Berlin is “losing its commercial credibility” over its ban on arms sales to Saudi Arabia and the move is affecting Europe’s “defence industry and ability to fulfill NATO requirements.”
European aerospace giant Airbus and the UK last week asked Germany to review its decision to halt arms sales to Saudi Arabia as it was hindering the fulfilment of sales agreements made with Riyadh.
Berlin first imposed a ban on arms sales to Saudi Arabia in March 2018 over the Yemen conflict.
It resumed sales to the Gulf kingdom in September the same year only to halt all sales again in November 2018 in the aftermath of Saudi journalist Jamal Khashoggi’s killing at the kingdom’s Istanbul consulate on October 2.
Germany is one of the world’s five biggest arms exporters, according to the SIPRI research group, but accounts for 1.8 percent of total arms sales to Saudi Arabia. It does, however, manufacture parts for the supply contracts of other countries.
Saudi Arabia on the other hand has emerged as the world’s largest importer of arms in a global arms market valued at over $7.76 billion in 2018, according to London-based global information provider IHS MArkit.
The German arms sale freeze affects a number of weapons deliveries to Riyadh, including the proposed $13 billion sale of 48 Eurofighter Typhoon warplanes to Riyadh, supply of parts for 72 Typhoon jets already delivered to Saudi Arabia, other weapons such as the A400M military transport, and shipments of Meteor air-to-air missiles which were to be equipped on the Saudi Eurofighter Typhoon and the Tornado fighter jets.
The Meteor is assembled by European leader MBDA, a subsidiary of Airbus, BAE Systems and Leonardo, while its propulsion system and its warheads are manufactured in Germany.
Eurofighter is built by a consortium of four founding countries – Germany, Britain, Italy and Spain – represented by Airbus, Britain’s BAE Systems and Italy’s Leonardo.
The British government and BAE Systems are responsible for ensuring the delivery of the jets to Saudi Arabia and the flow of its parts required for maintenance.
Both British Foreign Minister Jeremy Hunt and Airbus warned Germany of damage to its commercial credibility.
Airbus Chief Executive Tom Enders urged Germany to press ahead with plans to create common European regulations on arms exports, saying the issue posed a litmus test for Berlin's ambitions to foster a European defence policy.
By showing "a kind of moral superelevation" on arms exports, Germany was frustrating Britain, France and Spain, Enders said while mocking Berlin’s higher than average bar on moral values. He also warned that without a common European approach Airbus could consider manufacturing German-free products.
"It has been driving us crazy at Airbus for years that when there is even just a tiny German part involved in, for example, helicopters the German side gives itself the right to, for example, block the sale of a French helicopter," he added.
Airbus Defence and Space chief Dirk Hoke said that uncertainty about the issue could also threaten future Franco-German defence projects, including a planned Eurodrone that was heading for an initial contract by the end of the year.
The latest developments came amid talks between Berlin and Paris on common defence exports licensing procedures.
German magazine Der Spiegel on Friday reported that Germany and France had signed a defence agreement in January that aims for regulation of arms exports to third countries.
"It's true that Germany and France are in talks on the question of arms exports," government spokesman Steffen Seibert told journalists during a regular news conference.
He said Berlin and Paris were in talks to reach a formal agreement on the issue.
Even though progress has been made in recent months on a bilateral agreement, but Berlin is resisting making it legally binding, according to French sources familiar with the matter.
British Foreign Minister Jeremy Hunt in a letter written to his German counterpart Heiko Maas, said, "I am very concerned about the impact of the German government's decision on the British and European defence industry and the consequences for Europe's ability to fulfil its NATO commitments," Spiegel reported.
Canada and the US also expressed concern about arms sales to Saudi Arabia over the Yemen conflict and Khashoggi’s killing but commercial interests for both countries prevented any consequential action.
German weapons maker Rheinmetall also announced last month that it plans to sue Angela Merkel's government over the decision to stop all arms exports to Saudi Arabia, according to a Spiegel Online report.