West Germany Preparing for a Massive Arms Deal with Saudi Arabia

The ruling Social Democratic Party (SPD) and its junior coalition partner, the Free Democratic Party (FDP), have apparently reached an agreement to modify West Germany’s self-imposed restraints on arms sales abroad which could pave the way for a massive arms deal with Saudi Arabia, it was indicated by SPD sources here.

Government spokesman Lothar Ruehl said the Cabinet would make a binding decision on the matter after the parliamentary coalition makes its final recommendations, expected in the next few weeks.

Until now the government has declined to comment on this controversial issue. West German policy has been to refuse to sell arms to countries at war or in areas of tension such as the Middle East. But last week, a joint committee of the SPD and the FDP recommended that some of these restrictions be dropped and that future arms sales be predicated on the “vital foreign and security interests” of West Germany.

Should the recommendation be adopted by the government, it could open the way to possible arms sales to Saudi Arabia, notably West Germany’s powerful Leopard II tanks and other armored vehicles. Chancellor Helmut Schmidt strongly favored such a deal earlier this year but was deterred by opposition in the Bundestag, including members of his own coalition.

Observers here say that Schmidt is likely to wait and see whether the Reagan Administration goes through with its plans to sell the Saudis AWACS reconnaissance aircraft and enhancement equipment for the Saudis’ 62 F-15 fighter-bombers. Only if such a development occurs, would the Chancellor be in a position to proceed with the projected sale of sophisticated German weaponry to the Saudis, observers said.