By Tim Hepher and Kirsti Knolle
PARIS/VIENNA (Reuters) - A heated row broke out between Austria and Europe's largest aerospace company on Thursday as Airbus Chief Executive Tom Enders accused Vienna of playing politics with a fraud investigation and the government told him to calm down.
The exchange came 24 hours after Reuters first reported that Vienna prosecutors had opened a fraud investigation into German-born Enders, based on earlier complaints from the defence ministry over a $2 billion fighter deal in 2003.
In an emailed statement, Enders called the handling of allegations a "politically-motivated abuse of the legal system" and accused Austria's centrist coalition of using Airbus as an electoral "punching bag".
Vienna prosecutors launched the probe into Enders and other individuals as part of an investigation into whether Airbus and the Eurofighter consortium misled Austria about the price, deliverability and equipment of the 2003 deal.
The Eurofighter consortium comprises Airbus, Britain's BAE Systems and Italy's Leonardo, and all the companies have denied wrongdoing.
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"I want to clearly reiterate: from our point of view these allegations are unfounded and unsubstantiated," Enders said.
"The legal authorities will also come to this conclusion, but certainly only after the elections. Until then, this posturing will go on, because that is what it is all about: distracting the public until election day."
The centrist coalition government's term runs until autumn 2018 and Chancellor Christian Kern, a Social Democrat, has said he expects it to continue its work until then. But speculation persists that a snap election may be called beforehand.
LESS EMOTION
The defence ministry said Airbus should react less emotionally.
"The legal steps taken by the Austrian ministry of defence against Airbus are serious and have been substantiated by facts. Now it is solely for the independent judiciary to decide," a spokesman said.
"Airbus would be well advised not to fall back into past mistakes and to contribute to the clearing of the allegations with more seriousness and less emotion," he added.
Asked what mistakes he was referring to, he said the government had not received the impression that current Airbus management was interested in addressing the corruption claims.
Enders has launched a company-wide compliance drive that led to British and French bribery probes into its passenger jet sales and has pledged to continue the campaign.
Even after a decade, the fighter deal remains a politically sensitive subject in Austria, a neutral country with limited arms budget, and has drawn in all the main political parties.
A coalition of Austria's conservative People's Party and the far-right Freedom Party picked Eurofighter in 2003 over rival offers from Saab and Lockheed Martin, stressing the value of industrial deals for Austrian firms.
The Social Democrats, who had always criticised the deal, took control of the government in 2007 and a parliamentary inquiry was set up to determine whether bribes were paid to win the contract, while cutting it to 15 jets from 18.
Enders, 58, has clashed with European governments, notably Germany, over defence issues in the past, but the latest row marks an unusually direct confrontation with a state customer.
Calling the claims "cheap election rhetoric," he said: "We will not let part of the Austrian government use us as a punching bag that it can beat to score cheap political points".
The remarks appeared aimed at Defence Minister Hans Peter Doskozil, who made headlines in 2015 when as Burgenland police chief he handled the first big wave of Middle East refugees, and is now tipped by some to become the province's governor.
Defence industry officials accuse him of making capital out of the Airbus case to promote his political career. But Austrian officials insist the full story on the deal has yet to come out and are planning a second parliamentary probe within weeks.
(Additional reporting by Francois Murphy; Editing by Richard Balmforth and Mark Potter)