Germany is aware of the ambitious goals of South Korea's Defense Acquisition Program Administration, but talks are needed for any specific cooperation to happen, Georg Schmidt, German ambassador to South Korea, told reporters at a briefing on Tuesday.

DAPA aims to achieve significant advancements in Korea's defense industry by enhancing transparency, efficiency and expertise in national defense procurement, promoting a competitive system and realizing industrial growth through export promotion and investment attraction.

Germany shifted its previously strict arms export policy due to the Ukraine war, emphasizing continued arms support for Ukraine's defense.

"The German government fully understands South Korea’s position," he said, highlighting the German government's 1-trillion-euro ($1.08 trillion) package.

He said that the exact allocation of the budget is still undecided.

Germany has never before approved such a large-scale financial package in such a short time, and this is seen by many as a result of concerns about potential policy shifts in the US and NATO.

"This package is not aimed against the US; rather, it aligns with longstanding US requests for Europe to increase its defense spending," according to Schmidt.

He said that Germany sees an escalating threat from Russia, which has transitioned into a wartime economy.

"Reports indicate that 60 percent of Russia’s national budget is now dedicated to war. Also, Moscow has issued aggressive statements targeting Poland, Germany, France and the UK," Schmidt warned.

Asked about his government's cooperation with South Korea's Defense Acquisition Program Administration(DAPA), the envoy said that both sides have cooperative relationships in the defense industry.

“A notable example is South Korea’s purchase of German-made Taurus missiles," he said.

The German-origin Taurus missile is a long-range air-to-surface missile with a 500-kilometer range, designed for precision bombing of key North Korean facilities. It can target Pyongyang from central South Korea, and its range covers all of North Korea if fired near Seoul, allowing any target to be reached within 15 minutes.

But the envoy said that cooperation extends beyond government-level agreements because German and South Korean defense companies interact in both collaborative and competitive capacities.

"From the perspective of German companies, South Korean firms can also be seen as competitors,” said Schmidt.

Asked about policies on North Korea under Germany's likely new chancellor, Friedrich Merz, the ambassador suggested that policies on Asia are more likely to align with the chancellor's speech at the Korber Global Leaders Dialogue.

In the speech, Merz has warned about the growing alliance between North Korea, China, Russia and Iran, which is destabilizing global regions and challenging liberal democracies. According to Merz, this axis provides mutual support, with Iran supplying drones, China providing semiconductors and North Korea sending troops.

In return, Russia aids Iran, China and North Korea. Merz also thinks that the risk of North Korean missiles is potentially threatening the US mainland.

“In Europe, decisions are not just about cost but also about efficiency," Schmidt said, citing the example of over 15 different types of armored vehicles in operation across Europe.

“Strengthening the competitiveness of the defense industry is one of Germany’s key tasks," Schmidt added.

But he also acknowledged concerns in South Korea’s defense industry because of European military expansion and the prioritization of European-made weapons.

"Germany has historically imported many weapon systems, including the controversial purchase of US F-35 fighter jets worth tens of billions of euros. The key factors for Germany are domestic production capabilities and production speed," he said, pointing out that Europe's labor shortages affect defense firms' ability to meet deadlines.

"This is why efficiency, alongside cost, is crucial in defense procurement decisions," he added.

South Korean defense companies are closely monitoring whether the increase in European defense spending will result in budgets being limited to European firms or open up opportunities for international partnerships. South Korea’s strong defense ties with Poland suggest further cooperation possibilities with other European nations.

"Korean firms are particularly interested in whether there will be opportunities for them to participate," Schmidt noted.