Differences in how each country regulates arms exports, and how it applies these different regulations, has caused major difficulties in the recent past by blocking the export of jointly-produced weapons, or of weapons incorporating components built in the other country.
Ending years of controversy, the two leaders on Wednesday signed a “legally binding agreement” to automatically agree to the export by the other country of jointly-developed weapons, which according to a note by the French presidency “is the condition for the success of joint projects such as the tank and the aircraft of the future.”
Décision fondamentale qui acte une confiance mutuelle : un accord a été conclu aujourd'hui entre France et Allemagne. Il permet l'exportation d'équipements issus de nos coopérations. Étape essentielle pour construire sereinement une Europe de la défense ambitieuse. pic.twitter.com/aWK6YytS7q— Florence Parly (@florence_parly) October 16, 2019
Florence Parly tweeted “A fundamental decision which acts our mutual confidence: an agreement was concluded today between France and Germany. It allows the export of equipment from our cooperation. An essential step to serenely build an ambitious Europe of defense.”
While French reactions are generally optimistic, the reaction in Germany is less so. The deal must be approved by the German Cabinet before it can take effect, and it is not certain that Merkel’s coalition partner, the SPD Social-Democrat party, will agree to liberalize arms exports after having battled for decades to reduce them.
Wir wollen gemeinsam die europäische Verteidigungspolitik stärken. Mit den deutsch-französischen Vereinbarungen von heute gehen wir einen wichtigen Schritt. L'Allemagne et la France travaillent ensemble dans la confiance. pic.twitter.com/hWnFGzy7Q9— A. Kramp-Karrenbauer (@akk) October 16, 2019
Together, we want to strengthen European defense policy. We are taking an important step with today's German-French agreements. Germany and France work together in confidence.
The SPD’s is due to elect a new leader at its Dec. 6-8 congress in Berlin, and this is probably why implementation of the export deal, and award of the demonstrator contracts, is being pushed into next year, once the dust has settled.
The joint French-German communiqué states that “Today, both sides have concluded their negotiations leading to a legally binding agreement whose final steps will be implemented as soon as possible,” but provides no additional details. Implementation would likely only require an addendum to the Treaty of Aachen, signed earlier this year by both countries as an extension of their long-standing bilateral defense cooperation.
However, diplomatic sources told Reuters and dpa news agencies that a 20% threshold of components would require export consent from the country where the component was manufactured. This means that Germany would only have a say in the French export of joint military systems if its contributions were over a certain threshold.
“The Toulouse declaration on arms exports is a step in the right direction. However, many details are still unclear,” Matthias Wachter, Head of Department at the Federation of German Industries (BDI), said in an e-mail. “A pure threshold approach would not be enough, because German workshare in FCAS & MGCS is substantially higher. It would also predetermine a future junior role for Germany in joint projects. We therefore argue to revitalize Schmidt-Debré” agreements.
Named for the German and French defense ministers who signed them in 1971, these agreements, which regulated joint exports for almost 50 years, authorized the export of weapons by one partner even if they included parts or components produced by the other.
Nominally still in force, they were broken by Germany when, by blocking arms exports to Saudi Arabia last year, it also forbade its industry from providing parts and components used in weapons sold to third-party nations like France, the United Kingdom and others. One consequence was that deliveries of Meteor missiles and Typhoon combat aircraft by Britain and France to Saudi were suspended.
Go-ahead for FCAS and MGCS programs?
Agreement on export, if confirmed and enacted, would clear the way for the two countries to launch several weapon development programs which were being held up by a French demand that it be freely allowed to export jointly-developed weapons, on which Germany wanted to retain a right of veto.
However, the agreement on exports does not guarantee that the pending development programs will automatically proceed, as the approval of Germany’s Bundestag is required before any significant funding – in excess of €25 million - can be committed.
This approval has been delayed by the Bundestag’s preoccupation that German manufacturers not be short-changed by the related industrial work-sharing agreements.
On the Future Combat Air System (SCAF), the French and German defense ministers, Florence Parly and Annegret Kramp-Karrenbauer, have agreed to award research & technology contracts on the five pillars of the program as of January 2020, according to French media reports.
SCAF - Nouvelle étape franchie : France et Allemagne sont d'accord pour signer un contrat de démonstrateur d'avion en janvier 2020. Cet avion de combat du futur et les drones qui l’accompagneront entreront dans nos forces à l’horizon 2035/2040. Le 1er démonstrateur volera en 2026— Florence Parly (@florence_parly) October 16, 2019
SCAF - New milestone achieved: France and Germany agree to sign an aircraft demonstrator contract in January 2020. This combat aircraft of the future and the drones that will accompany it will enter our forces by 2035/2040. The 1st demonstrator will fly in 2026.
The main contract, worth either €150 million or €220 million according to media reports, will go to Dassault Aviation and Airbus Defence and Space to fund a technology demonstrator of the future New-Generation Fighter (NGT), which should fly by 2026.
A companion contract, due to be awarded at the same time to France’s Safran and Germany’s MTU Aero for a technology demonstrator for the NGT’s engines, is however being delayed by the Bundestag’s determination that MTU win a work-share equal to that of Safran. The goal is also to award this contract in early 2020, but if this proves impossible Paris and Berlin have agreed to continue the SCAF program without waiting for an agreement for the engine, La Tribune reported.
Similarly, if an agreement on work-sharing can be found to the Bundestag’s satisfaction, the two governments could also award a contract in early 2020 for the overall Main Ground Combat System architecture study.
The three manufacturers involved with this program (Nexter, Krauss-Maffei Wegmann and Rheinmetall) signed a Letter of Intent this week, La Tribune reported Oct. 16 citing sources at the Armed Forces Ministry.