EADS-CASA Cancels Military Plane Deal

The Associated Press
Thursday, October 19, 2006; 12:12 AM

MADRID, Spain -- A Spanish company dropped a plan to sell 12 military transport planes to Venezuela that was opposed by the U.S., the Spanish foreign minister said Wednesday.

EADS-Casa, an affiliate of a European aerospace consortium, had been trying to get around U.S. objections to including American-made technology in the aircraft by substituting these parts with ones available on the international market.

But this idea turned out to be so expensive as to be commercially unfeasible, Miguel Angel Moratinos told a breakfast meeting of politicians and journalists.

"The financial effort needed to adapt to the technological requirements of the United States was not worth it," Moratinos said.

The planes were part of a broader package of military sales to Venezuela that the U.S. government has opposed as part of its opposition to President Hugo Chavez, whom it has called a destabilizing force in Latin America.

Caracas and Madrid agreed in November on the sale, which also calls for eight patrol boats to be built for Venezuela.

The total price tag was originally estimated at more than $2.2 billion, making it Spain's largest-ever defense deal.

The U.S. government, which has repeatedly clashed with the leftist Chavez, had said it would not permit the sale if the planes included American parts _ forcing EADS-Casa to search on the international market for replacements.

Venezuela said later that it was considering buying military transport planes from Russia after the Spanish plan fell through.

Gen. Alberto Muller said Venezuela began looking into buying transport planes from Moscow after Washington blocked the deal with Spain by forbidding the use of any U.S.-made components in the planes.

"Acquiring them from Russia has been studied," Gen. Alberto Muller, a military adviser to Chavez, told The Associated Press in a telephone interview. "It's most likely because we already have negotiations under way with them" on the final details of a separate deal for the transfer of 24 Sukhoi Su-30 fighter jets and 53 military helicopters.

Defense Ministry officials weren't immediately available to confirm the account by Muller, who is not an official spokesman for the armed forces.

Muller described Spain's decision as "unilateral" and said: "This is the product of pressure applied by the United States."

Venezuelan officials have accused the U.S. in the past of putting pressure on Brazil to halt a sale of at least 24 Super Tucano planes, and also on Israel to block sales of parts for Venezuela's fleet of U.S.-made F-16 jets.

© 2006 The Associated Press