Ongoing tensions between Germany and Turkey have stalled several defense projects, the CEO of a German defense company said on Monday.
Rheinmetall CEO Armin Papperger told German news agency DPA that his company is still waiting for a final decision from both Turkish and German governments regarding several projects. The planned projects include providing ammunition for fighter jets and modernization of Leopard tanks in Turkey that would better protect them against anti-tank missiles.
Germany is Turkey’s chief ally in the E.U., but ties between the two nations have significantly deteriorated since the beginning of this year. Berlin has launched several measures against Turkey such as trade restrictions in response to Turkey’s arrest of several dozen German citizens, including journalists and human rights defenders.
Germany has also been critical of Turkey’s crackdown on opponents since the failed military coup attempt last year.
“If relations with Turkey don’t improve it will be difficult to obtain a permission from Germany. The German and Turkish governments would have to come much closer together again,” Papperger said.
Last year, Rheinmetall founded a joint venture called RBSS with Turkish truck and bus manufacturer BMC. It is currently seeking a lucrative defense project that includes production of 100 or 200 Altay-style battle tanks. The project is in estimated value of over $8 billion and plans to produce up to 1,000 battle tanks. Rheinmetall holds 40 percent minority stake.
Even if RBSS wins the project, the German government will need to give clearance for this deal as well.
According to German federal laws, Berlin has strick arms export regulations to countries with poor human rights record. In May, protesters held a picket outside a building where Rheinmetall was holding its annual conference, demanding the German defense company suspend arms exports to Turkey.
Papperger said his company has no plans to build its own tank factory in Turkey, primarily because Ankara would only accept joint ventures for domestic production. The transfer of know-how to Turkey also requires a permission from Berlin.
Papperger said Rheinmetall is currently in touch with the Turkish government despite increasing tensions. He added that Turkey is still a NATO partner and the “shield of the alliance in the east.”
