* Berlin has vowed to curb exports to non-allied states
* Germany is world's third largest exporter
* New curbs come at time of reduced EU arms spending
(Adds quotes, background, detail)
By Sabine Siebold
BERLIN, Aug 19 Germany's economy minister told
the country's arms industry on Tuesday that its future lay in
consolidation with European peers, making clear that years of
expansive exports were over.
Sigmar Gabriel's comments come two months after he announced
he would tighten rules on arms exports, curbing sales to states
such as Qatar and Saudi Arabia, whose purchases had previously
helped make Germany the world's third largest arms exporter.
"The German arms industry's perspectives do not depend on
exports alone, and certainly not just on exports to the Arabian
peninsula," Gabriel, a Social Democrat, said after meeting the
heads of workers' councils at German defense industry firms.
"We need to talk about European consolidation, maintenance
and renewal of stocks," he added.
His comments seem at odds with Berlin's stance of just two
years ago, when Germany blocked plans for a $45 billion merger
between Franco-German aerospace group EADS, now known as Airbus
, and British defence contractor BAE Systems
amid fears that Germany might lose influence and jobs.
Germany's arms industry directly employs some 80,000 people.
Exports rose 24 percent to 5.85 billion euros in 2013 from 2012
- triggering a public backlash over sales to volatile regions.
Mindful of shrinking European defence budgets, French and
German tankmakers Nexter and Krauss-Maffei Wegmann said in July
that they were in merger talks. Industry insiders say the move
was accelerated by Gabriel's new export restrictions.
Gabriel said it made no sense to have different European
firms making the same kinds of weapons, or to have different EU
armies all using different equipment.
France has long called for greater European defence
cooperation, but competing national interests and divergent
export policies have often got in the way.
German firms have complained that Gabriel's more restrictive
arms policy has already held up thousands of export permit
applications. They say it risks deterring buyers from choosing
German products and will hurt business.
The minister is due to hold talks with executives and unions
from the entire sector in early September.
Gabriel stressed on Tuesday that questions of job security
would have no bearing on decisions on whether to allow exports,
and repeated that political circumstances in some parts of the
world ruled out arms sales completely.
He said the world was experiencing the opening of a
"Pandora's box" in Iraq, stuffed full of weapons supplied by
both the East and West. "Now we have the dilemma of whether we
should send more weapons in order to save lives," Gabriel said.
Ernst-August Kiel, head of the works council of submarine
maker ThyssenKrupp Marine Systems, welcomed the
meeting with Gabriel and said the arms sector wanted clarity on
policy, particularly as building times are so long.
He said the industry would seek to diversify into civilian
products to ensure greater job security.
One of Chancellor Angela Merkel's main allies in parliament,
Christian Democrat Volker Kauder, suggested last weekend that
Europe should adopt common arms export regulations, to ensure
that Germany was not disadvantaged.
(Reporting by Sabine Siebold; Writing by Madeline Chambers and
Alexandra Hudson; Editing by Noah Barkin and Crispian Balmer)