. Time remains critical, as the German Navy needs new ships as soon as possible.

In early November, Damen Shipyards Group announced the start of months-long negotiations with the German Ministry of Defense on transferring primary responsibility for the F126 program to German partners.

The talks were prompted by problems at several stages of the project, in particular with CAD/PLM software, which caused delays. As a result, the Defense Ministry suspended payments over missed deadlines for certain construction milestones.

A final technical and legal assessment of whether such a transfer is feasible may take up to six months. A decision is expected in spring 2026, though agreement is not guaranteed.

Previously, members of the Christian Democratic Union of Germany (CDU) called for a complete suspension of the F126 construction program, citing serious delays and recurring issues. CDU lawmakers proposed halting the project, pointing to chronic schedule slips, insufficient coordination among contractors, and persistent cost increases.

The F126 program is one of the largest naval procurement projects in the history of the Bundeswehr. It covers the construction of four new-generation multi-role frigates, with an option for two more. The lead ship was scheduled for delivery in 2028, but that deadline is already expected to be missed.