After meeting on Thursday in Paris, German Chancellor Angela Merkel and French President Nicolas Sarkozy called for a quick solution to the funding crisis for Europe's biggest defense project.

"Everything must be done to reach a solution," Sarkozy said. "It is a decisive project which must be resolved very quickly."

Calling it a project of "strategic significance," Merkel said that "everything should be done to find a solution" for financing the plane program, which is four years late and more than $15 billion over budget.

Airbus, its parent company European Aeronautic & Space and the seven partner nations are in talks over who should shoulder the cost overruns that threaten to bury the program.

Airbus wants between $6 billion and $9 billion on top of the fixed costs of $28 billion from the partner nations, which have offered to pay only $2.8 billion.

Spain has now tabled a new compromise proposal that buyer nations chip in $3.6 billion, Spanish newspaper El Pais reports.

While nations are generally unwilling to pay for Airbus' mismanagement with taxpayers' money, they are also eager to save the roughly 10,000 jobs linked to the program.

Germany, France and Spain, together with Belgium, Luxembourg and Turkey have ordered 180 of the A400M planes. They were scheduled to be delivered in 2009, a date that has already been pushed back to 2013.

Abandoning the A400M would mean Airbus would have to pay back some $8 billion in funding to the governments. The company is already pumping some $100 million a month into the program because it has not agreed with the partner governments over its extension.

Yet EADS also says it will lose more money if it continues the program with inadequate additional funding from governments.

The partner countries desperately need a new freighter plane: Britain is eager to modernize its current fleet of Hercules and Boeing C-17 carriers, worn by the mission in Afghanistan; and France and Germany want new transport planes to replace their four-decade-old C-160 Transall machines, which are slow and inflexible.

However, the A400M, which took off for its maiden flight in December 2009, has had engine problems, and Germany has doubts that the plane can be delivered in a reasonable time period.

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