Negotiations on Franco-German fighter jet stuck, security sources say

BERLIN (Reuters) - The negotiations on the next steps in the development of a Franco-German fighter jet are still going on, the government in Berlin said on Friday, while security sources described the talks on Europe’s biggest defence project as stuck.

FILE PHOTO: Scale models of the Franco-German-Spanish Future Combat Air System (FCAS / SCAF), Europe's next-generation fighter jet, are seen in Paris, France, February 20, 2020. REUTERS/Charles Platiau/File Photo

The battle over the Future Combat Air System (FCAS) with an estimated cost of more than 100 billion euros ($120.4 billion) has intensified since Spain officially joined the project late last year.

The three countries still disagree over intellectual property rights and workshares, with French company Dassault demanding 50% of the workload, security sources told Reuters on Friday.

The disagreements run so deep, there are considerations by now to build three demonstrators instead of one, further driving up the cost of the project, they said.

The Berlin government refused to give any details on the status of the negotiations after the latest round of talks of the defence ministers of Germany and France on Thursday.

The government was still planning to send the budget proposal for the next tranche of project payments to parliament before general elections in September, a defence ministry spokesman in Berlin said.

On Wednesday, a meeting of defence officials from France, Germany and Spain, as well as Dassault, Airbus and Indra, failed to reach a breakthrough.

German Chancellor Angela Merkel and French President Emmanuel Macron kicked off the ambitious venture in 2017, when the EU was rattled by Britain’s decision to leave the bloc and deeply divided over other issues such as the migrant crisis.

But it has become mired in mistrust and differing visions between Berlin and Paris as well as corporate infighting over workshare, according to insiders.

At the beginning of February, Merkel and Macron failed to settle the issue, leaving open when the next tranche of payments of at least 5 billion euros can be released.

Reporting by Sabine Siebold, Editing by William Maclean and David Evans