BERLIN/PARIS - France, Germany and Spain have reached agreement over starting the next phase of the development of a new fighter jet dubbed Future Combat Air System (FCAS), Europe’s largest defence project at an estimated cost of more than 100 billion euros, two sources told Reuters on Friday.

The three countries and their respective industries had struck a deal, said a defence source who spoke on condition of anonymity and did not give details.

A French official also confirmed that the industries, seen as the main stumbling blocks on the way to an agreement recently, had found a deal to move to the next phase of the warplane project.

The German government said that talks over the next phase were progressing.

“We have nothing new to report but we are on the right path,” a defence ministry spokesperson told reporters in Berlin.

“… As soon as there is agreement, we will communicate it,” he added.

Asked whether there will be an announcement at a meeting between German Chancellor Olaf Scholz and French Prime Minister Elisabeth Borne next Friday, Scholz’s spokesman said: “We are very confident that we will be able to answer your question on Friday.”

Previously, sources had said that the next development phase for the Future Combat Air System (FCAS) is expected to cost some 3.5 billion euros ($3.63 billion), to be shared equally by the three countries.

France’s Dassault, Airbus and Indra – the latter two representing Germany and Spain, respectively – are involved in the scheme to start replacing French Rafale and German and Spanish Eurofighters from 2040.

French President Emmanuel Macron and then German Chancellor Angela Merkel first announced plans in July 2017 for FCAS, which will include a fighter jet and a range of associated weapons, including drones.

Lately, the project – originally meant to unify Europeans after the migration crisis and Britain’s decision to leave the European Union – has been a source of tension between the two countries.

Last month, Macron cancelled a joint Franco-German ministerial meeting over disagreements with Berlin on a wide range of issues including defence and energy projects.

Both sides had been struggling for more than a year to agree the next stage of FCAS‘s development, although the French and German government broadly agreed on the project.

Some sources saw the blame lying with Dassault, as the company had refused to budge in a long-running row over intellectual property rights.

Other sources blamed Airbus for pushing for a bigger workshare of the Dassault-led project, insisting it should be given “equal footing” with the French company.