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German Arms Industrys Outlook Uncertain

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Published on : Aug 20, 2014

During a recent meeting between representatives of the German ammunition and arms industry and the German Ministry for Economic Affairs, the unionists discussed concerns about the declining approvals for German arms shipment contracts. Workers’ representatives had, earlier in July 2014, written to the German minister of economic affairs Sigmar Gabriel stating that these curbs on approvals were posing a threat to jobs and revenues in the German arms industry. A number of corporations in this sector are struggling to add new contracts to their kitty. The workers’ representatives also expressed fears that this could, in the long term, adversely impact the overall defense and security scenario in Germany.

When Ernst-August Kiel, a ThyssenKrupp Marine Systems workers’ representative met the German minister, the two reportedly debated a few risky deals that involved fewer follow-up orders and unsubstantial order books.

Gabriel, on the other hand, has on many occasions expressed his disapproval of outgoing government’s approach to weapon export approvals.

In 2013, an arms export report stated that Germany approved arms deals worth US$4.8 billion (3.6 billion euros) for ‘third countries’. These are the countries that are not members of the European Union or NATO. Three years earlier, this figure was a mere 1.4 billion euros.

According to German political principles pertaining to military equipment and armament export, weapons cannot be exported to crisis-hit areas, except in a few cases. These rules came into effect in 2000. In the event a German company intends to sell ammunition and arms to a ‘third country’, the Ministry for Economic Affairs’ permission is a prerequisite. However, these permissions have dwindled since Gabriel took charge as the new economic minister. Fears are now being voiced that nearly 100,000 jobs in the German defense industry may be at risk.