In a joint memorandum of understanding with EADS, the companies said they would work together to develop missile defense systems for the United States, Europe and Asia.

The deal could mean billions in business for EADS and other contractors. Italy's Alenia and Britain's BAE Systems are also expected to take part in the cooperation, which brings full circle a deal closed two years ago between EADS and arch-rival Boeing to cooperate in the system's development.

Boeing is currently the lead contractor on missile defense development in the US For Europe's NATO members, the development of the missile defense system - depending on its scope and the level of participation - could turn into a multi-billion euro program.

But it also faces an uphill battle - EU governments must approve the program and find room for it in their already tight defense budgets.

So far, the only European country that has given the missile defense program thumbs up is Britain. Many European governments are wary of the missile defense system but the project could bring huge rewards for European industry.

Industry observers told the Financial Times Deutschland that the US could invest as much as $8 billion annually in the program.

But defense experts have also questioned the effectiveness of the missile protection shield, which is supposed to destroy incoming missiles in space using either fast anti-missile rockets that crash into the missile in mid-air or laser beams that can also destroy missiles.

For the Europeans, the opportunity to cooperate with the US industry would be an important step to strengthen transatlantic relations. Lockheed Martin, Northrop Grumman, EADS, Raytheon, CSC, IABG, INO and several Israeli firms are among those attending a Berlin conference on missile defense systems this week.

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