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Sun 27 May 2018 02:42 PM

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Saudi Arabia shutting out German businesses - report

Germany's Der Spiegel reported that the unconfirmed move will have an impact on major firms such as Siemens and Daimler

Saudi Arabia shutting out German businesses - report
Germany's Chancellor Angela Merkel (centre) speaks with Saudi Arabia's Foreign Minister Adel alJubeir R as they arrive to attend a High Level Conference on the Sahel at the European Commission in Brussels on February 23 2018. Image: OLIVIER HOSLET/AFP/Getty Images

Saudi Arabia has ordered a freeze on government contracts being awarded to German companies, according to a new report from Der Spiegel magazine.

According to the popular weekly magazine, the freeze, which is based on Saudi sources, comes after six months of increasingly strained diplomatic relations between Saudi Arabia and Germany which began after the kingdom calls its ambassador in Berlin home for consultations over comments made by then-Foreign Minister Sigmar Gabriel about Saudi Arabia’s role in Lebanon.

“For Germans, the doors in Riyadh have suddenly been closed,” a German businessman was quoted as saying by the magazine.

The magazine also reported that meetings set up before the diplomatic crisis began are being cancelled.

“That hurts,” said Oliver Oehms of the German-Saudi Arabian Liaison Office for Economic Affairs in Riyadh.

The report added that the move is likely to have a significant impact on major companies such as Bayer, Siemens, Daimler and Boehringer Ingelheim.

Siemens, Boehriner and Bayer declined to comment for the magazine report, while Daimler said that its business – which includes an order for 600 Mercedes-Benz Citaro buses made last year - was continuing in Saudi Arabia.

According to German government statistics, the country’s exports to Saudi Arabia were worth $7.7 billion in 2017. Approximately 800 German companies conduct business in Saudi Arabia, of which about 200 have officers in the kingdom.

In March, Bloomberg reported that Saudi government agencies were told not to renew non-essential contracts with German firms.

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