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Germany, France may downsize FCAS programme, FT reports

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French and German defence ministers set to hold talks

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Berlin sticks to end-of-year deadline for decision

(Adds no comment from Airbus in paragraph 5, details of the

project and possible options throughout)

By Sabine Siebold

BERLIN, Nov 17 (Reuters) - Germany and France are

discussing downsizing their 100-billion-euro ($116 billion)

flagship defence project by dropping plans to jointly build a

fighter jet and focusing on a command and control system, the

Financial Times reported on Monday.

France's Dassault, Airbus and Indra

- the latter two representing Germany and Spain

respectively - are involved in the Future Combat Air System

(FCAS) to replace France's Rafale and German and Spanish

Eurofighters with a next-generation fighter from 2040.

Airbus and Dassault have each led some parts of the FCAS

programme but disagree over how to build the jet, with

differences over the division of labour, choice of suppliers and

control of the jet's design, the FT said.

Airbus declined comment on the report. Germany's defence

ministry did not immediately respond to a request for comment.

Dropping plans to jointly build a new fighter aircraft could

deal a blow to European Union efforts to increase defence

cooperation following Russia's invasion of Ukrainein 2022.

The German and French defence ministers were expected to

discuss the future of FCAS at talks in Paris on Monday.

German Chancellor Friedrich Merz and French President

Emmanuel Macron aim to decide by year-end whether to proceed

with the project or pursue an alternative approach.

PROJECT PLAGUED BY DELAYS AND INFIGHTING

The FT quoted officials in France and Germany as saying that

dropping plans to build a new fighter jet would enable the

project to focus on developing a combat cloud control system

that would link fighter jets and their pilots to sensors,

radars, drones and land- and sea-based command systems.

Initiated in 2017 as a model for European defence

collaboration, the project has been plagued by delays and

infighting over workshare and intellectual property rights

between France and Germany and their national industries.

Berlin has blamed Dassault for blocking the programme's next

phase by seeking sole leadership of the project. Sources said

France had demanded a workshare of some 80% but Dassault denied

this.

Options under discussion include fully terminating the

project or significantly scaling it down by eliminating

important elements including the development of the joint

fighter jet, according to sources familiar with the matter.

($1 = 0.8621 euros)