France says no deadline in Airbus A400M cash talks

(PARIS) - Talks aimed at drumming up a cash injection for the troubled Airbus A400M project are carrying on and there is no deadline for their conclusion, a senior French defence ministry official said Monday.

Laurent Collet-Billon, an official in charge of armaments programmes, told reporters "you can't fix a horizon for negotiations," adding however that "we will continue to discuss with Airbus at a sustained pace."

European countries badly need the new transport aircraft but the project is more than three years behind schedule and billions of euros over budget.

Louis Gallois, head of the European Aeronautic Defence and Space Company whose Airbus unit is developing the A400M, Saturday called on the seven NATO countries which have ordered the plane to provide "a clear idea" on its future by the end of this week.

They are Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey.

EADS has threatened to pull the plug unless the seven, which have together ordered 180 of the planes for 20 billion euros (28 billion dollars), stump up more cash, saying the European aerospace sector is at stake.

Last week French Defence Minister Herve Morin set a deadline of February 28 to strike a deal.

The cash deficit is estimated at around 5.2-5.3 billion euros, taking into account existing commitments and pledges.

Collet-Billon confirmed that the countries could provide up to two billion euros in supplementary financing, plus a possible 1.5 billion in the form of a loan.

With EADS promising 800,000 euros, that would still leave a gap of around one billion.

He said the aim of the negotiations was to ensure that "the countries are perfectly in tune with each other" so there could be agreement with Airbus for the project to continue.

He added however that the programme had not been managed in a satisfactory way.

Airbus has 52,000 employees around Europe with about 10,000 working on the A400M, designed as a state-of-the-art aircraft that can carry troops, armoured vehicles and helicopters and would replace Europe's ageing fleet of transport planes.