The Socialist government that came to power in Greece last October opened discussions with the Reagan administration this week on Greek plans to purchase a new generation of combat aircraft, and will shortly lay out its terms for the renegotiation of U.S. basing rights in Greece.
Describing these moves as potential steps in repairing the frayed U.S.-Greek military relationship, Undersecretary of Defense George Petsos said in an interview here that Prime Minister Andreas Papandreou expects to breathe new life into the suspended bases negotiations early next month by meeting with President Reagan in Bonn during the North Atlantic Treaty Organization summit conference and establishing the framework for new talks.
Petsos, the top political figure in a ministry nominally headed by Papandreou, said his government's decision on an arms purchase would depend not only on specific performance requirements but also "the general context of political relationships and assurances" between Greece and the supplying country. The purchase could cost billions of dollars when spare-parts contracts are added.
France is vigorously competing for the contract with its Mirage 2000 fighter aircraft, and Greece has also received an attractive coproduction offer from Panavia Aircraft, the Brussels-based firm that sells the Tornado multirole combat aircraft made by British, Italian and West German companies.
The American-manufactured aircraft discussed by Petsos and Deputy Defense Secretary Frank Carlucci this week were the F16 and F18.
The European manufacturers have reportedly offered offset packages that include the kind of aerospace production work and other technology transfer that Petsos said were vital to the Socialists' commitment to build up Greece's own armaments industry.
The initial purchase will be for a minimum order of 60 planes and spare parts, Petsos said.
"The purchase of this amount of equipment binds the countries involved together for a long time, and involves political assurances of a fundamental nature," Petsos said.
"We have to be sure in these negotiations that we overcome any problems that could result in the supplying country not being responsive to needs for future deliveries. We need to be sure the country is interested in helping us protect our borders and in maintaining the balance of forces in the Aegean Sea."
He suggested that the purchase would "be a matter of political decision, in which everything is in the balance," including how the negotiations on the U.S. air base outside Athens, the naval base on Crete and two smaller installations in Greece fare.
The combat aircraft decision is expected in July.
Petsos said that Papandreou would determine at his proposed meeting with Reagan whether to start the base negotiations "from zero" or to pick up the negotiations conducted between the United States and the New Democratic Party government that Papandreou's socialist Pasok party defeated last fall.