France distances summit with Germany from A400M row
* No A400M statement planned after Franco-German summit
* French official sees cost deal by end-Feb, cites progress
By Matthias Blamont and Tim Hepher
PARIS, Feb 3 - France damped speculation that French and German leaders were set to intervene on Thursday in a funding row over the delayed A400M military plane, saying Airbus and its buyers sought a deal by month-end.
But an official in French President Nicolas Sarkozy's office said ministerial crisis talks to prevent the 20 billion euro troop plane project collapsing had made "a lot of progress".
Talks to find billions of euros needed to complete Europe's biggest defence project have slipped past a Jan. 31 deadline, putting pressure on Airbus parent EADS <EAD.PA> as it faces a wall of unknown provisions in accounts just five weeks away.
Talks between Airbus parent EADS <EAD.PA> and buyers -- Britain, France, Germany, Spain, Belgium, Luxembourg and Turkey -- broke off last week over a 2.4 billion euro gap in the amount of money each side is prepared to invest.
Negotiations will resume in Berlin on Thursday, and people familiar with the matter said earlier that, if successful, these could trigger an influential statement of support at a Franco-German summit being held in Paris the same day.
But the senior Sarkozy aide said no formal A400M statement had so far been prepared ahead of the summit with Chancellor Angela Merkel, set to cover topics from economics to education.
"What strikes me is the will to succeed. There will be a meeting of negotiators in Berlin on Thursday. That is where the subject will be handled first," the official said in a briefing in advance of Thursday's summit.
"Our aim is to reach an agreement by the end of the month," said the official, who asked not to be named.
Engine problems and delays have pushed plans to build a new European troop plane more than 11 billion euros over budget.
People close to the talks said on Wednesday the two sides had narrowed differences over funding for the transporter.
"The differences are being narrowed consistently," one said.
ACCOUNTING AXE
The French comments appeared designed to avoid building up detailed expectations ahead of the summit, which could backfire if negotiators fail to make a breakthrough, but did not rule out a last-minute deal.
However, talk of an end-February deadline is unlikely to be welcomed at EADS, which is under mounting pressure to settle the row as an accounting axe hovers over results due on March 9.
EADS declined comment. Its shares ended up 0.1 percent at 14.63 euros.
After cost savings, EADS is facing losses estimated at 7.6 billion euros on the A400M, part of which it blames on political interference and part of which others blame on poor controls.
The company has so far set aside 2.4 billion euros of this while asking buyers for 4.4 billion euros in fresh support. Nations last week rejected that bid and offered 2 billion.
Sources close to the talks said part of the 2.4 billion euro negotiating gap was expected to be bridged through a financing package. One disputed area involved complex inflation clauses.
Anything over 2 billion euros in extra provisions risks pushing EADS to an underlying loss for 2009. It has predicted a full-year operating profit of 2 billion euros before such one-off items. Analysts expect up to 3 billion in new charges.
Fitch Ratings last week also warned the outcome of the negotiations could have an impact on EADS's credit rating.
Germany, which has so far resisted calls for a substantial boost in funds for the plane, on Wednesday said it wanted an urgent solution.
"The government, along with everyone involved, wants to find a solution to the remaining questions as soon as possible -- a solution that is acceptable for all those involved," a German defence ministry spokesman said in Berlin. [ID:nBAT005090] (Additional reporting by Dave Graham, James Mackenzie Paul Carrel, Editing by Louise Heavens/Will Waterman)