BERLIN, July 2 A German government source said
on Wednesday, in reaction to news that French arms maker Nexter
and Germany's Krauss-Maffei Wegmann (KMW) have entered exclusive
talks about a tie-up, that European co-operation in the defence
industry made sense.
Such a merger would create Europe's largest producer of
ground armaments such as tanks, as both struggle to cope with
military budget cuts and reduced defence spending.
The source added that such a merger would not automatically
enable Krauss-Maffei Wegmann to bypass German weapons export
controls, which Economy Minister Sigmar Gabriel intends to apply
more stringently following a sharp rise in exports to Gulf
states and non-allied countries in recent years.
(Reporting by Gernot Heller; Writing by Alexandra Hudson;
Editing by Stephen Brown)