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Spain Says Deal Reached On A400M Military Plane

Countries behind Airbus A400M military transport plane have reached an agreement in principle on troubled project's future, Spanish defense minister said.

PALMA DE MALLORCA, Balearic Islands (AP) -- The countries behind the A400M military transport plane have reached an agreement in principle on the troubled project's future, the Spanish defense minister said Wednesday.

Carme Chacon announced the deal as she opened a two-day meeting of EU defense ministers on the Spanish Mediterranean island of Mallorca.

She did not say how the countries would resolve their disagreement over funding the late and over-budget project, saying details of the agreement would be provided on Thursday.

"We reached an agreement in principle between the seven nations in the project and EADS," she said, referring to the parent company of A400M manufacturer Airbus. "The Airbus project will be a success for Europe."

EADS has been haggling with the seven customers -- Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey -- that ordered 180 of the turboprop transports regarding who should pay for the costly overruns that have put the program almost four years behind schedule.

In Berlin, German Defense Minister Karl-Theodor zu Guttenberg also refused to provide any details on the negotiations on Wednesday. "I think those are constructive negotiations and we will reach a solution," he told reporters in Berlin.

In Munich, EADS spokesman Alexander Reinhardt declined to comment on Chacon's statement, but he did say in an interview, "All parties are working to find an agreement that is acceptable to all sides."

The euro20 billion ($26.9 billion) project is over budget by about euro5.2 billion ($7 billion). The seven nations had earlier agreed to put up euro2 billion more, plus another euro1.5 billion in loan guarantees. But EADS said that is not enough to proceed with the project.

On Monday, French Defense Minister Herve Morin said the governments will not provide any additional funds to help salvage the project.

European nations have long been hampered by the shortfall in strategic military airlift capabilities. In the 1990s, they struggled to deploy forces to nearby troublespots in Bosnia and Kosovo without using U.S. Air Force transports such as the Boeing C-17 Globemaster III.

Airbus claims the A400M, which uses the largest turboprop engines ever fitted to a Western aircraft, will be able to carry twice the load of another competitor, the Lockheed Hercules, and that its fuel-efficient power plants will make it cheaper to operate than the jet-powered C-17.

Associated Press writers Juergen Baetz in Berlin and Greg Keller in Paris contributed to this report.

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