Germany: No agreement yet on A400M financing

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Airbus Military A400M customer nations have not yet agreed on financing for the project, German Defence Minister Karl-Theodor Zu Guttenberg said in Istanbul this morning, as delays and cost overruns threaten to scupper it.

His remarks come after France’s defence minister told reporters late on Thursday that France, Germany and Spain were ready to offer loans to help defuse a funding crisis, but only if Airbus owner EADS digs deeper into its own pockets.

Airbus and EADS are holding talks with seven NATO nations to prevent the 20 billion euro ($27.5 million) A400M project from collapsing after technical problems pushed Europe’s biggest defence project 11 billion euros over budget and delayed expected first deliveries by four years to 2013.

Britain, France, Germany, Spain, Belgium, Luxembourg and Turkey ordered 180 of the Airbus A400M military transport planes in 2003 to support global operations.
“We have agreed on a very strong text that reflects our readiness to reach a common objective,” Guttenberg said on the sidelines of a meeting of NATO defence ministers in Istanbul. “We have not agreed on any number in any form and not on how it’s divided,” he said. Germany ordered 60 of the troop planes in 2003.

France’s Defence Minister Herve Morin told reporters on Thursday EADS founder nations had offered loans that would be drawn from a proposed package totalling 1 billion to 1.5 billion euros to narrow the cost gap. EADS has asked buyers to share the losses to prevent damage to Europe’s airliner business and safeguard 10 000 A400M jobs.

The Paris-based company has offered to cover 3.2 billion euros of the losses and wants customer nations’ governments to pay the remaining 4.4 billion in a proposal rejected by governments last week. The nations instead offered 2 billion. Airbus last month threatened to shut down the programme if there was no deal.



France placed an order for 50 planes, Spain has ordered 27, Britain 25, Turkey 10, Belgium seven and Luxembourg one. Malaysia has also ordered four, while South Africa last year cancelled n order for eight.