BERLIN/PARIS, Nov 18 (Reuters) – France, Germany and Spain have reached an agreement on the start of the next phase of the development of a new fighter jet called FCAS, Europe’s largest defense project at an estimated cost of more than 100 billion euros ($ 103.4 billion ), the German government said on Friday.
The Ministry of Defense said in a statement that an industrial agreement had been reached after intensive negotiations, confirming an earlier Reuters story that the three countries and their respective industries had struck a deal.
The ministry said it was agreed at the highest level of government that a cooperative approach on an equal basis would be followed in the project, which is under the overall responsibility of France.
Spain’s Defense Ministry said Madrid would spend 2.5 billion euros ($2.58 billion) on the project, and 525 million euros ($542 million) would be paid in 2023. The ministry said the cabinet had agreed to the spending this but did not give other details.
“The political agreement on FCAS is a great step and – especially in these times – an important sign of the excellent cooperation between France and Germany and Spain,” said German Defense Minister Christine Lambrecht.
“It strengthens Europe’s military capabilities and secures important information not only for our industry, but also for the European industry.”
Previously, sources had said that the next development phase for the Future Combat Air System (FCAS) was expected to cost around 3.5 billion euros, to be shared equally by the three countries.
France’s Dassault ( AM.PA ), Airbus ( AIR.PA ) and Indra ( IDR.MC ) — the latter two representing Germany and Spain, respectively — are part of the plan to begin replacing France’s Rafale and Euro German and Spanish fighters from 2040.
“Now, a number of formal steps have to be taken in the various countries in order to allow a quick contract signature that we will have to stick to,” Airbus said in emailed comments.
French President Emmanuel Macron and then German Chancellor Angela Merkel first announced plans in July 2017 for FCAS, which will include a fighter jet and a range of associated weapons, including drones.
Recently, the project – which was originally supposed to unite Europeans after the migration crisis and Britain’s decision to leave the European Union – has been the subject of tension between the two countries.
Last month, Macron canceled a joint ministerial meeting between France and Germany over disagreements with Berlin on a wide range of issues including defense and energy projects.
The two sides had been struggling for more than a year to agree on the next stage of FCAS development, although the French and German governments were in broad agreement on the project.
Some sources saw the blame lying with Dassault, as the company had refused to budge in a long-running dispute over intellectual property rights.
Other sources blamed Airbus for pushing for a larger work share of the Dassault-led project, insisting it should be given an “equal footing” with the French company.
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Written by Sabine Siebold; Edited by Kirsti Knolle, Christoph Steitz, Louise Heavens and Emelia Sithole-Matarise
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