April 11, 2007 / 11:13 AM / 10 years ago

Austria wants out of EADS deal after suspect payment

3 Min Read

VIENNA, April 11 (Reuters) - Austria wants to cancel the purchase of 18 combat jets from the Eurofighter group after a general overseeing the deal was relieved from his duties over suspicious payments, the defence minister said on Wednesday. The payments, which were unveiled in a parliamentary probe of the controversial 2 billion-euro ($2.7 billion) deal, gave Austria a better hand in talks with the EADS-led EAD.PA EAD.DE group, Defence Minister Norbert Darabos said.

"Of course, the total cancellation (of the deal) is our preferred option," Darabos said in an interview with Austrian newspaper Oesterreich. But he added it was still not clear whether pulling out of the deal was legally possible.

A defence ministry spokesman said talks between ministry and Eurofighter experts over contract amendments continued on Wednesday.

The former conservative government decided in 2002 to buy 18 Eurofighter jets after a public tender. The deal was fiercely criticised by the then opposition, which launched a parliamentary investigation last year.

The Social Democrats, which now lead a government coalition with the conservatives and two smaller parties, say kickbacks or bribes were involved in Eurofighter winning the tender despite making the most expensive offer.

So far they have not presented conclusive evidence to back up the accusations, denied by Eurofighter and the old government.

However, the parliamentary probe unveiled a 87,600 euro payment made by a Eurofighter lobbyist to a company led by the wife of Erich Wolf, a major general who was a member of the defence ministry commission which recommended the Eurofighter purchase.

Wolf, who was relieved from his duties on Tuesday, and his wife Anna Maria Fruehstueck-Wolf confirmed the payment by Erhard Steiniger, a lobbyist Eurofighter had hired to promote their jets in Austria during the tender.

But Fruehstuck-Wolf told local newswire APA the payment was a loan and her husband had nothing to do with it. Eurofighter spokesman Wolfdietrich Hoeveler told Austrian state television on Tuesday Eurofighter did not know about the payment.

The Eurofighter group is owned by EADS, Britain's BAE Systems BA.L and a unit of Italy's Finmeccanica SIFI.MI.

((Reporting by Boris Groendahl, Editing by Matthew Jones, Vienna Newsroom, phone +43 1 531 12-258))

($1=.7451 Euro) Keywords: AUSTRIA EUROFIGHTER/

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