Volkswacht Bodensee - German arms maker Rheinmetall signs 5.7 bn euro deal with Romania

Air defence systems, almost 300 combat vehicles, naval vessels and ammunition are to be sold to the NATO member on the alliance's eastern flank, Rheinmetall said in a statement.

The news came days after a drone smashed into an apartment building in Romania, which borders war-torn Ukraine, triggering furious condemnation from NATO allies.

Russian President Vladimir Putin said there was no evidence to blame his country.

Rheinmetall CEO Armin Papperger hailed Tuesday's deal as a "significant success".

"Together with our Romanian partners, we will establish a far-reaching defence ecosystem here," he said.

"This also confirms our ambition to further expand our role as one of the industrial pillars of European security."

Deliveries of the new systems are set to begin in 2028 and be completed by 2030, Rheinmetall said.

A significant proportion of the armaments will be produced in Romania, and thousands of jobs are set to be created, the Duesseldorf-based group said.

The deal falls under the European Union's SAFE (Security Action for Europe) lending initiative created to provide EU countries with loans at lower rates to help them rearm.

European countries have been racing to bolster their militaries since Russia launched its full-scale invasion of Ukraine in 2022, and Rheinmetall has been a major beneficiary of the rearmament.

M.Schneider--VB