BERLIN - German Chancellor Friedrich Merz said on July 9 that he is determined to stick to the original agreements on how the work is divided in the Future Combat Air System (FCAS) program, a joint effort between Germany, France, and Spain valued at over 100 billion euros.

His comments follow a report that France is now demanding an 80 percent workshare, a significant departure from the previously established arrangement. Chancellor Merz confirmed he is in regular contact with French President Emmanuel Macron on the issue, with a meeting between the two leaders scheduled for later this month in Berlin.

This disagreement over the project's configuration could have serious consequences, potentially scrapping the agreed-upon division of tasks between the key industrial partners - France's Dassault Aviation, Germany through its participation in Airbus, and Spain's Indra. According to a defense industry source, if France pursues its demand, it is unlikely the project could enter its next development phase as scheduled by the end of this year.

While acknowledging that differing views on the consortium's composition have not yet been resolved, Chancellor Merz expressed his confidence that the partners would ultimately succeed in finding a solution for the program, which aims to deliver a next-generation fighter to replace the Rafale and Eurofighter jets starting in 2040.

Source: Reuters
Associated URL: https://www.reuters.com/business/aerospace-defense/merz-urges-france-stick-deal-joint-fighter-jet-project-2025-07-09/

WASHINGTON - President Trump signed a budget reconciliation bill on July 4th that includes sweeping tax cuts, around $150 billion for defense priorities, and adjustments to domestic programs to offset some costs of the legislation. The House initially passed its version of the bill in May, and the Senate passed a modified version of the legislation on July 1 by a narrow vote of 51-50, with Vice President JD Vance serving as the tie-breaking vote. Rather than make additional changes to send back to the Senate, the House adopted the Senate version by a vote of 218-214 to meet an informal deadline of July 4.

The administration's FY26 request relies heavily on the reconciliation bill, which includes the following defense investments:

Sec. 20001: $9 billion for Servicemember Quality of Life. Funds increases in allowances and special pays, as well as improvements to housing, healthcare, childcare, and education assistance to military families.

- Sec. 20002: $29 billion for Shipbuilding and the Maritime Industrial Base. Expands the size and enhances the capability of our naval fleet. Invests in autonomous surface and subsurface technology. Builds capacity and improves infrastructure in the maritime industrial base.

- Sec. 20003: $25 billion for Golden Dome for America. Supports President Trump’s vision for layered missile defense shield for America. Develops space-based assets support the system and rapidly accelerates defense against hypersonic threats to the homeland and deployed troops.

- Sec. 20004: Expands production of missile defense interceptors and counter drone capabilities.

- Sec. 20005: $16 billion to Expedite Innovation to the Warfighter. Expands DoD initiatives to scale production of game-changing new technology and expedite delivery of low-cost, attritable weapons systems and artificial intelligence needed to ensure success on future battlefields.

- Sec. 20006: $400 million for Fiscal Responsibility and a Clean Audit. Invests in the IT infrastructure, business systems, and new AI/automation capabilities needed to ensure the DoD fully passes an audit.

- Sec. 20007: $9 billion for Air Superiority. Reverses declines in fighter force posture. Accelerates delivery of next generation aircraft and autonomous systems.

- Sec. 20008: $15 billion for Nuclear Deterrence. Accelerates modernization of the nuclear triad. Improves readiness of our current nuclear deterrent. Invests in infrastructure needed to restore America’s ability to manufacture nuclear weapons.

- Sec. 20009: $12 billion for Pacific Deterrence. Expands military exercises and improves readiness of Indo-Pacific forces. Acquires capability and builds infrastructure needed to defend forces and conduct military operations in the Western Pacific.

- Sec. 20010: $16 billion to Enhance Military Readiness. Improves readiness through modernization of depots and shipyards, expands stocks of critical spare parts, and enhances training and capabilities of active and reserve forces.

- Sec. 20011: $1 billion for Border Security. Funds DoD personnel and logistics support to help carry out President Trump’s border, immigration, and counterdrug enforcement agenda.

- Sec. 20012: $10M for DOD IG to conduct specific oversight on appropriations in this title.

- Sec. 20013: Authorization of military construction projects in this title.

Source: Forecast International
Associated URL: https://armedservices.house.gov/legislation/one-big-beautiful-bill.htm

WASHINGTON - The major services and combatant commands have released unfunded priorities lists (UPL) totaling nearly $50 billion in FY26. The UPLs are a traditional component of the annual budget process. Following the release of the request, the services and combatant commanders are tasked by Congress to identify any programs or priorities that went unfunded or underfunded in the request. Lawmakers frequently make use of these wish lists during the budget markup process to allocate additional funds to certain programs.

The Department of the Air Force outlined $16 billion worth of unfunded priorities, comprising $10 billion for the Air Force and $6 billion for the Space Force. The largest item on the Air Force's list is $4.5 billion for increasing production of munitions programs. Nearly $2 billion is outlined for aircraft readiness as well. More than half of the Space Force's wish list, some $3.5 billion, would support the MILNET satellite program, which is a planned communications satellite effort being headed by SpaceX. Meanwhile, the National Guard Bureau issued a $2.4 billion UPL that included nine F-15EX and six F-35 fighters.

The Navy's list includes $1.4 billion for its F/A-XX sixth-generation fighter, which lost funding in the request, as well as $2.2 billion for to rebuild munitions stockpiles and support the munitions industrial base.

Separately, several combatant commands outlined wish lists valued at around $13 billion. Most of that funding, or nearly $12 billion, comes from U.S. Indo-Pacific Command, which wants additional money for unmanned systems and counter command, control, computing, communications, cyber, intelligence, surveillance, reconnaissance and targeting systems.

Source: Breaking Defense
Associated URL: https://breakingdefense.com/2025/07/from-fighters-jets-to-space-systems-military-sends-lawmakers-over-20b-worth-of-unfunded-priorities