August 20, 2018 / 4:09 PM / 3 months ago

UPDATE 1-German defence minister upbeat on chance for more weapons funding

(Adds details, quotes)

By Andrea Shalal

NIEDERSTETTEN, Germany, Aug 20 (Reuters) - German Defence Minister Ursula von der Leyen said on Monday she believed negotiations with the finance ministry and German lawmakers would result in additional funds for major procurement programmes.

Von der Leyen, from Chancellor Angela Merkel's conservatives, must convince the finance ministry, which is led by their coalition partner, the Social Democrats, to cough up more cash, but they have been resisting bigger funding increases for the military.

The current 2019 budget plan calls for a 4 billion euro increase to 42.9 billion, but the defence ministry says it needs more to meet its needs.

"I am optimistic because we have a clear prioritisation," von der Leyen said when asked about the prospect of securing additional funds for a big heavy-lift helicopter programme and other arms projects after a demonstration of NH-90 helicopters at an army base in Niederstetten, in southern Germany.

Ensuring adequate personal equipment for soldiers and digitalisation are the ministry's top priorities, followed by a large number of weapons programmes, she said.

Which arms projects proceed will hinge on talks with lawmakers and on the successful negotiation of contracts to ensure that funds can be allocated, von der Leyen said, adding: "I am optimistic that we will be able to get our work done."

Von der Leyen had shocked some last month when she said the funding for a 4 billion euro programme to replace Germany's ageing fleet of CH-53K helicopters was not yet secure, and would depend on the outcome of the 2019 budget finalisation process.

That could result in delays to a long-awaited competition between two U.S. weapons makers - Lockheed Martin and Boeing, a ministry spokesman said.

LIGHT HELICOPTER DECISION SOON

Von der Leyen told reporters she expected progress on one smaller programme - procurement of seven smaller, light support helicopters to replace an ageing fleet of UH-1D helicopters.

"The decisions are being made in these weeks. We hope we can complete the negotiations for a contract by the end of the year so that it can be signed," she said.

Airbus Helicopter is offering the army its H145M helicopter for the order, while Bell Helicopter, a unit of Textron and maker of the current models, is offering its 429 aircraft, according to media reports.

The expected contract will be worth around 70 million euros, including the aircraft and other services, said a source familiar with the process.

Von der Leyen said the NH90 helicopter had made progress after some initial growing pains, and it played a big role in aiding a U.N. peacekeeping mission in Mali that just ended.

Colonel Peter Goehringer, commander of Transport Helicopter Regiment 30, one of the army's two NH90 units, said a range of measures had helped to improve the aircraft's low readiness rate to 50 percent and that this would grow further.

The NH90 helicopter is built by a consortium owned by Airbus Helicopter, Fokker and Italy's Leonardo. (Reporting by Andrea Shalal Editing by Gareth Jones)

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