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Financial Problems Plague Airbus A400M

Parent company EADS and officials from 7 nations that ordered Airbus' military transporter wrangled Thursday over financing and future of troubled program.

BERLIN (AP) -- European aerospace company EADS and seven countries that ordered its A400M military transporter narrowed their differences on financing the troubled project Thursday, the German Defense Ministry said.

Representatives of the two sides who met in Berlin were able to agree to a large extent on the timetable for the plane's delivery and technical performance parameters, a ministry spokesman said on condition of anonymity in line with department policy.

He said that the positions on financing -- the main problem -- moved closer. EADS and the customer countries agreed "to continue talks on the remaining gap in financing as soon as possible," he added.

He declined to give any details, and said the venue and timing for further talks had not yet been determined.

EADS spokesman Alexander Reinhardt declined to comment on the negotiations.

The Airbus military plane is four years behind schedule and financially off course. Thursday's round of talks was the fourth in recent weeks to resolve a standoff over the aircraft's future.

They coincided with a regular summit in Paris between the leaders of France and Germany, two key customers.

"We have to find a solution and we will find one very quickly," said Sarkozy, describing it as a "strategic project."

German Chancellor Angela Merkel said that "the negotiations continue and we have to put everything in place to find a solution."

EADS has urged the seven nations -- Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey -- to increase their funding for the delayed project by euro6.4 billion (nearly $9 billion).

EADS threatened to scrap the program if no agreement is reached and originally gave the governments until the end of January to make a decision -- a deadline that was missed.

France's defense minister, Herve Morin, has said the seven countries' defense ministers also will discuss the issue on the sidelines of a NATO meeting in Istanbul, Turkey, that starts Thursday.

The German Defense Ministry has said it is committed to finding a solution suitable for all parties.

Defense Minister Karl-Theodor zu Guttenberg was quoted in a parliamentary newsletter last week as saying that the seven nations were willing to contribute a maximum of euro2 billion ($2.81 billion) in extra funding.

The four-engine turboprop military plane had its maiden flight in December. The price tag for the 180 planes ordered was fixed at almost euro20 billion in the initial contract in 2003. Germany is the biggest costumer with 80 aircraft ordered, and France wants 55.

The A400M is seen as occupying an important niche market between the Lockheed Martin C-130J Hercules, which carries only half the payload, and Boeing's C-17 Globemaster III, which is larger, costlier, and less tactically versatile.

Associated Press writers Geir Moulson in Berlin and Deborah Seward and Greg Keller in Paris contributed to this report.

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