Chancellor Helmut Schmidt delayed a decision on the sale of arms to Saudi Arabia today, setting aside for the moment one of the most controversial in a series of issues that have generated unusually sharp criticism from the left wing of his party.
In remarks before the West German parliament, Schmidt appeared inclined toward the deal, which is said to include the purchase by Riyadh of 300 West German Leopard II tanks and perhaps other weapons systems. But he said a decision should be made after the matter is aired in parliamentary debate.
While favoring continued restrictions on the sale of German arms -- now strictly prohibited under 1971 Bonn guidelines banning weapons exports to "areas of tension" -- Schmidt suggested that it may be time to supplement or redefine restrictions in light of new world political realities.
No formal Saudi request for West German arms has been made, Schmidt said, and Saudi officials have indicated that they will wait to submit one until the chances for approval improve.
But it was disclosed earlier this month that Riyadh inquired informally in November about some purchases from West Germany. This brought a protest from some members of Schmidt's Social Democratic Party, already upset by the recent sale of two West German submarines to Chile. They want to keep West Germany's arms trade to a minimum.
It also upset Israel, which in the meantime has hinted that if the Saudis get West German arms, Israel may ask for some, too.
In fact, the West German arms industry is poised for a takeoff, having built itself up from nothing after being dismantled following World War II. According to the Bonn Economics Ministry, West Germany exported $3 billion worth of arms from 1975 to 1979, although it remains the world's sixth-largest arms exporter, far behind the United States, the Soviet Union, France, Britain and Italy.
Dismissing domestic employment as a reason for the sale -- although West Germany is experiencing a recession -- Schmidt stressed the key role Saudi Arabia plays in security of the Persian Gulf, calling it a "primary security factor" in the region. Proponents of the deal point out that it would enable Bonn to contribute to allied efforts to safeguard the gulf while avoiding direct involvement of West German troops. Such direct involvement has been both anathema to the Bonn leadership and forbidden by the West German constitution, which limits military involvement to NATO.
The Bonn Foreign Ministry, which has responsibility for defining what qualified as an "area of tension," is reportedly working on a change in concept that would permit West German arms sales to zones of European security interest.
Perhaps more to the point, though, is Saudi Arabia's importance to West Germany as supplier of 40 percent of imported oil here and a country that last year lent Bonn $2.3 billion to help cover its current accounts deficit. Earlier this month Bonn officials reported that Riyadh had agreed to buy an additional $1.75 billion in West German bonds this year.
Schmidt said the "most outstanding problem" to the sale is the interests of Israel, and he voiced sympathy for Israel's apprehensions. He said intensive diplomatic discussion in the Middle East and NATO alliance could be needed before any sale could go through.
To the new Reagan administration, he expressed appreciation for early statements by Secretary of State Alexander Haig that have stressed consultation with Europen allies.
Schmidt said he saw "no grounds to greet the new American government with certain unfriendly comments such as I have read in parts of the European press."
Still, there were strong hints of the tension likely to come in Bonn-Washington consultations from the reserve Schmidt showed toward statements in Washington this week signaling a toughened U.S. line toward the Soviet Union.
While condemning the Soviet missile buildup in Europe and intervention in Afghanistan, Schmidt made clear that Bonn would use its contacts with Washington to argue for preservation of the West's cooperative ties with the Communist East -- in which West Germany probably has the greatest economic and humanitarian stake.