From German Foreign Policy,
LONDON german-foreign-policy.com spoke with Andrew Feinstein about the role of German arms manufacturers in the international arms trade, about the new wave of militarisation in Europe and about German arms exports to Israel. A former Member of Parliament for the African National Congress (ANC) in South Africa, Feinstein is Executive Director of Shadow World Investigations, a non-profit organisation which undertakes investigations into grand corruption, corporate malfeasance and militarism with a special focus on the global arms trade. Feinstein has authored or edited books like “The Shadow World: Inside the Global Arms Trade” (London 2011), “Indefensible: The Seven Myths That Sustain the Global Arms Trade” (London 2017) and “Monstrous Anger of the Guns. How the Global Arms Trade is Ruining the World and What We Can Do About It” (together with Rhona Michie and Paul Rogers, London 2024).
german-foreign-policy.com: The German arms industry doesn’t have those huge and internationally very well known arms companies like Lockheed Martin, BAE Systems or Dassault. Nevertheless, Germany has been one of the top five arms exporters worldwide for many years. How would you describe the global importance of the German arms industry?
Andrew Feinstein: The German arms industry is important for two primary reasons. The first is that some companies are significant producers. Rheinmetall, ThyssenKrupp – they are big players in the global arms trade. There is no doubt about that. The second reason is obviously Germany’s role in Europe. Germany is such a dominant force in the EU that its approach to the military, to the arms trade, to defence spending is extremely important for the EU as a whole and for the position the EU is going to take.
In addition to this it is important to understand the way in which the arms trade has evolved after the Second World War. Obviously, the United States has been the biggest producer in the world. The US has what we call an economies of scale advantage over European companies because any American company, Lockheed Martin or others, know that the Pentagon is going to buy the vast majority of whatever they produce. So, their foreign sales are incidental and over and above what is the biggest purchaser of weaponry on the planet: the Pentagon. Whereas through the 1950s, 60s, 70s, even the early 80s to an extent, the Americans would be corrupt in the arms trade, that stopped with the Foreign Corrupt Practices Act. Trump now has done away with it; it will certainly be interesting to see what impact that has.
gfp.com: European arms manufacturers are in a different position…
Feinstein: Indeed. Because the Europeans have not had the same quality of equipment as the Americans and because they have not had the economies of scale advantages the Americans had, European manufacturers have been prone to bribery and corruption. The German arms industry is really indicative of that. Even in my own country, South Africa, German companies were involved in a hugely corrupt deal. That was the point at which our young democracy was corrupted. German manufacturers have for a variety of reasons been key suppliers for Israel. Arms deals with Israel don’t happen without corruption. Saudi Arabia, another huge customer which demands massive bribes on arms transactions, is a big customer of Rheinmetall. Rheinmetall has even gone a step further than most other companies in that they have been helping the Saudis and in particular SAMI, the Saudi Arabian Military Industries, to build factories so that they can produce arms themselves. This means that Germany has effectively been helping countries like Saudi Arabia which has been involved in the war in Yemen for many years to bypass any sort of export control regulations. This has made the trade of weapons more and more lawless.
gfp.com: If you look at the arms build-up the EU is currently planning, or if you look at the fact that Germany wants to transform the Bundeswehr into the strongest conventional armed forces in Europe – what does that mean for the German arms industry?
Feinstein: It’s a huge boon for the German arms industry. The whole thing of militarisation – let’s start at the beginning. Me and my colleagues have published a book with the title “Indefensible”. If you read it you will see: 1. Higher defence spending doesn’t make us safer. In fact, it can have exactly the opposite impact. 2. Higher defence spending is a drag on our economies – not only on growth but also on job creation because it’s such an incredibly expensive way to create relatively few jobs. So, the impact of this rearmament or militarisation is going to be negative economically.
In terms of our national security and defence the current militarisation is not going to make much difference as well. Why do I say that? Well, let’s look at just one example, the F-35 jet, the most expensive weapons system ever built. The American tax payer has spent over three trillion dollars on producing this ridiculous plane. According to aerospace design engineers, according to the Inspector General of the Department of Defence in the US, it’s a bad plane. So, we’re spending billions and billions of our new defence expenditure on equipment like the F-35 which is actually making us less safe because the equipment is so bad. I think that this whole militarisation is happening because our Western governments have no idea how to grow our economies anymore. Our economies are in terminal decline. I would argue that is because neoliberal capitalism is based on false assumptions and now useless. What Western governments are now trying to grow our economies is effectively Military Keynesianism....
....MUCH MORE
Related:
June 18 - As Russia Continues Its Advance Toward Berlin...
July 6 - Germany To Buy 1000 Main Battle Tanks, Russia Targets 3000 Per Year Production
As noted in the intro to March 5's "As Germany Positions To Be The World's Liquidity Pump...."
"The world's" may be a bit of hyperbole but combined with what China will have to do to achieve the 5% growth figure that was reaffirmed yesterday, we are looking at potentially maybe $2 trillion in deficit spending over the next six years between the two economies and though not enough to offset the shrinkage of the U.S. deficit—which shrinkage must happen to delay slow-motion but inevitable worldwide disaster—it looks like the global party could continue until sunrise and/or 2030.
The fact much of the German deficit spending will go toward armaments is all the better—it is the most inflationary bang-for-the-buck, so to speak, spending a government can do; you make stuff, you blow it up, you make more stuff. It may not add to a country's real national wealth but boy-oh-boy does it boost nominal GDP growth.
This is a really big deal. If you don't believe me, believe the German bond market....
The only thing that has changed over the ensuing four months it the U.S. passed and enacted the budget bill which was transformed from a putative traditional deficit reduction attempt to a "grow our way out of disaster" attempt. Bringing to mind the thoughts of former Gazprom head and former Prime Minister of Russia, Viktor Chernomyrdin:
On Russia's unstable party system:
"Whatever party we establish, it always turns out to be the Soviet Communist Party."
and on economic reform:
"We meant to do better, but it came out as always"
If interested see also May 18's:
"Rearmament: The Charade and the Game of Chicken"
July 6 - Defense stock surge triggers one of the hottest ETF launches in European history
July 18 - "Can the Developed World Grow Its Way Out of Stagnation?"
July 26 - "Spy cockroaches and AI robots: Germany plots the future of warfare"
