By Pierre Tran
Paris – Germany pulled out of building a new generation fighter (NGF) with France, with Chancellor Friedrich Merz June 10 recasting cooperation around developing a combat cloud for command and control over air, land, sea, and space.
“This presents a great opportunity for a central Franco-German defense industry project of the future, one that we intend to realise together,” the chancellor said, Reuters reported.
“Our defense ministers will now work out how this can be implemented in the run-up to the next Franco-German intergovernmental meeting in Germany, which we will be holding in July,” he said.
Merz was speaking at the opening of the ILA Berlin air show after the Chancellery briefed June 8 news agencies that Germany had withdrawn support for the fighter project.
That political retreat from a totemic European fighter deal came against a backdrop of perceived rising Russian threat, and uncertain support from the key Western ally, the U.S.
Berlin’s withdrawal from the fighter came after German industry, led by Airbus Defence and Space, lobbied against working with the French partner, Dassault Aviation. Airbus DS said it accepted the French company as prime contractor, while seeking what it called “interdependency.”
Dassault has long pursued strong independent management, reflecting its history as a family-controlled company, and made clear it wanted Airbus DS to take on a subcontractor role.
The fighter jet had been the key element – pillar one – in the future combat air system (FCAS). The FCAS partners – France, Germany and Spain – had planned to field a new stealthy fighter, flying with remote carrier drones, and a combat cloud.
Patience had clearly worn out in Berlin.
France Follows Germany
The German Chancellery’s media briefing ahead of the Berlin air show left the office of French President Emmanuel Macron confirming the fighter project had effectively collapsed.
“The German authorities considered that it was not possible to put further pressure on the companies concerned,” the Elysée said in a statement.
“The French authorities will continue to encourage our companies and armed forces to explore ways and means of pursuing ambitious European projects that are consistent with our national security interests,” the president’s office said.
Macron had sought a decent interval to reshape the FCAS project and save face, media reports said, but his German counterpart had the ILA air show on the agenda. The FCAS project name will be retained, but without a fighter.
For Dassault, that European fighter appeared to be of marginal interest, with its full-scale mock up of the aircraft placed on the sidelines of its outdoor display at the 2025 Paris air show, while its Rafale fighter and prototype Neuron combat drone were given pride of place at the chalet. The chalet display indicated the planned F5 upgrade of the fighter, flying with combat drones, as a lead-in to a new generation fighter.
German Options
Leaving a joint development with both France and Spain poses problems for Germany, verging on the hubristic, said Sash Tusa, analyst at equity research firm Agency Partners.
Germany’s options appear to be to develop its own fighter, join the Global Combat Aircraft Program (GCAP), or team up with Sweden, he said. Germany could almost certainly afford the cost to build its own fighter but such an approach would take longer, and likely higher risks, than a collaborative approach.
“It would take almost certainly time to negotiate joining GCAP, and Japan is driving an aggressive timeline on the Tempest fighter,” he said. “In terms of timescale, Japan is effectively leading GCAP development, followed by Italy, with the U.K. as the weakest partner, particularly for financial reasons.”
Those difficulties in the U.K. could be seen with the June 11 surprise resignation of the defense minister, John Healey, who released his letter to Prime Minister Keir Starmer.
“You have been unable, and the Treasury has been unwilling, to commit the resources that the nation needs to defend the country at this time of rising threats,” Healey’s resignation letter said.
Meanwhile, Sweden clearly has an exceptional national capability to build advanced combat aircraft, Tusa said, but he added that “a joint venture with Germany might be very lop-sided, and so unstable, given Germany’s far larger economic size.
Saab chief executive, Micael Johansson, said Dec. 21 there was interest in working with Airbus DS, while assuming there would be corporate independence, respect of intellectual property, and backing of the respective governments.
Meanwhile, Airbus led a German group which pitched a position paper to stir government interest in a national initiative for a sixth-generation fighter. The “Team Gen 6” industry lobby was composed of Airbus Defence and Space, Autoflug, Diehl Defence, Hensoldt, Liebherr, MBDA, MTU Aero Engines, and Rohde & Schwarz.
Back in the late 1990s, the U.K. firm British Aerospace (BAe) and German company Dasa held advanced talks for a “friendly” merger. Dasa insisted on a 50/50 deal, while the former wanted a larger share, based on financial valuation.
That 50/50 position pointed up the importance of a German collegial approach, distinct from the British auditor’s assessment of assets and liabilities. The Anglo-German deal never happened, as BAe broke off talks to acquire the cash-rich GEC, which held the Marconi military electronics unit.
The French, German, and Spanish chiefs of defense staff signed the High Level Common Operational Requirement Document (HL CORD), showing they shared an operational vision for FCAS, said an article in the Revue Defense Nationale marking the 2019 Paris air show.
The three defense ministers backed that up by signing a letter of intent 14 February 2019 in Brussels, said the report, written by Eva Portier, a French procurement officer, and Jean-Pascal Breton, then an air force general.
The operational view seems to have shifted, as the German Chancellor has pointed out Berlin does not need a fighter carrying nuclear weapons, or fly from an aircraft carrier. These have been two French requirements from the outset.
Time to Regroup
“RIP (Rest In Peace) – for the time being,” a French defense analyst said, referring to European cooperation.
France has the Rafale F5, which will tide over the French forces for a few years, the analyst said, but a new fighter will be needed around 2040-2050, and combat aircraft will be needed for the planned aircraft carrier, France Libre.
“That will not be easy,” the analyst said. The conflicts in Ukraine and Iran have shown the importance of drones, which opens another debate on what kind of new fighter jet.
Time was needed to find a European solution, the analyst said.
Political and industrial blunders were made at the outset of FCAS, said Jean-Pierre Maulny, deputy director of Institut des Relations Internationales et Stratégiques, a think tank.
“The reasons behind this failure lie first and foremost in the fact that, on 13 July 2017, France and Germany took the political decision to launch the program on the basis of a 50/50 division of responsibilities under French leadership, without considering whether such an arrangement was realistically workable,” he said in a June 9 research note.
That 50/50 should have been reconsidered on the fighter to give a greater work share for Dassault, to reflect the company’s greater expertise in that area, the research note said.
It is hard to see there could have been a resolution to deep differences on the industrial front.
Airbus and Dassault needed to share the same strategic interests, in view of the sheer scale of cooperation required, the note said. That cooperation might have arisen if the two companies had created a joint venture company to manage the program. But such a project did not exist, Dassault would have rejected it, and Airbus would have considered taking over Dassault, the note said.
“Although the disagreement is indeed industrial in nature, the French and German governments should from the outset have identified the threat hanging over (FCAS) and sought to address it,” the note said.
Even if the Elysée had called on Dassault to work with Airbus, it is not clear the French company would have agreed to accept the German firm as equal partner, as the family-controlled firm is known for its independent spirit, the defense analyst said.
For Renaud Bellais, co-director of the defense observatory at the Fondation Jean Jaurès, Airbus ending the fighter project was a Pyrrhic victory for Dassault and France, daily Le Monde reported June 11. The 2024-2030 military budget law includes a demonstrator sixth generation fighter to be built by 2035, but France lacks funds to finance development on its own, he said.
French Deficit Weighs
France has a budgetary problem seen as weighing on its ambitions for defense spending. The French public deficit is forecast to rise to 5.2 pct of gross domestic product this year from 5.1 pct in 2025, daily Le Figaro reported, exceeding the government’s 5.0 pct target. The deficit is forecast to rise to 6.2 pct next year, if measures were not taken, the report said.
The target set by the European Commission is a deficit of 3.0 pct of GDP, and prime minister Sébastien Lecornu has pledged to bring the funding shortfall to under that figure in 2029.
That French fiscal distress pointed up the importance of client nations such as India and the United Arab Emirates, which could be partner nations for a new fighter project, an analyst said.
Funds for Wary Dassault
Meanwhile, Dassault has “benefited” from €400 million of budgetary authorization, and €190 million of payment credits for 2026 for development of the Rafale Mark F5 upgrade, Le Monde reported. That F5 version is due to enter service in 2032, the report said.
The plan is to fly the F5 with an uncrewed air combat vehicle, assuming the budget were released.
Dassault had stopped recruiting for its design office as there was uncertainty over the future of FCAS, the Eurodrone, the uncrewed air combat vehicle, and Rafale F5, the CGT labor union said in its February 10 newsletter.
Dassault had called for a 51 pct share of FCAS phase 2, namely building and flying a prototype fighter jet and two types of remote carrier drones by the end of this decade. That was Dassault’s response to what it saw as unfair work share of two thirds for Airbus, and one third for the French company, based in Saint Cloud, the genteel suburbs of the capital.
Airbus DS, based in Manching, southern Germany, had sought a sharing of technology, management, and work reflecting the Airbus units in Germany and Spain.
Dassault executive chairman Eric Trappier said March 4 the cost of a new fighter would be less than €50 billion. That compares to the estimated total €100 billion for the full FCAS project.
Trappier pointed up May 18 close ties with the Swedish Wallenberg family which controls Saab, builder of the Gripen fighter. The senior executive was speaking at an evening debate at the Collège des Bernardins, a cultural centre housed in a 13th century abbey, formerly home to Cistercian monks.