Germany’s decision to place a unilateral embargo on sales of defence equipment to Saudi Arabia without consulting any other of its Europe based NATO allies involved on a variety of partnership based defence projects such as Eurofighter Typhoon is contemptuous in the extreme and needs to be reversed when it comes up for review on March 9th.
Opposition to the Social Democratic Party of Germany (SPD) led coalition that placed the embargo on sales of German manufactured defence equipment and components being sold to Saudi Arabia has, because of the domino effect that the unilaterally imposed decision has had on so many other partner nations, been very loud and rightly so.
The current ban and which, as already stated, expires on March 9th has already caused loss of confidence and significant damage to relations that several European countries, including France, Britain and Germany itself, have with Saudi Arabia and needs to be very quickly reversed.
The impact that the ban has on so many partner nations, economies, defence contractors and jobs is incalculable but the seriousness of the decision goes far beyond straightforward commercial aspects because in my view it impacts on the very basis of future defence and security cooperation with an allied state, one that European allies rely on for our own security.
The ruling by the SPD led ruling coalition and which impacts particularly on the UK, France, Spain, Italy and Germany because of the many German component parts to be found on defence equipment produced in Europe and particularly within many existing defence contracts that EU and NATO member states have with Saudi Arabia, has not surprisingly has a very serious domino impact right across the European defence industry.
France and Britain are amongst a number of allied European nations that have been seriously impacted by the German decision, one that in my view is not only damaging to the fundamentals of NATO itself but one that I might add, risks wrecking the emergence of an EU based defence partnership that was being led by Germany and France.
Last week British Foreign Secretary, Jeremy Hunt wrote to his German counterpart, Foreign Minister Heiko Maas expressing huge concern on the unilaterally imposed arms embargo and, just as his French counterpart had also done, Mr. Hunt has been absolutely right to waste no time expressing very serious concerns in relation to the potential implications that the decision taken by Germany has.
The UK Government has not been alone in laying out what it believes will be potentially long term damage to future relations with an allied state and indeed, confidence lost not only by Saudi Arabia but potentially by other allied states in the Gulf Region states in doing future business with European countries.
Quite apart from changing the long standing and very successful commercial and strategic defence relations that NATO members have with Saudi Arabia the unilateral decision taken by the Merkel SPD led coalition in placing a temporary ban on weapon sales to Saudi Arabia could well have an additional and even more serious impact – that of further reducing European regional influence.
The stance taken by Germany has already led to a very serious clash between French President Emmanuel Macron and German Chancellor Angela Merkel with the former calling the unilateral German action “pure demagoguery”. In taking the action Germany appears to believe that is ‘punishing’ Saudi Arabia in respect of the alleged actions of that country and/or specific individuals involved in the murder of Jamal Khashoggi.
However and as President Macron made abundantly clear last week, sales of weapons to Saudi Arabia “have nothing to do with [the death of] Mr. Khashoggi” and his view is that “one shouldn’t mix everything up”.
For UK, Italian, Spanish and German defence equipment suppliers that have been hit by the German action the primary issue at stake surrounds export licence requirements for German manufactured parts in the four country collaborative Eurofighter Typhoon Swing-Role Fighter programme for which German and Spanish subsidiaries of Airbus are responsible for 46% of manufacturing, while British and Italian defence contractors in the form of BAE Systems and Leonardo are responsible for the remaining 54%. The ban on exports to Saudi Arabia impacts on all the countries involved including Germany but it is Britain which has long standing strategic defence partnership with Saudi Arabia that is impacted hardest. Many other defence companies have also been hit by the decision as German built component parts requiring export licences are involved in air, land and maritime equipment purchased by KSA.
Not surprisingly, with various support contracts in place on Eurofighter Typhoon, Panavia Tornado and other defence equipment that has German built component parts supplied by European defence contractors as part of Government to Government contracts, Saudi Arabia has already been reported to be seeking compensation.
Citing Mr. Hunt’s letter to the German Foreign Minister Heiko Maas, de Spiegel was quoted suggesting that in his letter Mr. Hunt urged Berlin to exempt major European defence projects such as Eurofighter Typhoon and the Panavia Tornado aircraft (these having been supplied to KSA through an earlier partnership arrangement) from the weapons embargo. However, while that would be a useful part of the reverse process the danger is that it would leave too many loose ends in respect of other defence contracts that KSA has placed. Better that the ban is removed altogether and that Germany and other countries use diplomatic pressure on KSA as the way forward.
I said last week that I view that the export licence issue that surrounds the German ban on exports to the Kingdom of Saudi Arabia (KSA) to be one for governments alone to address and I made plain a view that it is in the interests of all Eurofighter Typhoon collaborative partners – UK, Italy, Spain and Germany – that the four governments address the seriousness of the issue as a matter of absolute priority. Failure to do so could end any future prospect of collaborative partnership projects.
Airbus has not surprisingly been very vocal in respect of the Saudi export ban with its CEO, Tom Enders reported as saying that ‘the views of the SPD and its Deputy leader, Rolf Muetzenich, on foreign and security policy are totally inconsistent and that they not only torpedo and destroy the fundamentals of European and Franco-German defence cooperation but that they isolate Germany in Europe’.
Believing the German action to be “divisive” Mr. Enders is also on record as warning that “German free” product lines might well need to be developed and he worries that Germany will be increasingly seen as being an unreliable partner – something that he quite righty considers to be the last thing that Europe needs right now and that it is pure arrogance for Germany to claim the moral high ground.
Dirk Hoke, CEO of Airbus Defence and Space talked of the German embargo posing “lasting damage to the German relationship with France if no serious, long-term solutions can be found. Germany is simply viewed as unreliable on this issue at the moment.”
The hope is that the ban will now be lifted on March 9th when the review process takes place. Should that not be the case the implications for European Governments and all defence contractors involved could be very serious indeed. To think that it might be Germany that is responsible for potentially ending the prospect of future European collaborative defence projects let alone in killing export potential by allowing Europe as a whole to be seen as being an unreliable partners with whom to do business is hard to contemplate. The wider ramifications for German industry could also be massive in the longer term. Diplomacy is the way forward and the hope is that common sense will prevail on March 9th as it needs to do in the interests of all European governments and those involved in existing and future defence collaboration projects and exports with KSA.
CHW (London – 27th February 2019)
Howard Wheeldon FRAeS
Wheeldon Strategic Advisory Ltd,
M: +44 7710 779785