France and Germany have formally abandoned their joint Future Combat Air System (FCAS) project, a €100bn initiative launched in 2017 to develop a next-generation European fighter jet. The decision follows years of deadlock between France’s Dassault Aviation and the European aerospace group Airbus, representing German and Spanish interests, over leadership roles and technology sharing. French President Emmanuel Macron and German Chancellor Friedrich Merz acknowledged that the companies would not reach an agreement, marking a setback for European defence integration. Disputes centered on Dassault’s insistence on leading the project to protect its intellectual property and Germany’s differing military requirements, including nuclear capabilities and carrier operations.

The FCAS program was designed to replace France’s Rafale jets and Germany’s Eurofighter jets by 2040, incorporating not only the fighter jet but also drones and a secure combat data network. While the crewed jet component has been scrapped, European sources indicate that development of drones and the data cloud may continue. German officials described this integrated network as the 'nervous system' of future air combat, linking aircraft and drones into a unified system.

The collapse highlights deeper challenges in European defence cooperation, particularly as countries face a more assertive Russia and shifting US commitments. Despite mediation attempts and high-level political support, including from Macron and Merz, the rift between industrial partners proved insurmountable. With French elections approaching, Paris may still seek to salvage political value from related defence initiatives, though the core jet project is now defunct.