Germany says some military goods should get export permits faster

BERLIN, Sept 5 Fri Sep 5, 2014 7:18am EDT

BERLIN, Sept 5 (Reuters) - German Economy Minister Sigmar Gabriel said on Friday certain military products should be granted export permits more quickly, though he stood by his policy to tighten the rules on arms exports.

Gabriel, who is Chancellor Angela Merkel's deputy, also said applications for export licenses from German defence contractors have soared this year because of the Ukraine crisis, and around 100 requests for Russia-bound goods have been put on hold.

Germany has long tended to avoid involvement in military matters abroad because of its Nazi past, but the government on Sunday decided to send anti-tank rockets, assault rifles and hand grenades to Kurds fighting Islamic State militants in Iraq.

Gabriel, speaking after meeting more than 30 representatives of defence firms, labour unions, works councils and trade groups, said Germany would look into providing swift approvals for dual-use goods - those with both civil and military use.

However, he said these goods would not be permitted to have anything to do with war weapons.

He said the delivery of spare parts could also be sped up.

"The authorisations for such goods don't happen quickly enough," said Gabriel, a Social Democrat.

The office in charge of authorising such exports currently has about 700 applications from defence companies for exports, said Gabriel. That compares with 300-400 normally. The higher number is due to the Ukraine crisis, which has caused around 100 applications for Russian-bound exports to be put on hold.

"But the main point is that the world has totally changed," Gabriel said, referring to the Middle East, where Islamic State insurgents have seized eastern Syria and large areas of northern Iraq, and the West's confrontation with Russia over Ukraine.

"We can't just continue doing as we have done until now."

Gabriel had said earlier this year that Germany would adopt a more cautious approach towards arms exports to security-sensitive areas after a 24 percent surge last year.

He also said on Friday that the government could consider support by state-controlled development bank KfW as some firms suffered liquidity bottlenecks.

Gabriel and Rheinmetall chief executive Armin Papperger agreed the future of German arms was in national consolidation, and the minister also said it was necessary to talk about consolidation at a European level.

Currently Krauss-Maffei Wegmann (KMW) is in merger talks with France's Nexter but there has been speculation that Rheinmetall could join the fray to avert the creation of a strong rival and tap significant synergies.

Germany's arms industry directly employs some 80,000 people. (Reporting by Rene Wagner; Writing by Annika Breidthardt; Editing by Mark Heinrich)