Balance for 2020 Decline among Germans Arms exports

Status: 16.06.2021 2 p.m.

The federal government approved fewer exports of German armaments last year than in the previous year. For controversial exports to Egypt, however, millions again flowed. German companies that sell armaments abroad need a permit. These are summarized in the annual arms export report, which was the subject of the Federal Cabinet meeting today. Accordingly, significantly less armaments were sold abroad in the corona crisis year 2020 than in the previous year. 2019 was still a record year for the German arms industry: the German government had approved exports of weapons, submarines and tanks worth around eight billion euros. In comparison, the total was significantly lower last year at around 5.8 billion. Of course, the sum also fluctuates because in some years major projects are approved, in others not. Around half of the arms exports approved last year are intended for EU or NATO countries, or for countries that are on an equal footing with them, such as Japan, Switzerland or Australia.

June 16, 2021

Sale to Egypt under fire

More than half of the export licenses went to so-called third countries. Armaments from Germany should actually only go to these states in exceptional cases. Expressed as a sum, the export of goods worth almost three billion euros to such third countries was approved in the past. These include in particular Egypt, which ordered submarines and patrol ships from German shipyards worth around 764 million euros – according to the report by the Federal Ministry of Economics, the highest approved value among exports to third countries last year. Exports to Egypt are criticized by the churches, among others, because of allegations of human rights violations.

07/01/2021

In some war and crisis regions no weapons are delivered, for example Ukraine. The federal government recently had the advance of the Greens leader Robert Habeck refused for the delivery of defensive weapons. Arms control does not distinguish between offensive and defensive weapons.

Decline in exports, growth in imports

According to the Swedish peace research institute SIPRI, Germany is one of the five largest arms exporters in the world. While the sale of German armaments abroad declined in the past year, the Federal Republic increased the import of military equipment by more than five percent in 2020 . Last year, according to SIPRI, Germany invested around 44 billion euros in armaments, making it seventh worldwide. With information from Hans-Joachim Vieweger, ARD capital studio

More exports in April Exports almost up again Pre-crisis level

Status: 09.06.2021 11:00 a.m.

Thanks to strong demand from Europe and the USA, German companies exported more for the twelfth month in a row in April. Above all, cars “made in Germany” were in demand. The German export economy continues to grow – albeit not quite as strongly as it was recently. In April it achieved an increase of 0.3 percent compared to March. In total, the companies exported goods worth almost 112 billion euros. This was announced by the Federal Statistical Office. It was the twelfth consecutive month of growth in German exports.

48 percent more exported than in April 2020

Compared to the same month last year, the increase was almost 48 percent. However, this plus must be seen against the background that in April 2020 the German economy was fully in corona lockdown. The strongest growth in exports to Great Britain was in April of the current year. 64 percent more goods were sold there – compared to the same month last year. Exports to the EU countries rose by almost 59 percent and to the USA by around 60 percent. 16 percent more goods were exported to China.

German cars pull the most

German cars were the best exports. Car exports rose by 280 percent. However, this was related to the fact that car production had been shut down sharply due to Corona in April 2020. Exports of German electronic goods rose by 36 percent. In the meantime, exports are only 0.5 percent below the level of February 2020. That was the last month before the effects of the Corona crisis became noticeable in Germany and before the restrictions on the economy began.

Delivery bottlenecks and shortages of raw materials easily dealt with

Economists are impressed by Germany’s export strength. Although material shortages and the lack of intermediate products weigh on industrial production, “but at least the industry succeeds in exporting goods,” said VP Bank’s chief economist, Thomas Gitzel. In April, the German industry had produced less than in the previous month due to delivery bottlenecks and scarce raw materials. In May there could be a setback for the German export economy. The export expectations of the industry surveyed by the Ifo Institute fell from 23.9 points in April to 23.0 points.

Optimism for the rest of the year

Despite small skid marks, German exporters are confident for 2021. The German Chamber of Commerce and Industry (DIHK) recently raised its export forecast to plus eight percent. Previously, growth of only six percent was expected.

The federal government approved fewer arms exports in the first three months of this year than in the same period last year. According to a response from the Federal Ministry of Economics to a request from left-wing politician Sevim Dagdelen, deliveries worth 978 million euros were approved in the first three months of this year, 16 percent less than in the first quarter of 2020. Deliveries to so-called third countries that do not belong to the EU or NATO or are equivalent to these countries, such as Australia, fell even more sharply. Their value fell by 43 percent from 615 to 353 million euros. The Gulf emirate of Qatar, which has been heavily criticized for human rights violations, continues to be well ahead among the recipients of war weapons such as tanks, guns or fighter planes. With permits worth 31.4 million euros, it was even the most important export country for German armaments in the first quarter, ahead of Brazil (16.1 million euros) and Belgium (10.7 million euros). In terms of other armaments, the USA (268 million) are ahead of Great Britain (78.1 million euros) and Ecuador (71.6 million euros).

Sharp decline as early as 2020

If the trend of declining permits continues until the end of the year, it would build on the figures from last year. The Federal Government does not provide any information about ongoing approval procedures, including possible decisions. According to the preliminary figures presented by the German government in January, licenses for the export of armaments worth 5.82 billion euros were granted last year. In the previous year 2019 the value was still 8.02 billion euros. Almost half of this was accounted for by deliveries to EU / NATO and NATO-equivalent countries that have a particularly close security partnership with Germany, such as Israel. Last year, NATO member Hungary was by far the largest buyer of German armaments worth 838 million euros.

Ships for Egypt

For third countries, export licenses worth 2.9 billion euros were issued last year. This value is also declining, as it was still 3.5 billion euros in 2019. According to the Federal Ministry of Economics, more than half of the exports concerned “major orders for the maritime sector”. Almost all of these are underwater and surface ships for Egypt worth 760 million euros. This made Egypt the second largest buyer of German armaments last year, ahead of Israel and the United States. The federal government does not usually submit quarterly reports on the licensing of military equipment. Instead, an annual arms export report is presented to the Bundestag before the summer break, followed by a semi-annual report in autumn. German companies that want to export armaments always need a permit for their export.

The export business of Chinese companies experienced a strong boost in March. The increase was 30.6 percent compared to the previous year, as the statistics office in Beijing announced. That is a little less than experts had forecast. By contrast, imports climbed 38.1 percent faster than expected. Overall foreign trade increased by 34.2 percent in March – the ninth consecutive month of growth. For the entire first quarter, this results in an increase in exports of 49 percent. Imports increased by 28 percent. Regarding the growth rates, however, it should be taken into account that the previous year’s level was very low due to the Corona crisis. In addition, the pace of growth is slowing compared to the first two months of the year.

“A positive signal”

Nonetheless, experts are optimistic: “The strong foreign demand is likely to continue in the second quarter as the global economy continues to recover,” said economist Nie Wen of the Hwabao Trust. “But as global vaccination efforts accelerate, industries in other countries will gradually start up again.” The numbers are “a positive signal that global economic and trade activity is recovering and market confidence is growing,” said a spokesman for the customs office, Li Kuiwen. However, he warned that the global economic situation remained complex and serious.

Engine of the world economy

But the world economy is benefiting from the buoyant economic recovery in China. According to the customs authorities, imports from Germany rose by 28.4 percent in the first quarter. China delivered 60.5 percent more goods to Germany. Experts see the demand from the Chinese economy as a major reason for the relative robustness of German industry in recent weeks. Trade with the US is also flourishing. Despite the trade war and punitive tariffs, Chinese exports to the USA rose by as much as 74.7 percent in the first three months of the year. Imports from the USA increased by 69.2 percent. Germany is back in growth The world’s second largest economy after the USA will grow by a strong 7.8 percent this year, according to a forecast by the industrialized nations organization OECD, after being the only large country to grow in 2020 despite the corona crisis. For comparison: The Federal Reserve is forecasting economic growth in the US of 6.5 percent for the current year. Optimism is growing: in December, the Fed had only expected an increase of 4.2 percent. The federal government is currently forecasting an increase of only three percent. A few weeks ago, important economic institutes in Germany revised their forecasts downwards in view of the corona situation. On Monday, the three major industrial associations in Germany expressed their cautious optimism about the economic development. As a result of strong Chinese economic data, oil prices are rising today as China is one of the largest oil importers in the world. The prospects for a global economic recovery could also prove to be a driver for prices on the commodity markets in the future. That, in turn, could cause inflation rates to rise, as experts keep saying.