German Government Under Pressure to Scrap Meads Missile Project

German Chancellor Angela Merkel’s government came under pressure from coalition and opposition lawmakers to scrap the seven-year-old Meads missile-defense project after the U.S. canceled the program.

The Pentagon said yesterday it will terminate funding for the Medium Extended Air Defense System when the current contract ends in 2013. A lawmaker for the Free Democratic Party, Merkel’s coalition partner, called the U.S. decision “not unexpected and correct” and renewed the party’s objection to the project.

“If the U.S. is now canceling the project as part of budget-cutting measures, Germany shouldn’t be left behind,” the Free Democrats’ Juergen Koppelin, who sits on the parliamentary budget committee, said today in an e-mailed statement in Berlin.

The Free Democrats, which opposed the project when it was approved by a Social Democratic-led government in 2005, last year called for the end of Meads as part of measures to cut 8.3 billion euros ($11.2 billion) in defense spending by 2014.

Alexander Bonde, a lawmaker from the opposition Green Party, said Germany should scrap the program after 2013 and begin talks with the U.S. and Italy -- the other two partners in the project -- to end the development stage immediately. Overruns already would cost the German government an additional 250 million euros over the initial 1 billion euros in development costs for Germany, according to his office.

The Greens endorsed Germany’s participation in the project in April 2005 after some of the party’s conditions were met.

Germany will continue its commitments for the development phase of the project, according to a Defense Ministry official who declined to be identified in line with government rules. The official wouldn’t comment when asked about the government’s intentions beyond the development phase.

Cost, Delay

A Pentagon fact sheet showed that continuing with the program would have required as much as $1.16 billion additionally for the five-year period ending 2017. The Meads system had grown in cost by about $1 billion and its overall schedule delayed an additional 18 months, according to the Senate Armed Services Committee in its version of the fiscal 2011 defense authorization bill, passed by Congress last month.

The Meads program is managed out of Orlando, Florida, under Meads International LLC, a joint venture of Bethesda, Maryland- based Lockheed Martin Corp., Lfk-Lenkflugkorpersysteme Gmbh of Germany and MBDA of Italy. MBDA is the world’s second-largest missile maker and is jointly owned by BAE Systems Plc, European Aeronautic, Defence and Space Co. and Finmeccanica SpA.

To contact the reporter on this story: Patrick Donahue in Berlin at at pdonahue1@bloomberg.net.

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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