Recasts after budget committee approves plans

By Markus Wacket

BERLIN, Feb 25 (Reuters) - Germany's ruling coalition will slash the size of a longer-term framework deal to purchase strike drones to 2 billion euros ($2.4 billion) from 4.3 billion euros previously envisioned as lawmakers seek tighter control over future budgets.

"Without parliamentary control, there would be a risk of billions in de facto budget commitments over a long period of time," a document outlining the deal passed by parliament's budget committee on Wednesday and made available to Reuters said.

As a first tranche, the committee approved a 540 million euro order for strike drones from German startups Helsing and Stark Defence on Wednesday, participants told Reuters.

However, a proposal drawn up by lawmakers on the committee, which is responsible for approving such deals, stated that the total contract value for each company must not exceed one billion euros.

The contracts for loitering munitions - drones loaded with explosives that hover over a potential strike area before swooping - are part of a rearmament push after Russia's attack on Ukraine.

Reuters this month reported that the contracts and the longer-term procurement framework were outlined in finance ministry documents.

The drones are initially intended to support Germany's Lithuania-based 45th Tank Brigade.

The rollback comes after Chancellor Friedrich Merz's government pushed through sweeping reforms to loosen fiscal rules in March last year.

While lawmakers at the time earmarked 500 billion euros in multi-year infrastructure spending to revive the economy, they also boosted defence funding to support Ukraine and meet higher contribution targets for NATO members.

In the document, the lawmakers made no reference to a recent debate in German media whether the government should rely on Stark as it counts Peter Thiel among its investors. The German-American entrepreneur was an early backer of U.S. President Donald Trump and Vice President JD Vance.

Germany's Defence Minister Boris Pistorius reiterated on Wednesday that Thiel's association with Stark was no grounds for concern.

"We're talking about a single-digit percentage stake without access to or insight into operational matters," he told journalists on the sidelines of the defence committee meeting in Berlin on Wednesday.

($1 = 0.8487 euros)

(Writing by Ludwig BurgerEditing by Madeline Chambers, Sharon Singleton, Philippa Fletcher)

((ludwig.burger@thomsonreuters.com; ))