Germany, Italy protest at U.S. axing of missile defence funding

Sat Feb 2, 2013 9:13am EST

* Congress barred final payment for developing system

* U.S., Italy and Germany have spent $4 billion on project

MUNICH Feb 2 (Reuters) - Germany and Italy have told the United States they expect it to fulfil its obligations after the U.S. Congress blocked funding for a missile defence programme involving the three countries, Germany said on Saturday.

A defence bill passed by Congress in December prohibited a final U.S. payment of $400.9 million for development of the Medium Extended Air and Missile Defense System, known as MEADS, which is being developed by Lockheed Martin with partners in Italy and Germany. U.S. lawmakers said Washington has no plans to produce the system.

The United States, Italy and Germany have spent about $4 billion to develop MEADS over the past decade as a successor to the Patriot missile defence system.

"I expect the United States to stick to their word and fulfil the MEADS contract," German Defence Minister Thomas de Maiziere told reporters at the Munich security conference.

He said that, together with the Italian defence minister, he had sent a "pretty tough" letter to U.S. authorities driving this point home.

U.S. Defense Secretary Leon Panetta was doing all he could to ensure the United States fulfilled its commitments, de Maiziere said, although he acknowledged that the chances of the United States fulfilling the agreement had deteriorated.

Congress defied President Barack Obama's administration by axing funding for the programme in a $633 billion bill authorising funding for the U.S. military in fiscal year 2013.

The White House raised concerns about the bill before its approval, warning that a ban on MEADS funding could harm Washington's broader relationship with its allies.

Lockheed, the Pentagon and officials in Italy and Germany hope that congressional appropriators, who control the actual funding for arms programmes, will still allow the Pentagon to fulfil its final funding obligations for the programme.

Otherwise, they argue, the U.S. government may face termination fees nearly equal to the money required to finish the system, and could lose access to the technologies developed under the international programme.

The Lockheed Martin-led consortium continues to work towards a fourth quarter 2013 flight test to prove the MEADS missile defence system can intercept a ballistic missile.

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