After years of infighting, the Franco-German project to build a joint next-generation fighter jet has collapsed.

German Chancellor Friedrich Merz and French President Emmanuel Macron agreed last week that manufacturers Dassault and Airbus failed to resolve key disputes, officials in Berlin and Paris confirmed on Monday.

The Future Combat Air System (FCAS) program, launched in 2017, aimed to build a next-generation fighter to replace Eurofighters and Rafales by around 2040.

The move to scrap one of Europe's largest defense projects comes as Western military officials warn of a mounting threat from Russia and the United States intensifies pressure on Europe to take care of its own defense.

What went wrong with FCAS?

The more than  €100 billion ($115 billion) project, launched in 2017, was once billed as a symbol of Franco-German military unity.

But it has been plagued by years of political and industrial disputes.

French arms giant Dassault Aviation has demanded significantly more control over the project than its industry partner, European consortium Airbus Defence and Space.

The two companies clashed over control of the project's next phase, access to intellectual property and, above all, differing requirements for the aircraft.

Airbus and Dassault Aviation have not immediately commented.

Both governments pushed for the project to succeed

Rearming Europe has been a priority not only for the continent's two largest economies but also for all 27 members of the European Union, many of whom have expressed concerns about their security following Russia's invasion of Ukraine.

The project's collapse comes despite Merz and Macron publicly vowing to make it succeed.

"The expertise in military aircraft construction exists in Germany. German industry can and must now prove its capabilities," Merz said, calling for cooperation with other partners.

Thomas Erndl, the defense policy spokesman for Merz's conservatives in the German Bundestag, said the decision to finally scrap the project was the correct one.

Franziska Brantner, co-leader of Germany's Green Party, described the failure to reach a consensus as a serious setback for European security and defense policy.

"Where industry blocks progress, it is the task of politicians to show leadership and push things through," she told the Handelsblatt newspaper.

Germany and France now plan to focus on a Combat Cloud linking aircraft, drones and sensors. Defense officials are due to meet in mid-July to reset cooperation around smaller projects.

Cedric Perrin, chief of the foreign affairs and defense committee at the French Senate, said Macron "was the only one who still believed in the survival of FCAS."

Edited by: Louis Oelofse

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