By Erik Kirschbaum
BERLIN (Reuters) - Peer Steinbrueck, set to challenge Angela Merkel as German leader next year, criticized her centre-right government on Saturday for letting arms exports surge and vowed to end that if his centre-left opposition wins power.
The former finance minister, nominated to lead the Social Democrats (SPD) into September's election against Merkel, said it was a scandal that Germany has become the world's third largest arms exporter on her watch.
Arms exports are a sensitive issue in Germany due to its Nazi past and the role arms makers such as Krupp played in stoking 19th and 20th century wars with exports to both sides.
After World War Two, successive West German and later united German governments placed tight restrictions on arms exports, especially to regions where there were armed conflicts or where human rights were poorly respected.
"It's a scandal and extremely dangerous that Germany has become the world's third largest exporter of weapons," Steinbrueck, who hopes to form a coalition with the Greens party, told the Passauer Neue Presse newspaper on Saturday.
"An SPD-Greens government led by me would change that," said Steinbrueck, 65. "We're even exporting weapons to regions in conflict and to areas where human rights aren't respected."
The SPD and Greens would win a combined 43 percent of the vote, according to an ARD TV opinion poll by the Infratest dimap institute published on Friday. That is more than Merkel's conservatives but not enough to form a majority coalition.
Merkel's conservatives would win 40 percent. Her Free Democrat (FDP) allies would win 4 percent, failing to clear the 5 percent hurdle needed for seats. The Left party would win 7 percent, according to the poll. If so, the SPD-Greens bloc would need 48 percent of votes to secure a parliamentary majority.
As a result, many analysts see a repeat of the 2005-2009 grand coalition of Merkel's conservatives and the SPD as a likely election outcome.
In 2001 Germany was the world's sixth largest arms exporter with $925 million sold abroad, behind the United States, Russia, Britain, France and Italy.
Germany now trails only the United States and Russia after exporting $2.476 billion in 2010, according to latest available data from the Stockholm International Peace Research Institute. Germany ranks ninth in the world on its own defense spending.
Steinbrueck's pre-Christmas attack on Merkel for the increased arms exports is not likely to figure as a major election issue in 2013. But it reflects his fighting spirit on an issue that is important for some leftist voters.
It also aims to deflect criticism from Foreign Minister Guido Westerwelle, an FDP leader who last week blamed the SPD-Greens' government from 1998 to 2005 for the increase in arms exports. He said many recent weapons deliveries to the Middle East were set up under the SPD-Greens government.
Steinbrueck, facing an uphill battle against the popular Merkel, said he was not afraid to criticize her government's foreign policies, adding he would rely on advice from his friend, former Foreign Minister Frank-Walter Steinmeier.
"I've been around in the world quite a bit," Steinbrueck told the newspaper. "At the appropriate time, I'll be making comments on foreign policy on the campaign trail."
The arms issue has made it into the headlines amid a recent report in Der Spiegel magazine that Saudi Arabia wants to buy several hundred armored fighting vehicles from Germany.
Der Spiegel suggested the vehicles could be used in combating possible demonstrations. According to other media reports Germany gave pre-approval for the export of 270 Leopard 2 tanks to Saudi Arabia in 2011. The government has declined to comment.
(Reporting By Erik Kirschbaum, edited by Richard Meares)