THE GERMAN Government is continuing to question its financial stake in two planned France-German observation satellites, putting at risk the hoped-for satellite/missile alliance between Aerospatiale and Daimler-Benz Aerospace (DASA).

The satellite deal is seen as a cornerstone of the proposed alliance between the two. The issue is not expected to be resolved until a critical meeting between the new French defence minister, Charles Millon, and his German counterpart, Volker Ruhe, on 11 July.

Ruhe is expected to decline to pay for up to 15% of the Helios 2 (optical) and 60% of the Osiris (radar) satellite programmes, together amounting to an investment of more than Fr8 billion ($1.6 billion), claiming budgetary problems.

France is unlikely to be sympathetic to Germany's budget problems the Chirac Government having already made it clear that is own military must find ways of trimming its budget. While the new observation satellites will almost certainly remain funded, the deal with Germany is needed, to reduce the financial burden and the risk.

Ruhe is also unhappy with France's demand that Germany pay up to 5% of development costs of the existing Helios 1 observation satellite, part of the agreement under which the two countries will share access to the new satellites.

Meanwhile, two other French satellite manufacturers, Matra and Alcatel, have each condemned the Aerospatiale/DASA deal, which they say ignores their own suitability for such an alliance.

Source: Flight International