Weapons War

Arms and the Man

Sigmar gabriel dpa8
Sigmar Gabriel, economics minister, is a driving force in defense policy.
  • Why it matters

    Why it matters

    Germany is the world’s third-largest weapons exporter but the SPD wants to restrict exports to repressive regimes, something German industry warns could cost jobs.

  • Facts

    Facts

    • In 2013 Germany exported €5.8 billion worth of arms.
    • 62 percent went to non-EU or NATO countries such as Algeria, Qatar and Saudi Arabia.
    • The industry employs 98,000 people in Germany.
  • Audio

    Audio

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The head of Germany’s Social Democratic Party, Sigmar Gabriel, has leverage over whether, how and if Germany’s defense companies can sell arms abroad.

Mr. Gabriel, the deputy chancellor and leader of  the junior partner with Chancellor Angela Merkel’s Christian Democrats, is economics minister. Since his ministry controls export licenses for weapons and other military equipment, Mr. Gabriel effectively decides where and when German defense companies can sell their wares.

Since taking over the ministry last September, Mr. Gabriel has exercised this power frequently, much to the chagrin of the country’s arms industry and members of Ms. Merkel’s Christian Democrats.  So much so that they are reportedly preparing a counter-attack to loosen his influence over one of the country’s most important industries.

Germany is the world’s third-biggest arms exporter after the United States and Russia. But defense companies say Mr. Gabriel’s policy could ruin the industry, leading to the loss of thousands of jobs.

That has not fazed the SPD leader. His ministry is holding up thousands of permit applications for arms exports.

In recent statements, Mr. Gabriel has said that arms sales to countries outside the European Union and the NATO alliance must be closely scrutinized.

His ministry is holding up the export of 800 Leopard 2 battle tanks to Saudi Arabia, an order that could be cancelled because of the delay.

Germany’s military role in the modern era remains highly controversial domestically, and the SPD has been vocal in trying to limit the sending of German troops and arms to conflict regions. Most objections are grounded in the long-held post-World War II German policy of blunting German military involvement.

But as trouble spots around the world multiply, Germany is being increasingly pressured by the United States and other western European nations to boosts its military role, which would require a loosening of the post-war political taboo on foreign involvement.

Mr. Gabriel has justified his cautious export policy by pointing to the fighting in Ukraine and the Middle East, where he has argued that German arms could fall into the wrong hands.  Mr. Gabriel says his restrictive policy is in tune with Germany’s non-interventionist post-war credo.

He has based his position on a set of restrictive arms export rules adopted in January 2000 by a previous coalition of Social Democrats and Greens, a traditionally pacifist political party. Those political principles governing the export of weapons and other military equipment cited human rights concerns and set a high barrier to the export of German weaponry.

According to those principles, exports outside the European Union and NATO should be the exception, and should only occur when such sales are in Germany’s security interests.

Mr. Gabriel has criticized the previous coalition of Ms. Merkel’s CDU and business friendly Free Democrats for allowing far too many exceptions to this rule.

“There are basic rules in Germany for exporting arms, and they’ve been ignored in the last few years. Now we are going to observe them again.”

Sigmar Gabriel, Economics Minister

In 2013, Germany exported €5.8 billion ($7.4 billion) worth of arms and other military equipment, an increase of 24 percent on the previous year. And 62 percent of these exports went to non-NATO countries such as Algeria, Qatar and Saudi Arabia.

That is something the SPD leader wants to see changed.

In July Mr. Gabriel told a television interviewer: “There are basic rules in Germany for exporting arms, and they’ve been ignored in the last few years. Now we are going to observe them again.”

But his restrictive policy is infuriating many in Ms. Merkel’s own party and now they are going on the offensive.

According to information obtained by ARD, a public television broadcaster, a group of CDU lawmakers are preparing to attack Mr. Gabriel in a position paper. The CDU’s working group on economy, energy, defense and foreign policy is demanding that the minister change his approach.

The paper, which ARD has seen, states: “As an immediate measure, the Federal Economics Ministry must reinstate licensing procedures for weapons products, which have been de facto suspended, and work through the backlog of applications. In accordance with the coalition agreement, the outstanding licensing decisions should be made immediately, as long as they meet the strict political principles for the export of war weapons and other military equipment from 2000.”

The CDU politicians fear for the survival of many companies in the sector and also are concerned that Germany could become isolated within NATO.

Rheinmetall tank dpa
Made in Germany, a Rheinmetall tank owned by the Bundeswehr. Source: DPA

 

The German Armed Forces or Bundeswehr have been significantly slimmed down since the height of the Cold War. And in 2010, numbers were cut again from 240,000 to 163,500, while compulsory military service was ended in favor of a professional army.

The defense companies have compensated for reduced domestic orders by selling abroad.

According to the latest figures from the Federation of Germany Security and Defense Industries, or BDSV, some 98,000 people were employed in the German defense industry in 2011. The industry umbrella group says that around 200,000 more jobs rely on orders from these companies.

Yet, some of those jobs could be affected if the industry makes good on threats to shift some business abroad. Armin Papperger, president of BDSV and chief executive of Rheinmetall, a military technology and auto parts supplier, said that the German government’s increasingly restrictive export policy, as well as reduced domestic demand, might leave the industry with little choice.

“Either we will continue to reduce capacities and thus jobs as well – or we’ll go abroad,” Mr. Papperger said, in remarks to the Süddeutsche Zeitung newspaper published on Saturday. “Other countries like Switzerland, France or the United States would be happy if we were to invest there.”

“Either we will continue to reduce capacities and thus jobs as well – or we’ll go abroad.”

Armin Papperger, , President, Federation of Germany Security and Defense Industries

In March Germany halted the export of €5 million worth of military equipment to Russia, following its annexation of Crimea. And Mr. Gabriel also prevented Rheinmetall from delivering a combat training center to Russia.  The company is seeking compensation from the economics ministry for the loss of business.

The minister has said he will attempt to fast-track licensing of so-called dual-use equipment that can also be used for military and civilian purposes. And he has advised German arms manufacturers to rethink their business models, by focusing on civilian products instead. He plans to meet with industry and labor representatives in November to discuss the best way forward.

So far, Chancellor Merkel has kept out of the increasingly heated debate over Germany’s arms exports. A crafty politician, Ms. Merkel needs the SPD to rule in her national coalition. So far, she has let her coalition counterpart effectively set policy on exports, but her patience may be coming to an end.

With members of her own party voicing increasingly frustrated by Mr. Gabriel’s perceived incalcitrance, it may not be possible for the German chancellor to stay above the fray much longer in what looks like an acrimonious divide between the coalition partners.

The author is an editor with Handelsblatt Global Edition. Contact her at: dowling@handelsblatt.com.

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