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Wednesday, 20 March, 2002, 19:21 GMT
Germany clears military transport for take-off
Airbus A400M mock-up
A400M will be used to deploy Europe's rapid reaction force
Germany has approved the first tranche of funding for its order of 73 Airbus military transport planes.

Defence Minister Rudolf Scharping said a compromise had been found with the eight European partners for the EADS-led consortium to start development.

"The programme can begin," Mr Scharping told reporters after German parliament's budgetary committee voted to release 5.1bn euros ($4.5bn) for the project under the 2002 budget.

Last December, defense ministers from Germany, Britain, France, Spain, Belgium, Portugal, Turkey and Luxembourg signed a contract for 196 A400M aircraft on the condition Germany secured financing for all of its order.

The British Ministry of Defence said the German decision would be reviewed at a meeting of senior officials from all eight countries participating in the project in Paris on Friday.

"We hope that [the German] decision will give the basis for recommending that the contract can be activated," a ministry spokesman said.

Political dogfight

The purchase became caught up in bickering by the opposition and inside Chancellor Gerhard Schroeder's governing coalition ahead of elections on 22 September.

Germany's share is the largest in an order worth 17bn euros ($15.2bn).

The budget committee formally released enough funding for about 40 planes, while 3.5bn euros for the remaining 33 planes will be covered by the 2003 budget.

Germany will not start making payments for its planes until 2008.

Its partners had set a 31 March deadline for Berlin's approval, after numerous earlier deadlines for the project were missed.

The planes, expected to enter service in 2008 or 2009, are a key element of European Union plans to set up its own military force deploy quickly for operations independent of Nato.

 WATCH/LISTEN
 ON THIS STORY
Howard Wheeldon, aerospace analyst, Prudential Bache
"Germany has been the sticking point, but it is not a done deal yet."
See also:

20 Sep 01 | Business
Airbus freezes expansion plans
09 Aug 01 | Business
EADS and Airbus sales rocket
19 Jun 01 | Business
Boeing bows to Airbus
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