Germany, France, Spain reach general agreement over fighter jet - source

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The logo of French aircraft manufacturer Dassault Aviation is seen on a hangar in Merignac near Bordeaux, France, October 8, 2019. REUTERS/Regis Duvignau

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BERLIN, May 5 (Reuters) - France, Germany and Spain have reached a general agreement on the next steps in developing a joint fighter jet and hope to hammer out all the details by mid-May, a German defence source told Reuters.

The three nations are trying to resolve differences over access to know-how, or intellectual property rights (IPR), after arms firms struck a deal on industrial workshare. Pressure for a quick deal is mounting ahead of a September election in Germany. Disagreements over IPRs meant the countries missed an end-April deadline previously set by Germany and France to broker a deal that would secure the next phase in Europe's biggest defence project, whose total cost is estimated at 100 billion euros ($120 billion).

Participants will put together a list of IPRs by mid-May, spelling out what can be shared by all partners and what must be kept confidential for specific companies, the source said.

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France's Dassault Aviation (AVMD.PA), Airbus (AVMD.PA) and Indra (IDR.MC) - the latter two representing Germany and Spain respectively - are involved in the scheme to start replacing French Rafale and German and Spanish Eurofighters from 2040.

The next step of development is expected to cost 2.5 billion euros ($3.00 billion) in total.

Two other sources said an agreement was close but more discussions were needed, with IPRs the biggest remaining hurdle.

A French government source said therewas no deal yet.

Even if a final agreement is reached by mid-May, Berlin may not have time to secure the approval of Germany's powerful parliamentary budget committee ahead of September's federal election. Approval is needed before funds can be spent.

Typically that process takes several months but the last realistic date at which the budget committee can make a decision is June 24, two sources said.

Although German political parties have starkly different views on defence spending, analysts say the deal is likely to be presented as an anchor for Franco-German ties lying at the heart of European co-operation, which have cross-party German support.

Previously, a source with knowledge of the issue told Reuters the German defence ministry must refer the budget proposal to the finance ministry by May 19.

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Reporting by Sabine Siebold; Editing by Hans Seidenstuecker and Maria Sheahan

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