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Sources: German and French leaders are unable to resolve the FCAS fighter jet dispute

Two?German government officials told?Monday that the German Chancellor Friedrich Merz, and French President Emmanuel Macron, have concluded that companies involved 'in building a?joint fighter jet cannot?reach an agreement.

The sources said that both leaders agreed to continue developing a drone system and data networks related to the Future Combat Air System project.

Macron's office didn't immediately respond to a request for comment.

The failure to reach agreement on the EUR100 billion ($116 billion) project highlights the "struggles" Europe has faced rebuilding its military capability after decades of underinvestment.

According to a German government source, Merz and Macron discussed Friday the decision to end the troubled project on the sidelines the EU-Western Balkans summit in Montenegro.

They had tried in vain before to convince the European aerospace group Airbus that represents Germany and Spain and France's Dassault Aviation, to come to an agreement.

According to a European source who was briefed about the issue, the two sides are moving towards a solution that will save face. The remaining systems, including the "combat clouds" of highly secured links, will continue to be known as Future Combat Air System or FCAS.

The source said that with the French elections next year, Macron is reluctant to give up the FCAS project he started in 2017 with the former German Chancellor Angela Merkel.

The project's future, which focuses on a fighter jet and drones that are linked through a "combat cloud" classified by the Pentagon, has been in doubt for several months due to disagreements between the two sides over control and specifications. (Reporting and writing by Ludwig Burger and Andreas Rinke; additional reporting and writing by Michel Rose and Tim Hepher; editing by Thomas Seythal, Andrew Heavens and Andrew Heavens).

(source: Reuters)