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... Reuters spoke to two dozens executives, investors and policymakers to examine how Germany -- Europe's largest economy -- aims to play a central role in the rearming the continent.

Chancellor Friedrich Merz's government views AI and start-up technology as key to its defence plans and is slashing bureaucracy to connect startups directly to the upper echelons of its military, the sources told Reuters.

Shaped by the trauma of Nazi militarism and a strong postwar pacifist ethos, Germany long maintained a relatively small and cautious defence sector, sheltered by U.S. security guarantees.

Germany's business model, shaped by a deep aversion to risk, has also favoured incremental improvements over disruptive innovation.

No more. With U.S. military support now more uncertain, Germany - one of the biggest backers of Ukraine - plans to nearly triple its regular defence budget to around 162 billion euros ($175 billion) per year by 2029. ...