COLOGNE, Germany — German defense leaders have admitted there is no firm financing plan for the Future Combat Air System, but they still plan to submit the project to lawmakers for approval soon.

At issue are the next phases for the German-Franco-Spanish, next-generation fighter aircraft, dubbed 1B and 2. The decision to proceed marks something of a point of no return given the billions of euros to be pumped into flyable prototypes.

In a May 7 letter to lawmakers, German Defence Ministry leaders sketched out a sporty timeline for presenting a signature-ready deal to parliament, a mandatory step before money can start flowing. The idea is to send the proposal to the relevant Bundestag committees for review in the last week before the summer recess, the week of June 21. The timing is critical because once parliament goes out of session, the following six months, at least, will be consumed by the September national election and the ensuing formation of a new government.

The setup of the FCAS construct is complicated enough: Berlin, Paris and Madrid endeavor to build a sixth-generation fighter aircraft on equal terms. Each country brings a national industry champion — Airbus Defence and Space, Dassault and Indra, respectively — which also are meant to cooperate on equal terms. Below that, there are trinational industry teams for various components, including an engine for the centerpiece fighter aircraft as well as sensors, drones and stealth technology.

Disagreements between Dassault and Airbus over work share and the handling of intellectual property rights slowed progress in recent months, though recent reports suggest there is a deal within reach. The dispute extends to lower-tier teaming arrangements as well as negotiations between governments. Most recently, engine-makers Safran Aircraft Engines, MTU Aero Engines and ITP Aero announced they had sorted out their disagreements.

Germany’s iffy defense budget projections add to the uncertainty surrounding the program. Defense officials have all but thrown up their hands when it comes to getting key programs included in the budget in the short term. After that, all bets are off, as government analysts expect the modernization requirements to outpace available spending after 2022.

Large projects like FCAS typically come with considerable uncertainty built in, but German lawmakers typically force the government to show its hand at key junctures before cutting any checks. The May 7 missive to parliament about FCAS and other funding plans includes only a generic reference — “federal budget” — in places where programs are supposed to be delineated to specific line items in the defense budget nomenclature.

“Normally, such a proposal would never make it here,” said a Bundestag aide, adding that the tactic of submitting unfunded programs could serve to pressure the Finance Ministry headed by Olaf Scholz, a Social Democrat who was just named his party’s chancellor candidate for the Sept. 26 general election.

German finance officials flagged several outstanding hurdles in a report on FCAS to lawmakers earlier this year. For one, a French request to except certain French intellectual property concessions, classified as “specific foreground information,” from the overall sharing architecture had raised eyebrows in Berlin and Madrid. The dispute likely would not be completely resolved before the end of May, the March report read, adding that France had yet to spell out its specific reasoning at the time.

In addition, industry offers had come in at 25 percent above the budget ceiling of €2.5 billion (U.S. $3 billion) agreed by the partner nations for program stages 1B and 2, the Finance Ministry report stated. The companies also were expecting to receive “significant” additional services from the nations as in-kind contributions, it added.

The three governments had yet to speak to the possibility of a budget increase as a result of “high industry demands” at the time, according to the March document.

Sebastian Sprenger is associate editor for Europe at Defense News, reporting on the state of the defense market in the region, and on U.S.-Europe cooperation and multi-national investments in defense and global security. Previously he served as managing editor for Defense News. He is based in Cologne, Germany.

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