What is the reasoning why Germany is permitted a military industry but their WW2 consorts cannot?

I think you are confused on the core issue.

There can be no reasoning for it, because there is no treaty barring military industry in the former Axis nations. Immediately after WWII in Europe ended, the Cold War on the still bloody exact same ground started. There were new players on both sides, but both struggles were an East-West thing. Those nations in Europe not under Soviet control were under direct, openly-stated threat to become under Soviet control. As a side note, that even included Japan, against whom Russia had declared war days before the war’s end. Thus all the European nations now aligned with the West continued their national programs of building, fielding, and supplying their national defense efforts—they just pointed their weapons the other direction.

All of the Axis nations have military industry, and all of them are Allied nations today. Allies, Coalition, whatever—they’re all the good guys now.

West Germany was disarmed for a while as thoroughly as Japan, with defense split between France, Britain, and America. Both former Axis powers had no militaries or any armed forces for the immediate postwar period. The JSDF was formed in 1954 (a year after the end of the Korean War and the same year as the partition of Vietnam) and the Bundeswehr in 1955 (the same year as the Warsaw Pact’s founding).

The major difference between the two countries is that Germany was, effectively, the western border of the Soviet Union. Scandinavia was mostly only for subs and the Alps and Balkans were too messy and cumbersome. Therefore Germany needed to be rearmed to help in its own defense more thoroughly than Japan, which still maintained potential economic and military dominance in Asia almost to this day.

People often say Germany is too big for Europe and too small for the world, but West Germany, a Rhinelander and Bavarian federation stripped of Prussia and its born-from-a-cannonball tendencies, seemed to be a perfect fit for a nascent and fraternal EEC and NATO. The Kniefall and general pacifistic revisionism of the Bundesrepublic also helped.

The West German navy eventually became known as one of the best, if smallest, of the allied navies, and the Heer has become known as one of the finest and most reluctantly employed militaries in NATO.

Not that the land army would have mattered much, given how almost all Cold War plans began with the sentence “”After Germany is destroyed…”

Germany’s other former co-belligerents were mostly absorbed by the Soviets. After 1990 many of them cut down their armies, and many others started turning them against the Russians, most notably Poland and the Baltics. For the others—Czech, Slovakia, Hungary, Romania—it’s not that they were disarmed so much as they aren’t willing to pay to keep themselves armed. There’s not much difference between military spending as a percentage of GDP in east or west. The only real variable is “degree to which we worry about Russia.”

Because both sides wanted their German mercenaries sitting on the bull’s eye of nuclear holocaust to be well-equipped.

I am not sure which ’consorts’ have been forbidden an arms industry?

Austria has one, so does Hungary, so does France, so does Italy. So does Japan for that matter.