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Chancellor Friedrich Merz signaled Wednesday that Germany could abandon the flagship Franco-German Future Combat Aircraft System (FCAS/GCAP) project, saying Berlin does not need the same fighter jets as France.
"The French need, in the next generation of fighter jets, an aircraft capable of carrying nuclear weapons and operating from an aircraft carrier. That's not what we currently need in the German military," Merz told the German podcast Machtwechsel.
Merz said the impasse reflects fundamentally different military needs rather than politics.
"This isn't a political quarrel. We have a real problem in the requirement profile. And if we can't solve that, then we can't maintain the project," he said.
The chancellor's remarks are the most explicit public signal yet that Berlin could abandon the approximately €100 billion ($118.3 billion) project if the core design dispute cannot be resolved.
French President Emmanuel Macron's office responded that he "remains committed to the success" of the project.
"The military needs of the three participating states have not changed, and these needs included from the outset French (nuclear) deterrence as well as the other missions of the future aircraft," the Elysee Palace said in a statement while Macron was travelling in India.
"Given the strategic stakes for Europe, it would be incomprehensible if industrial differences could not be overcome, especially as we must collectively demonstrate unity and performance in all areas concerning its industry, technology, and defence," it added.
Merz said Germany was now "at odds over the specifications and profiles" of aircraft requirements with France.
"The question now is: do we have the strength and the will to build two aircraft for these two different requirement profiles, or only one?" he asked.
If the issue is not resolved, Germany would "not be able to continue the project," he said, adding that "other countries in Europe" are ready to work with Berlin.
For Germany and potentially Spain, several options have been floated, most prominently a partnership with Swedish aerospace firm Saab.
Merz said he is discussing with Defense Minister Boris Pistorius whether Germany will even require a manned fighter jet in two decades.
Last week, Pistorius said the fate of the program would become clear "in the next few days" and suggested Germany would explore partnerships with other nations if needed.
The FCAS project, launched in 2017 to replace France's Rafale jet and the Eurofighters used by Germany and Spain by around 2040, has stalled as France's Dassault Aviation clashed with Airbus over control of the project.
Airbus is Germany's lead contractor, while Spanish defense contractor Indra Sistemas is also involved.
The powerful IG Metall industrial trade union, representing many Airbus workers in Germany, has joined German aerospace industry leaders in backing a split with France.
IG Metall vice president Juergen Kerner and German Aerospace Industries Association president Marie-Christine von Hahn last week urged Berlin to find new partners on the fighter jet.
Insiders expect Germany and France to abandon development of a joint fighter jet but continue cooperation on drones and the "combat cloud," the digital backbone linking manned and unmanned platforms within the FCAS system.
Airbus Defense CEO Michael Schöllhorn recently told Euractiv that separating the fighter jet component would be "a viable option and a good option."
German Foreign Minister Johann Wadephul sought to shut down talk of worsening relations with France, telling Agence France-Presse (AFP) on Wednesday that Paris remains Berlin's "closest partner and most important friend in Europe."
"Our partnership is of existential importance for both our countries, which is why open communication, honest exchange and critical debate between us are so important," Wadephul said.
"Even if there are differences, such as on the Mercosur agreement, there is by far greater agreement on key issues concerning our common European future," he added.
Discord over FCAS has stoked concerns that French-German ties are under strain following recent disagreements on defense spending and French efforts to derail an EU trade deal with South America's Mercosur bloc.
Failure to get FCAS off the ground would be a blow to broader efforts by European NATO allies to demonstrate tight defense cooperation amid threats from Russia and doubts about American security commitments.
Germany has launched a massive military investment program, with Merz vowing to build Europe's largest conventional armed forces.
Building separate jets could make military sense given France's particular requirements but would almost certainly increase overall costs.
Dassault CEO Eric Trappier has insisted his company can develop a fighter jet alone, though costs could strain the French government's already pressured budget.
Merz also ruled out Germany developing its own nuclear weapons, suggesting instead that the country could deploy bombs from France and the United Kingdom.
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