European defense ministers have agreed to inject additional financing into the massive Airbus military transport project. EADS wants a guarantee that participating nations won’t reduce their orders.
Defense officials and aerospace giant EADS are close to finalizing a deal on Europe’s largest joint military project.
Ministers from the seven NATO nations involved – Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey – have offered a total of two billion euros ($2.7 billion) in additional financing for the over-budget Airbus A400M military transport project, and an additional 1.5 billion euros in credit guarantees.
After the meeting in Palma de Mallorca on Thursday, Spanish Defense Minister Carme Chacon said a final agreement will likely be reached “in the next few weeks.” A spokesman for the French defense ministry said in Paris that the signing of the agreement could take place on March 8, once participating countries decide how to divide up the additional costs.
According to French Defense Minister Herve Morin, Belgium, Luxembourg and Spain have confirmed their contributions, but so far only France has stated a specific amount, 400 million euros ($540 million).
The deal would rescue the long-delayed project, first agreed to in 2003. The first A400M aircraft were to have been delivered at the end of last year, but deliveries are now not expected until at least 2013. Cost overruns are estimated to be up to 11 billion euros ($15 billion).
Before securing the deal, the European Aeronautic Defense and Space Company wants to ensure that participating nations do not reduce their orders for the aircraft, originally set at 180.
South Africa canceled its entire order in November due to a sharp increase in the agreed costs, and Britain has already announced it plans to reduce its order from 25 to 22 planes. Most of the planes are to be delivered to Germany.
The new A400M aircraft, built to replace aging military cargo planes, will be able to carry troops, armored vehicles and helicopters and have the ability to land on short, unfinished runways. The project will provide up to 10,000 jobs.