It's been a long time since a German vice-chancellor has defied his chancellor - especially over Germany's booming weapons exports. In Angela Merkel's previous government, the vice chancellor and economy minister was Philipp Rösler of her "preferred" coalition partner, the neo-liberal Free Democratic Party, a party that rarely stood in the way of lucrative business deals.

But on Sunday Germany's mass-circulation Bild am Sonntag newspaper revealed that the new Vice Chancellor Sigmar Gabriel, a Social Democrat, had blocked the sale of up to 800 state-of-the-art Leopard 2 battle tanks to Saudi Arabia.

The deal is not with a German firm but with the Spanish weapons maker Santa Bárbara Sistemas, but since the Leopard tanks were developed in Germany and the contract requires the delivery of German components, the Federal Security Council - a council of key ministers headed by Merkel - had to approve the sale.

Gabriel (left) wants to modify Germany's arms export policy

New scruples? Maybe not

Gabriel's defiance itself did not come as a surprise. There had already been controversy over selling arms to a country suspected of massive human rights violations since it was first announced in 2011 that the Saudis were interested. The fact that tanks make ideal crowd-control weapons, and that Saudi Arabia has sent forces to help suppress demonstrations in neighboring Bahrain did not deter Merkel in the interim, but the Social Democratic Party's (SPD) switch from opposition to government in last year's election has changed matters.

"Gabriel and the SPD expressed their position so clearly against the Leopard tank exports in 2011 and 2012, that they could no longer withdraw themselves from that position," said veteran anti-weapons campaigner Jürgen Grässlin, chairman of the Armaments Information Bureau (RIB). "If they did, they'd face serious criticism from our campaign 'Stop the Weapons Trade' - the accusation: deceiving the voters!"

But Grässlin does not think the German government has suddenly located a conscience. "It's a partial victory at best - though a very important and symbolic one," he told DW. "But Gabriel approved the delivery of 100 patrol boats to the human-rights-violating monarchy in Riyadh (despite Sharia laws and Fatwas). Unbelievable!"

Big business outside NATO

Peace campaigner Grässlin was cautious with his praise

At most, the move represents a small SPD corrective to what has been a boom in arms exports under Merkel. The peak came in 2010, when she approved arms exports worth a record turnover of 2.1 billion euros ($2.9 billion), a tenfold increase on 2000. And statistics show that a larger proportion of those weapons go to countries that are not necessarily allies. The new report from the Stockholm International Peace Research Institute (SIPRI), released on Monday (14.04.2014), shows that there is a good reason why the biggest business is now outside NATO: while western nations slash their military budgets, countries like Saudi Arabia are expanding their arsenals.

This point was made by Michael Fuchs, deputy head of the CDU's parliamentary faction, who was very critical of Gabriel's intervention. "We have to be clear what this means for the German arms industry," he told the Bild am Sonntag. "If the German arms firms can no longer export outside the NATO alliance, there will be no arms industry in Germany anymore. There is a big danger."

Considering that the German arms trade represents less that 0.1 percent of German exports, and fewer than 100,000 jobs, this may not seem like a big loss. But Henrik Heidenkamp, research fellow for the defense industries program at the Royal United Services Institute, says the vital factor is not money: "This is a hugely important point - the commercial importance of the defense industry is relatively small to the German economy," he told DW. "But it is crucial because only a commercially viable defense industry can deliver functioning equipment to the armed forces in order to sustain the national security effort. That's an argument that is rarely made in the German debate - in the UK for example it's the dominating narrative."

In other words, Germany has to be able to sell guns into the world's war-zones so as to have enough guns for its own soldiers - presumably should they ever have to go and fight in them. For Grässlin, the moral cost of this argument is too high: "Germany has to decide between its self-declared ambition to promote peace in the world, represent humanist and Christian values and so protect human rights - or else choose the CDU-preferred thinking of primarily profit-oriented thinking and behavior," he said.

Saudi Arabia has boosted its defense spending

No horse trades over arms trades

Fuchs' other fear is that Gabriel's move is likely to come at a political cost abroad, by damaging relations with Saudi Arabia. Heidenkamp is skeptical of this. "It's clear that a country like Saudi Arabia views its relationships with other countries also through an industrial-defense relationship," he said. "On the other hand they do understand the drivers at work over here."

But Gabriel does seem to be trying to re-shape German arms trade policy, and his intervention illustrates the political dynamics. And yet, this is not mere political horse-trading, but part of an ongoing dialogue between Germany's two main parties. "You find yourself very often in this very uncomfortable situation that you have to balance national security interests - which is also about the commercial viability of the defense industry - and the legitimate considerations of human rights and regional stability," said Heidenkamp. "To be frank I think that's the burden of statesmanship."