The FCAS programme, a flagship joint effort to build a next-generation combat aircraft between France, Germany and Spain, has faltered as disagreements persist between France's Dassault Aviation and Airbus.
After talks with Merz earlier this month, French President Emmanuel Macron announced a last-ditch effort to try to save the project, in the form of a "mission" to mediate between the firms involved.
Merz said Friday that two mediators, one from France and one from Germany, had been tasked with making a proposal by the end of April.
"I will do everything in my power, and fight until the very last moment, to get joint European projects off the ground here, and above all German-French projects," Merz told a forum organised by the FAZ newspaper in Frankfurt.
But he also conceded that he had been "on the verge of pulling the plug, because I could hardly see any chance left.
"But then... I told myself that I really had to make another attempt now. I do not want to have to be told in five or 10 years' time that we should have tried again back then."
The Future Combat Air System (FCAS) programme was launched in 2017 to replace the Rafale jet and the Eurofighter planes used by Germany and Spain.
It is often seen as a bellwether of defence and security cooperation between France and Germany as the two EU powerhouses seek to put up a united front in the face of a hostile Russia and wavering US security commitment.
But bitter divisions between the rival firms have threatened to scupper it. This month Dassault accused Airbus of torpedoing the project, which Merz had in February signalled Berlin could abandon altogether.
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