Aerospace |
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German Eurofighter
Order Expected Germany has been expected to take 180 of the aircraft worth over US $13 billion; the problem has been an inability to find the final 10% of the money needed to finance the order. The German ministers of defense and finance have been in discussions for weeks on resolving the shortfall, so far without success.
Both sides report being close to an agreement, however. And the resolution may come as early as this week. One possible financing mechanism being floated involves Eurofighter partner DASA (Daimler-Benz Aerospace) paying back government loans early. The German government loaned billions of marks to DASA to help the company fund its portion of Airbus commercial projects. The loans are coming due, but if DASA could accelerate their repayment, the cash could help finance the German Eurofighter purchase.
While it sounds somewhat confusing, it really isn't. Germany loaned DASA money to get involved in Airbus. If DASA pays the government back, Germany will have the money to pay DASA to help produce the Eurofighter. The German government gets 180 Eurofighters, helps DASA (and Europe) stay in the defense aerospace business, and wears a white hat for having helped the company in its Airbus efforts in the first place. The Eurofighter has been a tough program. The fighter is a partnership of DASA, Italy's Alenia, British Aerospace, and Spain's CASA. Britain has already committed to take aircraft. Germany has been balking in the face of continuing budget problems as a result of the costs of reunifying the country. Meanwhile, Spain and Italy have delayed ordering jets to see if Germany will kick in, so they're not stuck with a huge piece of the development costs in the event Bonn backs out. Time is running out on the discussions, however. On Tuesday of this week the German Cabinet will decide on the upcoming fiscal year's budget. Eurofighter will either be in, or out. With all sides proclaiming confidence, the defence budget will likely include 180 gleaming new Eurofighters. But not before a few more hiccups have been cured. Disturbing sounds came from the Social Democrats opposition
party, suggesting a delay in funding until the aircraft can be
proven operational. An article in a prominent German magazine
last week suggested that the nascent fighter has problems with
its computers and avionics. The article's contentions were
immediately refuted by the German defense ministry, but the
suggestion of a three year delay in purchasing Eurofighters must
have seemed just one more nagging headache for the four nations
involved.
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