Germany plans to slash the number of military aircraft it will buy from EADS, the European aerospace company, as it shrinks its armed forces by a fifth as part of an austerity drive.
In a confidential document, seen by the Financial Times, the defence minister Thomas de Maiziere says he wants to cut Germany’s orders for the Eurofighter Typhoon fighter jet, the A400M transporter, and the Tiger attack and NH-90 transport helicopters.
The move looks set to trigger tense negotiations with EADS and its partners such as Italian-British AgustaWestland and the UK’s BAE Systems, which holds a 33 per cent stake in the Eurofighter.
It also looks set to lead to tough discussions with a raft of mostly European governments, who helped develop the aircraft and secured so-called “work-share” for domestic industry in proportion to the size of their final order.
Without the willingness of industry and governments – including France, the UK, Italy and Spain – to amend contracts long signed and sealed, Germany would be on the hook for penalty payments running into billions of euros.
According to the document, which was prepared for the German government’s budget committee, Berlin now wants to buy 140 instead of 177 Eurofighters, 40 instead of 53 A400Ms, 80 instead of 122 NH-90s, and only 40 Tigers, half the original order.
The cuts to military procurement – and a reduction in the size of the army to 170,000 troops – come after Germany ended national service for school leavers, and started refocusing an all-professional army for more foreign operations like Afghanistan.
Mr de Maiziere wrote in a memo to lawmakers that the reform was meant to make the Bundeswehr “more efficient and effective”, although the government is also counting on savings of more than €8bn ($11bn) by 2015 to help shore up its budget.
EADS and the government declined to comment before Mr de Maiziere officially unveils his plans later this month. But both sides are bracing for arduous talks that have become a staple of European defence co-operation.
The UK started reducing orders of Eurofighter Typhoon fighter jets three years ago, clinching a deal in spring 2009 which allowed it to sell on part of its Typhoon contingent to Saudi Arabia.
A similar plan is being considered for the aircraft Germany has contracted to buy but now considers surplus, although finding buyers is far from certain, according to industry experts.
India is considering the purchase of more than 100 fighter jets. However, it is interested in jets with air-to-ground attack capabilities and not the early air-to-air Eurofighters Germany is expected to want to ditch.
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