Germany, Italy urge funding for missile program

WASHINGTON (Reuters) - German and Italian officials warned U.S. lawmakers on Wednesday that their plans to cut off funding for a ground-based NATO missile defense program built by Lockheed Martin Corp would endanger U.S. ties with their countries.

Italian Defense Minister Giampaolo Di Paola urged U.S. Defense Secretary Leon Panetta to ensure continued funding for the Medium Extended Air and Missile Defense System (MEADS)program given its importance to NATO's future plans and transatlantic cooperation and collaboration.

German legislator Ernst Reinhard Beck said in a series of e letters to U.S. lawmakers that withholding funding for the program "undermines the longstanding and trustful MEADS partnership" and would risk wasting hundreds of millions of euros already invested in the air missile system.

Three congressional committees have scrapped the Obama administration's request for $400 million to complete funding for testing of the new missile defense program, which is jointly financed by the United States, Italy and Germany.

Di Paola urged Panetta to intervene with the fourth committee, the Senate Appropriations Committee, that must still vote on the measure. "We hope and expect that the United States would live up to its (Memorandum of Understanding) commitment," he said in a copy of the letter obtained by Reuters.

Beck said failure by the U.S. Congress to fund the final phase of work on the program would be "perceived by Germany as breaking our transatlantic agreement and memorandum of understanding." It would mark the first time that one of the three partners had terminated a contract and endangered their special relationship, he said.

"The U.S. Congress must be very aware that a pull-out on its final MEADS commitment has broad implications and it will have long-term impacts to other multinational cooperative projects," Beck said in the letters.

The unilateral withdrawal from the joint project would "probably cause significant financial and national security relationship challenge," he wrote.

COULD HARM RELATIONS

The White House has threatened to veto fiscal 2013 defense spending bills over the issue. It has warned lawmakers that failure to fund MEADS would have negative ramifications for U.S. ties to Italy and Germany and "could harm our relationship with our Allies on a much broader basis, including future multinational cooperative projects."

MEADS was intended to replace the U.S. Army's aging Patriot air and missile defense system and has been in development for more than a decade.

Washington announced last year that it would stop funding the program after fiscal year 2013, calling it unaffordable in the current budget climate.

But the Pentagon said it would still fund testing of the program in fiscal 2013 to ensure development of a meaningful capability for Germany and Italy, and to maintain a future option for the United States.

U.S. lawmakers like Senator John McCain, the top Republican on the Senate Armed Services Committee, argue that Washington should not spend any more money on a missile defense system it no longer intends to use.

They say Congress told the Pentagon in the fiscal 2012 defense authorization law to either terminate the program or find a way to complete it for the $390 million appropriated for fiscal 2012.

(Reporting By Andrea Shalal-Esa)