Airbus concerned about German coalition's tougher stance on arm sales

The head of Airbus's defense unit criticized Germany on Friday for not spending more on defense and said the new coalition agreement's call for a tougher approach to arms exports could prompt the weapons maker to re-examine its business plans.

A coalition deal between German Chancellor Angela Merkel and the centre-left Social Democrats (SPD), which must still be ratified by the SPD, has pledged an immediate ban on arms sales to countries involved in the war in Yemen and a tougher approach to arms sales in general.

"If additional restrictions are imposed, we would have to consider that in our strategic planning," Dirk Hoke, chief executive of Airbus Defense and Space, said in a telephone interview during the annual Munich Security Conference.

"A unilateral restriction on European arms exports by Germany not only hurts domestic industry, but also reduces the room for maneuver of a strategic European security and defense policy," said Hoke, who is German. "Many European partners already do not consider us a reliable partner because our arms export policies change depending on the outcome of our elections," he said.

French defense minister Florence Parly told the same conference that European arms makers needed to export to maintain their ability to meet future European weapons requirements.

"If one day we decided only to produce for ourselves with no ambition to export, then before long we'd have to question whether we were still able to protect our own citizens," she said. "Arms exports have to be done seriously and rigorously, but we shouldn't make it into a kind of specter in what is a very sensitive political debate."

Hoke also joined criticism of Germany for not meeting NATO countries' agreement to spend 2 percent of their annual economic output on defense by 2024.

Germany, Europe's biggest economy, is not expected to reach that target by then.

"The defense budget situation is not helpful and will lead to a decidedly difficult position for Germany in Europe," Hoke said. "With just 1.2 percent of economic output, we are falling short of our responsibilities in Europe."

"If Germany wants to get anywhere near meeting the obligations (to NATO) that were once again reiterated in the coalition agreement, there must be significant increases in the military budget," he said.

U.S. Defense Secretary Jim Mattis this week told European allies to step up efforts to increase military budgets, echoing the tough message he first brought to NATO a year ago when he said allies needed to honor spending pledges or risk less military support from the United States.

NATO Secretary-General Jens Stoltenberg, however, said in Munich on Friday that "all NATO allies have put forward plans to increase spending in real terms."