The German cabinet approved a strategy paper on Wednesday that called for greater cooperation between its defence industry and European peers, as the region adjusts to shrinking defence budgets and growing security threats.

The government also decided to tighten the rules on exporting military equipment by forcing manufacturers of surveillance hardware to get government approval before being able to sell their products abroad.

In a 10-point programme, the government said the defence industry in the European Union remained "nationally orientated and heavily fragmented" and is facing rising international competition.

"The government is increasingly focusing on European cooperation to the point of integration of companies located in individual member states with due regard to national interests," the paper said.

Efforts by European Union policymakers and industrialists to forge a single European defence market have often been obstructed by individual EU governments which jealously protect their national defence industries and jobs.

The German government said sensor- and cryptotechnology, weapons systems and special protection technology were considered key to the sector and should merit further investment as well as closer cooperation.

The cabinet's approval of the paper came against a backdrop of a European industry which is bogged down with overcapacity and the competing production of tanks and fighter jets.

The cabinet also on Wednesday approved a proposal from Economy Minister Sigmar Gabriel to introduce controls in nations that receive German arms exports to prevent weapons made in Germany from being resold to third party countries which are at war or are viewed as unstable.

Responding to criticism of arms sales to unstable regions such as the Middle East, Gabriel has taken a cautious approach to approving exports since his centre-left Social Democrats joined Merkel's conservatives in a coalition government.

A German government report showed last month that the value of licences to sell defence items abroad fell by a third to 3.97 billion euros ($4.38 billion) last year.

However, exports of more narrowly defined "weapons of war" -- including missiles, helicopters and tanks -- nearly doubled to 1.8 billion euros in 2014.

From 2010 to 2014, Germany was the world's fourth largest arms exporter after the United States, Russia and China, according to the Stockholm International Peace Research Institute (SIPRI). ($1 = 0.9057 euros)

 

reuters.com

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