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Germany Defends Drone Order Scrapping With Minister Under Fire

May 16 (Bloomberg) -- German Defense Minister Thomas de Maiziere said the government will scrap any future defense projects with cost overruns as he defended the termination of a 508 million-euro ($653 million) order for Euro Hawk drones.

De Maiziere, whom the opposition accused of deceiving parliament and squandering millions of euros of taxpayers’ money, said the procurement process will be improved with the government’s planned military overhaul so that cost issues are identified earlier. Still, projects that exceed budget will face being pulled, he said.

“If we see that these problems can’t be adequately resolved, if costs threaten to get out of hand, then we would rather pull the plug,” de Maiziere told lawmakers today in the lower house in Berlin, saying the government would rather face a “contained shock than an endless shock.”

Chancellor Angela Merkel’s government said yesterday that it will cut off spending for the unmanned Euro Hawk designed to spy on enemy communications and radar after 250 million euros had already been allocated. The Defense Ministry said it won’t buy four more drones beyond the one already built after confronting procurement problems for equipment overseas.

To meet U.S. and German security requirements, elements of Euro Hawk work between Northrop Grumman Corp. and European Aeronautic, Defence & Space Co. had to be separated during the development phase. EADS said yesterday that equipment developed for the five high-flying spy drones can find other uses.

Rainer Arnold, a lawmaker with the opposition Social Democrats, said “hundreds of millions have been buried in the sand” and accused de Maiziere of failing to inform parliament or the Cabinet of problems in time.

Euro Hawk is a modified version of the Global Hawk unmanned aircraft used by the U.S. Air Force, with EADS providing the sensor payload after it teamed up with Northrop in 2000.

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

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

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