$1 Billion Drone Deal Between Israel and Germany Back on Track

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An Israeli-made Haron drone on a runway in the Palmachim airbase.
An Israeli-made Haron drone on a runway in the Palmachim airbase.Credit: IDF Spokesperson's Unit

A giant 1 billion euro ($1.23 billion) contract by Germany to lease drones from Israel Aerospace Industries is expected to get back on track after a domestic German political dispute that threatened to block the deal was resolved, Defense News reported over the weekend.

A debate about the drone deal is expected to resume where it left off last summer when the Social Democratic Party, then in the opposition, blocked what had been considered to be a bipartisan deal, contending that Germany should not be deploying armed drones used for targeted killings.

But after the German election the SPD joined the coalition headed by Chancellor Angela Merkel. One of the clauses in the coalition agreement calls for the drone contract to be approved. Moreover, German soldiers are now stationed in several global hotspots. Leaving troops without unmanned-strike capabilities could expose them combat dangers.

As a result, said Defense News, German Defense Minister Ursula von der Leyen is expected to make a budget request to the Bundestag to vote on purchasing unarmed Heron-TP drones for intelligence missions, with a decision on whether to arm them to be made later.

State-owned IAI and America’s General Atomics are the only two makers of large-scale combat drones and IAI won competitive bidding in December 2016 for the German contract, followed by negotiations over terms.

For IAI, which posted a $121 million operating profit last year after losing $105 million in 2016, the contract with Germany will be an important revenue stream for the coming years.

German Defense Ministry officials have said the delay had caused the cost of the contract to climb to 720 million euros in addition to 177 million for a support agreement with the government of Israel, according to Defense News.

It added that the drones would be stationed in Israel and managed by the European company Airbus.

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