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Funding For Airbus A400M Drying Up

France's defense minister says EADS should not expect more money from customer governments of the troubled A400M military transport plane.

PARIS (AP) -- European defense and aerospace giant EADS should not expect any more government money to help salvage the over-budget A400M military transport plane, the French defense minister said Monday.

Herve Morin said customer governments had responded in writing Friday to EADS CEO Louis Gallois, after the company made a new offer to help resolve that funding issues that are plagued the plane's development.

"(The letter) said simply to Mr. Gallois, 'Here's what we've said, here's what we've confirmed, and don't expect any more,'" Morin told reporters of the latest to and fro communications between the two sides.

EADS and the seven nations that ordered the Airbus plane have been haggling over who will cover euro5.2 billion ($7 billion) in cost overruns that the contractor says have threatened the program altogether.

The customer countries -- Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey -- have agreed to put up euro2 billion, plus another euro1.5 billion in loan guarantees, the French defense ministry has said.

EADS, for its part, has ponied up another euro800 billion -- leaving a potential shortfall of euro900 million.

Morin has said he's hopeful that an accord will be reached, but insisted Monday that EADS "can't count on an extra effort on behalf of the partner states of this program."

EADS said talks are ongoing.

"All sides are interested to find a solution acceptable to all parties as quickly as possible," company spokesman Alexander Reinhardt said, declining to comment further.

The governments plan a meeting on the A400M on the sidelines of a regularly scheduled gathering of EU defense ministers on Wednesday and Thursday on the Mediterranean resort of Mallorca, Spain.

"I think the conditions have been reached for a possible political accord in Palma de Mallorca," Morin said.

EADS unit Airbus has complained that the program is draining money and valuable resources better used elsewhere. Officials say the program is a key test of Europe's ability to assemble a badly needed military airlifter, and tout its export potential.

The A400M, a four-engine turboprop, is seen as inhabiting an important niche market between the Lockheed Martin C-130J Hercules and Boeing's C-17 Globemaster III.

The plane, now four years behind schedule, had its maiden flight in December. The program was launched seven years ago with an order for 180 airplanes for a cost of euro20 billion.

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