BGA Global Brief: European Defense Debate on German Export Controls and Possible Solutions

Speed Read

  • The current German arms export policy restrictions is being intensely debated in the European foreign policy community as Berlin risks to endanger joined defense projects. After the murder of journalist Jamal Khashoggi, the German Grand Coalition imposed arms export restrictions, affecting also military equipment produced by German companies and other European member states or products, containing German components.
  • French and other European defense companies are increasingly encountering difficulties in obtaining the necessary export licenses as soon as German components are contained in French and other European products. This can lead to companies having to compensate the buyers for default penalties or claims for recourse and thus threatens their economic existence.
  • European industry-partners consider removing German components from their products in order to make them German-free and therefore less susceptible to subsequent export restrictions. This increases the pressure on the German and the entire European defense market. Policy makers and industry leaders argue that Germany’s export policy needs to be more transparent. Germany needs to remain a trustworthy and predictable partner.
  • Germany and France have a long history in joint defense cooperation and, over the last decades, have pushed forward with European integration in foreign and defense policy. This thriving relationship needs to continue and must be re-enforced.

Three scenarios:

a.) Most likely the German moratorium will be prolonged again under the current Grand Coalition, which will create more insecurity amongst its partners and only adjourn the situation.

b.) Since non-agreement could seriously damage the Franco-German relationship, an agreement with France will be reached, where no veto-right will be applied up to a certain percentage of the total product. With Ursula von der Leyen as President of the European Commission, the issue will become a top priority on European level.

c.) Or, worst case scenario, but very unlikely to happen, no agreement is reached on export control, leading to unforeseen consequences for the Franco-German relationship and industrial cooperation.

Solutions:

  • A dialogue between industries and the two governments must aim to restore confidence in the respective arms export policies. A new edition of the Schmidt-Debré agreement could be a desirable solution.
  • If one considers the European defense market as a whole, there is a clear need of a common European approach. Further steps should be based on a common arms export policy, as set out in the Council Common Position.
  • A general export ban on military equipment to non-EU countries would be counterproductive and detrimental to domestic industries. Importing countries of military equipment could be categorized according to a bilaterally agreed or EU-wide index, which would be reviewed and adjusted on a regular basis. At the same time, supplies of certain arms and weapon types could be linked to this risk index.

Defense and Security Team

Author

Matthias Hieber

Matthias Hieber

Senior Consultant

Matthias’ Bio
Matthias is a Senior Consultant at BGA. He started his career as Research Assistant at Revue Défense Nationale, a French journal on security policy, in Paris and at the British Institute of International and Comparative Law, London. Before joining BGA, he worked in Chambers at the United Nations International Criminal Tribunal for the Former Yugoslavia (UN-ICTY), within the Terrorism Division of the Council of Europe and at the Federal Academy for Security Policy (BAKS) in Berlin. He also gained experience as Consultant for the private sector.

Matthias is also member of several professional networks, including the Institut des Hautes Études de Défense Nationale (IHEDN), the Geneva Centre for Security Policy (GCSP) and the German Council on Foreign Relations (DGAP).

Education
Matthias studied Political Sciences and International Law at University of Zurich and University of Vienna. He is bilingual French-German and proficient in English. Furthermore, he received enhanced professional training in Terrorism Studies from University of St. Andrews.

Partners & Advisors

Ben Hodges

Ben Hodges

Partner
Ben’s Bio

Lieutenant General (Retired) Ben Hodges is a BGA Partner and is a former Infantry Lieutenant in Germany. He commanded Infantry units at the Company, Battalion and Brigade levels as the 101st Airborne Division and in Operation IRAQI FREEDOM.  He also served in an operational assignment as Director of Operations, Regional Command South, in Kandahar, Afghanistan.

Lieutenant General (Retired) Hodges has also served in a variety of Joint and Army Staff positions to include Tactic Instructor at the Infantry School; Chief of Plans, 2nd Infantry Division in Korea; Aide-de-Camp to the Supreme Allied Commander Europe; Army Congressional Liaison Officer; Task Force Senior Observer-Controller at the Joint Readiness Training Center, Fort Polk, LA: Coalition/Joint – 3 (CJ3) of Multi-National Corps-Iraq in Operation IRAQI FREEDOM; Chief of Staff, XVIII Airborne Corps at Fort Bragg; and Director of the Pakistan Afghanistan Coordination Cell on the Joint Staff, Chief of Legislative Liaison for the United States Army, and Commander, NATO Allied Land Command.  His last Military assignment was as Commander, United States Army Europe from 2014 to 2017.

Lieutenant General (Retired) Hodges currently holds the Pershing Chair in Strategic Studies at the Center for European Policy Analysis.

Ben’s Education

Ben graduated from the United States Military Academy and was commissioned in the Infantry.

Joachim Bitterlich

Joachim Bitterlich

Paris
Joachim’s Bio

Joachim Bitterlich is a BGA Advisor and was Ambassador of the Federal Republic of Germany to NATO and Spain. Before holding these roles, he was the Foreign and Security Policy Advisor to Chancellor Helmut Kohl, working primarily on European Integration Policy.

Entering the Federal Foreign Service in 1976, he also held posts in Algeria and Brussels. From 1993 to 1998 he was Head of the Chancellery’s department for Foreign, Security, and Development Policy.  More recently, he was Executive Vice President International Affairs of Veolia Environment in Paris, where he was responsible for the German market.

Education
He studied Law, Economics and Politics at the University of Saarbrücken, and was research assistant at the same university. He was also student at the French National School of Administration (ENA) in Paris (1974-75).

Julianne Smith

Julianne Smith

Washington
Julie’s Bio
Julie is an Advisor to BGA and previously served as the Deputy National Security Advisor to U.S. Vice President Joe Biden from April 2012 to June 2013. Prior to that role, she was Principal Director for European and NATO Policy in the Office of the Secretary of Defense in the Pentagon and until June 2018, was the Senior Fellow and Director of the Transatlantic Security Program at the Center for a New American Security (CNAS). She has also held various leadership positions at leading international think tanks. She is currently a Weizsäcker Fellow at Bosch Academy in Berlin.

Prior to joining the Obama administration, Ms. Smith served as the director of the CSIS Europe Program and the Initiative for a Renewed Transatlantic Partnership, where she led the Center’s research and program activities on U.S.-European political, security, and economic relations. 

Education
She received her BA from Xavier University and her MA from American University.