Airbus Chief Executive Officer Guillaume Faury | Eric Piermont/AFP via Getty Images Airbus CEO lambasts German defense spending ‘The world is at war on trade, at war on cyber,’ the boss of the aerospace giant said.

BERLIN — Germany needs to increase its defense spending and rethink a ban on arms exports to Saudi Arabia to avoid damaging its global reputation, the CEO of aerospace giant Airbus, Guillaume Faury, told POLITICO in an interview.

"Germany needs to ramp up its capacity in defense," said Faury. "Not only in the amount of money it's investing, but also on the role it's taking in the world defense arena."

Late last year, Germany imposed a ban on arms sales to Saudi Arabia following the murder of journalist Jamal Khashoggi. That's a problem, given that some parts for the Eurofighter Typhoon, co-produced by Airbus and other European aerospace companies, are made in Germany. Saudi Arabia has a $13 billion deal to buy 48 of the fighters.

But so far Berlin has refused to bow to pressure from allies to allow arms exports to resume, a policy that puts Airbus defense programs at risk, Faury said, describing the potential damage as "unacceptable."

Guillaume Faury also pointed to the need for a robust continental industry that can respond to growing threats.

The Airbus executive, who took over from Tom Enders at the top of the Toulouse-based company earlier this year, said the policy undermines confidence in Berlin to deliver. "This situation cannot last," he said.

"It's very damaging to the reputation of Germany as well," said Faury. "It's not only about the countries that are impacted by these uncertainties on export licenses, it's also the rest of the world looking at it and seeing Germany as an unreliable partner when it comes to defense goods."

He said it is important for France and Germany to be aligned on export rules.

A German government spokesperson said talks have been held with France on a formal deal on arms exports standards, and that Berlin is "in intensive coordination with regard to arms exports to Saudi Arabia" after the current ban expires on September 30. The government has previously extended the ban.

U.S. President Donald Trump has been a persistent critic of Germany's defense policy, and its failure to meet NATO's 2 percent of GDP spending target. Germany currently spends 1.2 percent of its average GDP on defense, but has pledged to raise the amount in the coming years.

"The world is at war on trade, at war on cyber. It's not a very friendly world," said the Airbus CEO.

Faury warned against "falling in the trap of a given percentage," but said Germany, and Europe, needed to step up against other global heavyweights. "European budgets for defense [are] significantly smaller, maybe three times smaller if not more than the U.S. budget," said Faury, whose company would stand to benefit from an increase in arms sales.

In a wide-ranging interview covering everything from trade policy to the structure of the new European Commission and efforts to address climate change, Faury also pointed to the need for a robust continental industry that can respond to growing threats.

"The world is at war on trade, at war on cyber. It's not a very friendly world," said Faury. "We have to be very cautious to maintain the level of protection of security, of defense, that will allow Europe to put its values first."