Government officials to meet on A400M next week

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Officials from countries that have ordered the delayed Airbus A400M military transport plane will meet next week to discuss a financing deal, a spokesman for Germany’s defence ministry says.

The 20 billion euro project, which has been about 25 years in the making, hangs in the balance as some of the seven ordering nations hold out for resolution of a dispute that earlier this week saw Airbus lock horns with Germany.

The A400M, which has been ordered by Germany, France, Britain, Spain, Belgium, Luxembourg and Turkey, has become far more expensive to make than initially anticipated.

Negotiators say Airbus parent EADS has asked the NATO buyers to contribute 5.3 billion euros of additional funds to make the A400M and offered to bear a similar increase in development risks.

The meeting of state secretaries was scheduled for January 14 in London, said the German defence ministry spokesman.

The countries were already disgruntled as the A400M’s maiden flight last month was two years behind schedule following delays in engine development and other snags that the manufacturers blame partly on political interference.

Germany has baulked at EADS’ demands for increased funding, saying it would not contribute more than a further 650 million euros set out in its contract to cover inflation and surcharges.

A spokesman for EADS said on Thursday: “From our perspective, everything has been said on the topic of the A400M. There is nothing more to say.”

The countries aim to reach a financing deal before a standstill agreement expires at the end of January. Airbus chief Thomas Enders last week told a German newspaper that it was time for movement now.

Britain has recently softened its stance toward Airbus in the A400M dispute. It had initially threatened to cancel all or part of its order on the delays, but recently called on Airbus to deliver all planes without any increase in the overall cost.

FT Deutschland earlier yesterday reported that EADS was unlikely to receive the full 5.3 billion euros it had requested, but it cited industry sources as saying that it would be offered enough to make it impossible to refuse a deal.

It said it was almost certain by now that the nations would waive rights to a 1.3 billion euro price cut they were entitled to because of the delays in the delivery of the plane.



Also, Airbus is expected to attempt to make best use of its own political trump cards, since axing the programme could put at risk 40 000 European jobs, with the highest proportion in Germany.