Germany's Airbus A400M buy in danger

Germany’s plans to buy Airbus Industrie’s Airbus A400M military plane were in danger yesterday, as State defence secretary Brigitte Schulte confirmed the government’s intention to honour a damages clause to the
European partners in the Airbus project if it does not buy all the 73 planes it has ordered.
When the German parliament’s budget committee reached a compromise last month which paved the way to approve the first tranche of financing for the plane, that clause had been removed.
Committee deputies said defence minister Rudolf Scharping had done a U-turn by agreeing to the clause in a March 26 letter to French Defence Minister Alain Richard.
Germany’s partners had fixed a March 31 deadline for firm financial
commitments to the project, extending by three months a Jan 31 deadline to give Berlin more time to sort out financing for its estimated 9.5 bln eur order.
Participation by Germany is considered critical because its order represents the bulk of the 196 orders made to launch the project.
But the second tranche of financing, of 4.4 bln eur, depends on approval in the 2003 budget, which will be set after September general elections.