It appears that France and Germany are ready to advance to the next stage of their flagship fighter jet project, reviving Europe’s most formidable weapons program and removing a major source of tension between the two countries.

The two countries and two of the major companies involved, Airbus and Dassault Aviation, are about to formally move into a crucial phase of the Future Combat Air System (FCAS) project, during which the demo plane will be built, according to people. Familiar with the matter.

An agreement could be reached in the next few days, said two of the people, who spoke anonymously because there are still outstanding issues.

Some 3.8 billion euros had been allocated to this next phase – called “Phase 1b” – and a deadline had been set for the end of last year.

However, Disagreements arose over who would be responsible for what in terms of intellectual property, who would do what on the plane, and other such details and the negotiations halted.

In October, tensions flared up between France and Germany after a planned meeting between their respective cabinet ministers had to be rescheduled.

The two countries have clashed over everything from proposed EU-wide gas price caps to pipelines and emergency aid programs for people and businesses affected by the energy crisis.

On Monday, Mike Schoellhorn, director of Airbus Defense and Space, said in Berlin that the next phase of FCAS is on a stronger footing. “France and Germany are convinced of the importance of FCAS,” he said. “There is no alternative; it must work.”

FCAS is the largest defense initiative in Europe, launched by Berlin and Paris with much fanfare in 2017 and later joined by Madrid. Its goals included revitalizing Europe’s aerospace sector, bolstering the continent’s political and military relations, and increasing the continent’s strategic autonomy.

A 2020 French parliamentary report put development costs through 2030 at €8bn but cited outside analyst forecasts of up to €80bn.

Due to disagreements between Airbus, which is representing Germany in the project, and Dassault, which is a competitor, the military and lawmakers are becoming more worried that the project might not go forward.

Conflicts arose while deciding who would be in charge of the most important aspects of the program and when deciding how to distribute technological resources.

French and German unwillingness to overcome industrial bottlenecks has also caused frustration. Christian Mölling, a defense analyst at the German Council on Foreign Relations, said the project’s lack of political backing is “botched.”

Paris was also alarmed by Germany’s decision to buy 35 US-made F-35 fighters in March, fearing it meant Berlin was going cold on FCAS or wanted to push back the development schedule.

Germany claimed that maintaining its role in NATO’s nuclear delivery system necessitated purchasing the F-35s immediately.

FCAS was envisioned to include a next-generation aircraft that works seamlessly with drones and is equipped with advanced communication systems.

If it comes to fruition, it could replace fighters flown by the European air forces, such as the Eurofighter, the German Tornado, and the French Rafale.

Just over two weeks ago, sources say, Airbus and Dassault settled on a broad framework for their future collaboration, with concessions on both sides.

Dassault has been the main contractor for the demonstrator from the start, but Airbus disputed some of the fine print on the assignment of duties. Dassault and Airbus both refused to say anything about the details of the talks.

The FCAS is saved by the agreement, but only for the prototype phase. Due to the delays, it is unlikely that an airplane will be ready by 2040. Eric Trappier, the CEO of Dassault, has said that 2050 is a more likely date.

The UK and Italy are developing a rival project called the Tempest, and companies like BAE Systems and the British arm of Italian Leonardo could be at a disadvantage if they are forced to wait for this. Japan is still in talks to see if its FX fighter program can be integrated with Tempest.