Gordon Werner

Wednesday December 19, 7:48 am Eastern Time

INTERVIEW-German opposition slams Airbus A400M signing
By Emma Thomasson and Gernot Heller

BERLIN, Dec 19 (Reuters) - Germany's opposition Christian Democrats accused the government on Wednesday of breaching the constitution by signing a deal to purchase 73 European military transport planes without full parliamentary approval.

Dietrich Austermann, a CDU member of parliament's budget committee, told Reuters that his party was considering appealing to the Constitutional Court after Germany initialled the agreement with seven other nations in Brussels on Tuesday.

"This is one of the biggest procurement scandals that there has ever been," Austermann said in an interview. "The government has ignored the whole parliament by preordaining facts."

European joint arms purchasing authority Occar signed an 18 billion euro ($16.22 billion) contract on Tuesday under which EADS-affiliate Airbus Military would build 196 A400M airlifters. But the start of production remains contingent on German Bundestag approval.

Although the project is seen as important to Europe's ambitions to create a rapid reaction force that can deploy without relying on U.S. lift capacity, impatience with Germany is mounting and Britain and France could buy existing aircraft from U.S. rival Boeing Co if the deal collapses. Lockheed Martin Corp would also benefit.

Volker Kroening, a leading SPD member of parliament's budget committee, said in a separate interview Defence Minister Rudolf Scharping still had his work cut out to persuade deputies to back his plans and agree to pay for the full order of 73.

PARLIAMENT'S RIGHTS

Austermann said the CDU had written to Bundestag speaker Wolfgang Thierse, a member of the ruling Social Democrats, to ask him to stop the purchase and assert parliament's rights.

He said the government had failed to provide parliament with details of how it would finance the purchase of the 73 A400Ms, which Scharping said would cost Germany about 16.7 billion marks ($7.7 billion).

It had also not dispelled concerns expressed by the Federal Auditors Office that Germany did not need so many planes.

The parliamentary budget committee has set a ceiling of 10 billion marks for the project that is only enough for about 40 A400Ms. Leaders of the ruling Social Democrats and Greens agreed last week to double that figure, but still have to persuade the committee to grant formal approval for more cash.

Germany's order of 73 planes is the biggest of the eight nations involved and Airbus has said the minimum order is 180 aircraft, so the project could fail if Berlin only takes 40.

"It is not the last word. We must put the interests of the Federal Republic of Germany to another round of bargaining," SPD budget expert Kroening told Reuters. "The government must present a reasoned proposal in the first quarter of next year."

He said Scharping would have to put his case for doubling the spending ceiling to allow Germany to buy 73 aircraft, but the budget committee could not formally approve that money until 2003 without launching a supplementary budget.

"The budget committee can take note of this but it cannot agree to it," Kroening said. "The government needs to explain how they want to fit the further 10 billion marks into their medium-term financial plan."

With the German defence budget frozen until 2006 at 47.7 billion marks, Kroening said Scharping would also have to explain how he would cover preliminary costs through private funding mechanisms.

"They have to say why we need 73 planes and how they want to finance the full amount, including the development and acquisition costs," he said.

"They have to explain to us how they will prevent a price escalation... We cannot ignore that this is a long-term burden."