German arms firm: Tension with Turkey may hold up defense projects

Published 30.10.2017 19:53
Updated 30.10.2017 19:54

Tensions between Germany and Turkey are holding up planned defense projects at Rheinmetall, the German arms company's CEO told the dpa news agency in an interview.

Rheinmetall CEO Armin Papperger said in an interview published yesterday that several projects, including the production of ammunition for fighter jets in Turkey and upgrades to Turkey's Leopard tanks, are still awaiting decisions by the two governments.

Relations have been strained between Ankara and Berlin due to a range of issues. Turkey has been criticizing Germany for condoning PKK activities and harboring terrorists who partook in last year's failed coup attempt while Germany criticizes Turkey on issues of press freedom and human rights. Ankara has voiced dismay regarding what officials say is a negative attitude toward it.

The already-strained relations between the two countries sank even deeper during the run-up to Germany's elections. Ankara repeatedly warned Berlin about using anti-Turkey rhetoric in internal policies and said relations should not be sacrificed for the purposes of short-term objectives. "If relations with Turkey do not improve, it will be difficult to obtain clearance from Germany," he said.

Poor relations have also dimmed Rheinmetall's prospects for playing a role in Turkey's Altay tank project, worth an estimated 7 billion euros, dpa said.

The German government also stepped up pressure on banks and international development institutions to cut funding to Turkey, sending the Turkish lira to a new low, Bloomberg reported Wednesday, citing people familiar with the matter. Last week, German Chancellor Angela Merkel asked EU leaders to cut the pre-accession funds to Turkey, pointing to an "utterly unsatisfactory situation in regard to human rights."

In August, German Magazine Stern revealed that Rheinmetall and President Recep Tayyip Erdogan met in 2015 in Istanbul to plan the production of tanks in Turkey. Stern said Rheinmetall's plan, first exposed by a journalistic consortium last March, foresaw a joint venture in Turkey to produce 1,000 tanks.

The intended product was a Turkish-designed tank, the Altay, equipped with German technology, which could be fitted with a bulldozer-like shovel, "practical" for dealing with street protests.

Turkey's BMC, with which Rheinmetall has a joint venture in Turkey, is among the bidders for the first tranche to build around 100 to 200 of a planned 1,000 combat tanks, dpa said.

If BMC wins the contract, Rheinmetall could in theory take part in the development of the tank via the joint venture Rheinmetall BMC Defense Industry Inc. (RBSS), in which the German company holds a 40 percent stake, but it would need an export clearance from the German government.

Papperger said Rheinmetall has no plans to build a tank factory in Turkey.

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