Germany approves tank sale to Indonesia - industry source

BERLIN Fri May 3, 2013 9:54am EDT

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BERLIN May 3 (Reuters) - The German government has approved the sale to Indonesia of about 100 used Leopard 2 tanks and 50 armoured personnel carriers but has put off a decision on a tank sale to Saudi Arabia, a defence source said on Friday.

Germany's national security council, which includes Chancellor Angela Merkel and some cabinet ministers, must approve large arms sales and the government never comments on its decisions.

Indonesia, southeast Asia's largest economy, had previously indicated it would buy 130 Leopard tanks from Germany's Rheinmetall AG as part of a $15 billion five-year campaign to modernise its military.

The German source did not say how much the deal was worth but Indonesia said last year the value of the initial agreement to buy 130 tanks was $280 million.

Indonesia, which has economic growth of above 6 percent, is wary of being left behind as China, Vietnam, Thailand and other Asian nations ramp up defence spending. This year it announced plans to buy more than a dozen Russian Sukhoi fighter jets as well as domestically made, missile-equipped patrol ships.

The industry source said Berlin would delay a decision on whether to sell tanks to Saudi Arabia until after the federal election in September. It is a sensitive issue in Germany where the opposition criticises sales to some Middle Eastern countries because of their human rights record. (Reporting by Sabine Siebold; Writing by Gareth Jones; Editing by Stephen Brown and Mark Potter)

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