France backs Airbus in funding row with Germany
By Tim Hepher and Jean Décotte
TOULOUSE, France (Reuters) - France backed Airbus EAD.PA on Tuesday in a row with Germany over funding for its next jetliner, in a sign of lingering tension following the collapse of a European aerospace industry merger.
Germany is unhappy about its share of work on the $15 billion A350 aircraft project and has withheld half of a roughly 1.2 billion euro ($1.6 billion) development loan, sources close to the matter say.
In a rare intervention, French Prime Minister Jean-Marc Ayrault said it was essential all partners met their funding commitments for the A350, the newest generation of aircraft in the European planemaker's fierce rivalry with Boeing (BA.N: Quote).
Speaking at the inauguration of an A350 production plant in southwest France, Ayrault did not refer to France's closest ally by name. But he left no doubt that he was referring to the rift with Germany, which has deepened since Berlin blocked a merger between Airbus parent EADS and UK's BAE Systems (BAES.L: Quote).
Speaking to over 1,000 workers, Ayrault said:
"The European partner nations...have always played a major role in the development of major aerospace projects," he said.
"It is of course the case for the A350, and it is essential that their commitments are met in full. As for France, its own commitments will be respected."
Plans for the $45 billion merger to form the world's largest aerospace and defense group fell part earlier this month with most of the participants blaming German Chancellor Angela Merkel for derailing the deal, something Berlin denies. Continued...