* Drone production deal one of largest in Europe,

Zelenskiy says

* JV will supply thousands of drones to Ukraine, Germany

says

(Recasts with quotes from news conference, details, background)

By Andreas Rinke and Yuliia Dysa

BERLIN, April 14 (Reuters) - Germany and Ukraine agreed

defence cooperation plans on Tuesday including a deal on drone

production that Ukrainian President Volodymyr Zelenskiy said

could become one of the largest of its kind in Europe.

The accords, signed during a visit to Berlin by Zelenskiy

and Defence Minister Mykhailo Fedorov, underline the growing

stature of Ukraine's defence industry after more than four years

of a war marked by rapid innovation in drone technology.

"No defence industry has become more innovative than

Ukraine's," German Chancellor Friedrich Merz told a news

conference in Berlin. "Through our support, we are strengthening

both German and European defence capabilities and our industrial

base."

Germany is Europe's largest provider of military aid to

Kyiv. It has delivered about 55 billion euros ($64 billion)

since Russia's invasion of Ukraine in 2022, and has set aside

11.5 billion euros in the current budget.

Much of the support has been used to fund purchases of U.S.

weapons. On Tuesday, Germany's defence ministry said it would

pay for hundreds of Patriot air defence missiles from U.S.

defence group Raytheon and launchers for IRIS-T air

defence systems from Germany's Diehl Defence.

Zelenskiy said teams from both countries were still working

on the scope and details of the drone agreement, which builds on

existing cooperation between German and Ukrainian companies.

"Germany is a major partner of ours, so I am confident that

we will have one of the largest - indeed the largest -

agreements of this kind at least in Europe," he said.

Germany's defence ministry said the project would create a

joint venture to supply thousands of drones to the Ukrainian

military. Berlin also agreed to invest several hundred million

euros to finance so-called deep strike capabilities.

U.S. efforts to negotiate an end to the war have stalled

since the start of the war with Iran, but Merz said Europe's

involvement in any agreement with Moscow was "indispensable".

He said a meeting of national security advisers was being

organised and that the U.S. would be invited to participate.

(Additional reporting by Ludwig Burger and James Mackenzie in

Berlin and Anna Pruchnicka in Kyiv. Writing by James Mackenzie.

Editing by Mark Potter)