France, Germany pledge to help Airbus, share burden

France and Germany pledged support for crisis-hit planemaker Airbus yesterday and promised to share the burden of restructuring after costly delays to its superjumbo A380 project.

At a summit between the French and German governments, German Chancellor Angela Merkel confirmed that Berlin was considering the option of buying a stake in Airbus parent EADS but said no decision had been made yet.

"Airbus and EADS are in difficulties but that does not prevent us from saying clearly that we have confidence in this product and the problems must be dealt with quickly and comprehensively," Ms Merkel told a joint news conference.

In Hamburg, Mayor Ole von Beust told reporters the German government had decided to buy a stake in EADS and a working group would decide on the conditions of the purchase.

He said Ms Merkel had made the decision on Wednesday.

The delivery delays to Airbus's flagship A380 that have shaken the European aerospace group have rekindled tensions between the two main partners as worries grow over job cuts and plant closures.

German ministers, already upset at French suggestions that the delays were the fault of an Airbus plant in Hamburg, have made it clear they do not want to see Germany suffer disproportionately from restructuring measures.

Spain, which holds a 5.4 per cent stake in EADS, has also expressed concern, saying it wanted to increase its stake to protect Spanish jobs.

New Airbus chief Louis Gallois earlier reassured the mayor of Hamburg, where Airbus has its main German plant, that there would be tough decisions but that he was fully aware of the German city's status as one of the pillars of Airbus.

The French government owns 15 per cent of EADS, while German carmaker DaimlerChrysler and French media group Lagardere are reducing their stakes to 22.5 per cent and 7.5 per cent respectively.

Daimler has repeatedly said it plans to keep a 15 per cent holding and would be prepared to reduce its stake further to that level from 22.5 per cent. It has also said it would only sell EADS shares with the agreement of the German government.

The joint sitting of both countries' Cabinets had also been expected to address a number of other concerns, notably European Union expansion and worries over the nuclear programmes of both Iran and North Korea.

But the crisis at EADS has dominated other issues.

With political wrangling overshadowing the group's restructuring plans, Mr Gallois, who also jointly runs EADS, visited Germany to reassure his partners that the impact of job cuts would be shared.

Mr Chirac echoed Mr Gallois's comments, saying restructuring should be spread evenly between Germany and France.

"I told her (Merkel) I shared the same concern and that the restructuring plan that has been launched... has to be harmoniously spread between the two main sites, by which I mean Hamburg and Toulouse," Mr Chirac told reporters. Problems related to the production of the A380 have led to two-year delays in deliveries and a €4.8 billion future profit shortfall.