Staff Writer (Updated: 5/5/2016):
Almost as soon as the M60 established a foothold in the US Army inventory in the early-to-mid 1960s, the US Army began looking at prospects for a "next generation" MBT, joining forces with the like-minded West Germans in developing such a new vehicle to meet the future demands of each respective army. It was expected that the new endeavor would produce a viable end-product in 1970. The resulting joint program, therefore, became the "MBT70" - a fiscally sound, technologically-advanced combat tank with excellent performance, mobility, protection and firepower.
As the program proved highly ambitious from the beginning, the endeavor was quickly fractured. There were already early disagreements on the selection of a main gun. The Americans favored the British L7 105mm system as used on the M60 Patton while the West Germans were eager to field a new Rheimetall L44 120mm gun to counter the expected Soviet 125mm guns. A consensus was then reached on an unproven but powerful 152mm main gun system that could also fire a short-ranged anti-tank missile (as in the M551 Sheridan tank). Program costs then ballooned, largely owed to the high degree of untested technology being applied to the new design. This prompted the Germans to leave the program in 1969 while also drawing the ire of the American congress who were already dealing with a costly war in Vietnam. With the Germans gone, the Americans attempted to go at it alone though, after a financial review of the program, the MBT70 was officially cancelled outright by the overseeing US Department of Defense, this occurring in January of 1970. In response, the US Army attempted to sell congress on a simplified version - the MBT70AV "Austere Version" - but this initiative lasted all but one year until its own cancellation in December of 1971.
The US Army then went to work on a "lower-risk" program which eventually became the excellent "M1 Abrams" Main Battle Tank. At the same time, West Germany was already at work on a new indigenous design all their own to improve upon the aging Leopard 1 series. Design of this new tank was charged to Krauss-Maffei of West Germany - designers and builders of the original "Leopard 1". The project grew from the "Kampfpanzer 2" to the "Keiler" ("Wild Boar") and, finally, to the rather unimaginative name of "Leopard 2" assigned in 1971.
Military analysts and engineers were not blind to events of the world. The Yom Kippur War was closely being watch as war raged between Israel and her Arab neighbors. Prior to the conflict, many predicted the extinction of the Main Battle Tank as a primary battlefield component but this Middle East conflict proved just the opposite while new battlefield dangers emerged such as guided-missile threats. As such, Krauss-Maffei modified their prototypes with the experience garnered in Yom Kippur War and the end-result became a formidable 55-ton vehicle with improved armor protection. Prototypes were constructed featuring both the British L7 105mm main gun (as in the Leopard 1) and the new German Rheinmetall 120mm main gun and these were completed between 1972 and 1974.
With the Americans still in need for an MBT to compliment their outmoded M60s, there continued an internal effort to formulate an indigenous solution leading to the XM1 prototype. However, during its development, there was "forced" consideration given to the Leopard 2 dating back to an agreement signed between West Germany and the United States in December of 1974 in which the countries would jointly manufacture a new combat tank. For the time, this would have made fiscal and logistical sense, particularly in the realm of the NATO inventory where ammunition, parts and training could all be shared. However, it was almost a moot point from the beginning for a foreign-designed and developed main battle tank would never realistically stock the inventory of the US Army.
Regardless, the US Army acquiesced and West Germany delivered a modified Leopard 2 fitting the L7 105mm main gun - the same gun as selected for the XM1 prototype. This tank was further known as the Leopard 2 "Austere Version" (AV). Despite a favorable (and sometimes superior) showing in tests when facing off with the XM1, the Americans still naturally favored their homegrown design citing its lower operating weight and less expensive long-term operating costs. In fact, the XM1 was already slated for serial production as the finalized M1 even before the US Army was forced to test the modified Leopard 2 tank. As such, the Germans formally withdrew hope of their Leopard 2s from ever stocking the US Army inventory in January of 1977 and the XM1 eventually became the M1 Abrams of 1980.The US Army did agree, however, that cross-utilization of components should be used where possible in their new tank.
Back in September of 1977, satisfied with the prototype development and subsequent evaluations, the West German Army ordered their first serial production batch of Leopard 2 tanks to number 1,800 examples over five batches. The first vehicles began deliveries to West German units in 1979 and several other interested European parties soon joined in its purchase - this to include the Netherlands and Switzerland. The Dutch Army became the first foreign customer of the excellent Leopard 2 and placed an order of 445-strong in 1979. This was followed by the Swiss with an order for 380, 345 of these to be locally-produced under license and the rest coming from West Germany. The Dutch order was fulfilled in its entirety by the end of 1986.
Tight Cold War budgets initially placed procurement of the Leopard 2 out of reach of most interested parties but the arrival of new upgraded variants led to many "second hand units" becoming available. Many, therefore, came straight from West German Army and Royal Netherlands Army stocks. At its peak usage, the Royal Netherlands Army themselves managed some 445 Leopard 2 tanks before budget constraints forced their sell-off. To this end, the tank ended up seeing operational service with Austria, Canada, Chile, Finland, Greece, Norway, Poland, Portugal, Singapore, Spain, Sweden and Turkey during its still-going operational tenure. Possible future operators (as of this writing - 2012) may one day include both Indonesia and Saudi Arabia.