© REUTERS/Gleb Garanich

There’s a lot to be said for having a European policy on arms exports: a joint set of rules could prevent weapons manufactured in Europe from being used in a way that violates international humanitarian law, for example. Arms embargoes can constrain aggressive behavior by depriving a country of military resources, or at the very least send a strong signal condemning human rights abuse. Weapons exports can improve defense cooperation with allies by improving troop interoperability. And, in individual cases, they can improve the defense capabilities of strategic partners in order to help them tackle globally significant security challenges like piracy or terrorism.

All of these measures are more effective when Europeans work together. Weapons embargoes in particular are similar to economic sanctions in that the more countries that participate, the stronger the impact. Hence, an embargo on Saudi Arabia imposed unilaterally by Berlin may help to alleviate the German conscience, but does little to prevent British and French arms from being delivered to Saudi Arabia for use in the war in Yemen.

Despite this, the European Union has thus far failed to enforce a joint weapons export policy.  The goal of a Europe that is “weltpolitikfähig” (loosely translated: capable of geopolitics) and pursues a foreign policy stance based on shared values doesn’t seem to have provided sufficient motivation. Now, however, von der Leyen’s aim of creating a defense union leaves Europe no choice but to tackle the question of exports—the absence of a coherent arms export policy undermines not only the strategic interests and the credibility of a values-based EU, but also its defense capabilities.

European governments will only join forces in the development of military equipment if they are able to trust their partners to provide the necessary components to export customers and to other EU members. In order to achieve this, they need to agree on a transparent and predictable set of export rules.

New Initiatives

Exporting to third countries allows defense companies to enlarge their customer base and create economies of scale. At the same time, it pushes European firms to make more competitive products. By spending money on defense R&D, the EU could help companies be more selective about where to export to in the future and prioritize European technology requirements over those of external customers.

EU member states and institutions have developed a string of new initiatives for the improvement of defense coordination. Among them are the Coordinated Annual Review on Defense (CARD), the European Defense Fund, and the Permanent Structured Cooperation (PESCO).

Ideally, the future of EU defense industrial cooperation will look something like this: EU institutions and governments identify gaps in the bloc’s defense capabilities and draw up a list of the military equipment required; a group of capable countries decides to develop the equipment in question; in return they receive EU funding for the research into and development of necessary technology.

But the EU does not have a plan for how to proceed if member states cannot reach agreement on arms export rules. Without a reliable and consistent arms export policy at the European level, the union’s high-profile plans to improve European defense capabilities risk falling flat.

A European Regime

The European Council adopted a common position on arms export controls in 2008, which defines common rules governing control of exports of military technology and equipment. If it were properly implemented, the Common Position would be one of the strongest arms export frameworks in the world. But although it is legally binding, the Common Position is poorly enforced. There is no formal mechanism to punish non-compliance. Article 346 of the Treaty on the Functioning of the EU affirms that defense decisions taken by member states for the protection of their security interests are outside the remit of EU law. As a result, member states often fall far short of their obligations under the Common Position and fail to apply its criteria to their export decisions. In addition, licenses are only granted under the EU Common Position on a case-by-case basis. Authorities probe whether a particular export violates any of the eight criteria outlined in the Common Position. This methodology often means that the authorities fail to take into account the wider geopolitical context and the cumulative effect weapons exports might have.

A Defense Union

The EU’s plans to build a Defense Union raises the question of whether there could ever be “more EU” in arms export policy. The commission has begun slowly carving out a role for itself in EU defense industrial policy. It recently tightened the regulation of cyber-surveillance equipment, which could bolster its influence over trade in dual-use goods. But the European Defense Fund guidance stipulates that funding from the commission should not have any influence over the export decisions of those military goods that were developed with the support of EU funds—this was the result of rigid opposition by member states to any EU authority over exports.

Civil society organizations have expressed concern that transferring powers to the European Commission, which is less accountable to voters than national governments, could decrease rather than increase transparency around defense exports. And an EU-wide policy would necessarily be based on the smallest common denominator and thus have limited impact.

The European Parliament has so far not been very involved in the EU’s new defense activities. When it first voted on the European Defense Fund in April 2019, 328 MEPs supported it, while 231 voted against. Those who are fundamentally opposed a greater EU role in defense matters aside, lawmakers took issue with the defense industry’s participation in the development of the commission’s proposal and questioned the plan to use EU funds for supporting new technologies (including artificial intelligence, robotics, and unmanned systems) that could pose ethical dilemmas. The parliament may want to have more control in the future over questions such as who will be eligible to import military goods financed by the EU.

Some Proposals

It is unlikely that EU member states will cede national control over their arms exports to the EU. There is no political will to do so, neither in Berlin nor elsewhere. Any attempt to establish an EU supervisory body to report on violations of the Common Position would require a change to the EU treaties and therefore unanimity among EU member states.

But there are a few things Europeans could do right now to improve the workings of the Common Position. A recently concluded review process is promising but limited in scope. For example, member states are obligated to provide an annual report on the export licenses they have granted. The EU should start imposing strict deadlines and standardize the report’s format. The reporting requirements should further include actual deliveries rather than just exporting licenses. This would facilitate a more precise analysis of situations in which the sudden arrival of arms could imperil a fragile ceasefire, for example. For this reason, members should also inform one another of their respective risk assessments. Some countries have difficulties meeting even the current reporting requirements due to a lack of resources and know-how. The EU should organize a peer-review meeting that would allow governments to share best practices for the purpose of data collection.

The EU could also encourage member states to conduct their own controls with regard to the end use of exported weapons. Export licenses should only be granted if the seller is aware of who might end up using the weapons and how they will be deployed. There is no export regime that does not run the risk of weapons falling into the wrong hands. This is particularly true for small arms, which cause the majority of casualties in both domestic and cross-border conflicts. End-use control is expensive, time-consuming, and requires political influence in the recipient country. The EU could contribute by deploying to importing countries teams of experts made up of employees of the Commission and the European External Action Service. This would have to be negotiated in advance and incorporated into export agreements, however, and the EU would have to find a way to handle the difficult exchange of sensitive data.

But in the absence of a credible EU-wide weapons export regime, a positive step toward harmonizing EU arms exports would be for smaller groups of member states to come together, following the model of the Farnborough framework agreement of 2000. In 2019, Germany and France signed the Treaty of Aachen, an extension of the 1963 Elysée Treaty. The two countries promised to “develop a common approach to arms exports with regard to joint projects.” According to the EU truism that nothing happens without consensus between Germany and France, any agreement between Berlin and Paris could be expanded to include other countries, or member states could forge similar agreements with one another. This process could be expanded step by step in order to make the guidelines for weapons exports more predictable for all EU members. But in order to further EU foreign policy goals, these agreements would have to be much farther-reaching than the one proposed by Berlin and Paris, and they would have to encompass legally-binding export rules.

What is more, the agreement recently reached by Paris and Berlin is reminiscent of the Debré-Schmidt accord, which was signed in 1972 by the countries’ then-defense ministers Michel Debré and Helmut Schmidt and stipulated that neither side could block the export of jointly developed weapons systems. Germany nonetheless decided to impose an arms export ban on Saudi Arabia in 2018. This highlights the fact that the problem is not so much a lack of agreements, but rather a lack of a common strategic perspective on regional threats.

What Next?

Before a common weapons export policy can be developed, EU member states must agree on the interests the bloc has in a particular conflict, which is often difficult. Opinions diverge, for example, on whether exporting weapons to Saudi Arabia stabilizes or destabilizes the Gulf region. And arms exports or embargoes must form part of a larger foreign policy strategy, since they are often ineffective on their own in changing state behavior. The most effective embargoes are usually accompanied by other measures such as economic sanctions.

EU member states must take on the enormous task of reaching a shared view on the security context of arms exports. They should also improve the wording of the Common Position and reporting by member states, tighten end-use controls, and conclude far-reaching inter-governmental export agreements. The new incentive: without an effective European arms export policy, the European defense union is unlikely to succeed.

This article is based on the CER Policy Brief “Up in Arms: Warring over Europe’s arms export policy,” co-authored with Beth Oppenheim.

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© REUTERS/Alkis Konstantinidis

For a cash-strapped country like Greece, an additional €66 million in the state coffers should be welcome news. The country’s economy has made only faltering progress, still reeling from the 2008 eurozone debt crisis. Unemployment remains above 20 percent – youth unemployment about 50 percent – and the economy has contracted by a quarter since the crisis began. Pensions have been slashed and Greeks are bracing for more austerity, with new, highly unpopular cost-cutting measures set to continue through 2020 at least.

So Greece’s €66 million deal to sell missiles and munitions to Saudi Arabia was considered a much-needed boost for Athens. However, it has sparked a heated political debate and created yet another headache for Prime Minister Alexis Tsipras’ government.

Defense Minister Panos Kammenos, who inked the deal, is under pressure to resign after revelations that he had allegedly used an illegal intermediary to negotiate the terms of a deal between two governments, breaking Greece’s anti-corruption laws. The Saudi-Greek pact collapsed last week in parliament after the Committee on Military Equipment revoked its original vote allowing the pact to go through. The opposition said it had lost its trust in the defense minister, and would vote against any other arms deal brought to the committee.

Kammenos, who is the leader of the right-wing Independent Greeks party, Tsipras’ junior coalition partner, continues to deny the accusations. He says the middle man in question is an official advisor to the Saudi government. But an anti-corruption prosecutor has opened an investigation into the possible wrongdoing.

Alexis Tsipras was only able to build his frail majority – 153 of 300 seats – with the help of the Independent Greeks, who have nine MPs in parliament. So the left-wing prime minister has been left with little choice but to back Kammenos.

A History of Bribes

Greece is no stranger to multibillion-euro arms deals. It is, after all, one of only five NATO members already spending 2 percent of its GDP on defense. But some of Greece’s biggest bribery scandals have been linked to weapons contracts. Just last month, one of the country’s leading defense ministers in the 1990s was sent to jail for 20 years for receiving bribes tied to big arms deals with Russia and Germany.

Even so, the latest agreement has proven especially controversial. Opposition politicians and critics question the legality and ethics behind selling 300,000 105-millimeter shells to Riyadh as the government their continues its bombing campaign against Iran-backed Houthi rebels in Yemen, trapping more and more civilians in the ceasefire.

According to a United Nations report, the Yemen war has sparked the worst humanitarian crisis since 1945. The organization’s humanitarian affairs office reports more than 10,000 people have died, half of them civilians.

Greece’s attempt to sell arms to Riyadh came despite the European Parliament’s vote to impose a European embargo against Saudi Arabia. The overwhelming majority of the parliament voted to institute an EU-wide ban on selling arms to the Saudis due to “serious allegations of breaches of international humanitarian law by Saudi Arabia in Yemen.” EU member states are not compelled to adhere to the parliament’s vote, but the pressure on Brussels to pass a binding decree is mounting.

Despite strong condemnation of the humanitarian situation in Yemen, Greece is certainly not the only one trying to score big in weapons deals with Riyadh. Since the war began three years ago, British companies have sold 5.2 billion euros in arms to the Saudis, waved through by the UK government. Germany, one of the world’s largest arms exporters, has also come under fire for selling tanks and heavy military machinery to Saudi Arabia, and for sealing a deal earlier this year with the United Arab Emirates, part of the Saudi-led coalition in Yemen.

An Uncomfortable Situation

In Greece, even if the anti-corruption prosecutor finds no evidence of a misdeed, Alexis Tsipras is facing an uncomfortable situation: after participating in dozens of anti-war rallies in the past, he may well have to abandon the moral high ground to the opposition.

It is not the first time Kammenos has put Tsipras in a difficult position. In a bid to cling to power, the prime minister has been forced to back his government ally through several scandals. Last summer, telephone conversations between Kammenos and a convicted drug dealer were leaked. Kammenos did not deny talking to the convict. The opposition accused Kammenos of meddling in the affairs of the justice system, but the minister said he was trying to convince the man to cooperate with the prosecutors.

Still, Tsipras has stood behind his defense minister. But as support for the government continues to slide and the opposition climbs in the polls, the prime minister’s handling of this latest flare-up could be an important factor in deciding his future.

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© REUTERS/Reinhard Krause

“Big Alex,” as he was called, would have been successful anywhere in the world, such was his cunning, his charm, and his ruthlessness. But it took the Cold War and the peculiar and often murky relationship between the two German states to turn Alexander Schalck-Golodkowski into such a memorable figure.

The son of a former Tsarist officer stranded in Berlin, Schalck-Golodkowski apprenticed as a baker and then a mechanic before taking a position with a state-owned foreign trade company in 1952. He soon switched to the Ministry for Foreign Trade, where he quickly rose through the ranks. At the same time, he completed his studies and earned a PhD in economics.

It was in 1966 that Schalck became responsible for the newly founded department for “Commercial Coordination”, or KoKo. Over the next 23 years, the innocently-named KoKo would earn the German Democratic Republic an estimated 25 billion (West German) Deutschmarks. Among its more respectable deals was the sale of a huge plot of land in central Berlin – today’s premium real estate in Potsdamer Platz – for 36 million Deutschmarks to the city of West Berlin.

Koko also sold antiques and paintings, many of which came from private owners in East Germany who were presented with huge tax bills to force them to sell. Museums were also pressured to give up their treasures. In later years, the GDR even did brisk business in the arms trade.

Through Schalck’s companies – about 200 altogether – West Berlin was able to offload rubble and sewage to East Germany. For hefty fees West German pharmaceutical companies could also test new medicines in the GDR. Companies like Ikea took advantage of East Germany’s prison population for cheap labor.

Even more repugnant was the human trade. From the 1960s onwards, the Bonn government paid a total of about 3.5 billion Deutschmarks to get people out of jail and out of East Germany. More than 33,700 political prisoners were released against hard currency payments. In addition, 250,000 East Germans were allowed to leave the GDR.

Meanwhile, Schalck made himself indispensable by providing imported comforts to the East German elite. For the GDR nobility, KoKo procured Volvos and water faucets, soft porn, exotic fruit, and even the occasional jar of caviar. Ordinary citizens – who had to wait an average of 16 years for a domestically-built car and 25 years for a telephone connection – were bought off with oranges at Christmas.

Unsurprisingly, Schalck had also signed on with the Stasi, East Germany’s secret police. Eventually, he reached the rank of colonel, while also serving as Deputy Minister for Foreign Trade and a member of the Communist Party’s Central Committee.

He became an indispensable interlocutor for West German politicians dealing with the Eastern half of the country. His most famous deal was a huge loan that he negotiated with the Bavarian conservative leader Franz Josef Strauß in 1983. Without this loan, Schalck later claimed, the GDR would have become insolvent by the mid-1980s. This would have been bad timing indeed – in 1985, the Soviet Union would still have been far too powerful to allow a bankrupt East Germany to reunify with the West. In 1989-90, it was a very different game.

Yet that is not how his fellow countrymen saw events. For the longest time, nobody beyond East Berlin’s leadership even knew about KoKo. It was only in the autumn of 1989 that the first reports came out about the elite’s petty privileges and the man who supplied them. The anger was enormous.

In December 1989, Schalck actually fled to West Berlin, making him one of the last – and most surprising – of East Germany’s many political refugees. Mostly for his own protection, he was taken in by police for several weeks before being handed over to the Bundesnachrichtendienst (BND), West Germany’s foreign intelligence service.

West Germany’s spies questioned Schalck at length about the KoKo empire, but they also protected him and helped him find a new home on the shores of the Tegernsee, a Bavarian lake much favored by millionaires. There has always been speculation that the BND also shielded Schalck from prosecution. While the West German government denied this, Schalck got off rather lightly from the many judicial enquiries undertaken against him.

Was Schalck a loyal servant to his East German state, as he liked to depict himself? Given his international wheeling and dealing, such an image might give him too much credit. Yet it is probably true that there was an element of patriotism to his actions. Schalck deserves a bit more respect than, say, the leaders of Iran’s Revolutionary Guard who control the smuggling into and out of Iran, or traders in blood diamonds.

Until the dissolution of the GDR, Alexander Schalck-Golodkowsk received an annual salary of about 50,000 East German marks, a nice house, and a weekend retreat comfortably outfitted with “his” imported goods. Of course, his life was enviable by GDR standards, but in comparison to the post-Cold War oligarchs, he only earned peanuts.

“Big Alex” was the product of a different time, a figure well hidden from public view who – albeit through questionable means – smoothed relations between East and West. A man neither side will ever tell the whole truth about.

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