Thursday, February 19, 2009

Romania likely to shelve fighter jet purchase

BUCHAREST, Feb 19 (Reuters) - Romania is likely to shelve multibillion-euro plans to buy fighter planes to bring its air force up to NATO standards this year because of a lack of cash in its crisis-stricken budget, a senior coalition official said.

Bucharest came close to finalising a purchase plan last year with government ministers saying a decision was only "weeks away" in September, but it was put on hold after November's parliamentary election gave power to a new centre-left cabinet.

Five aircraft were in the running for the deal estimated by the previous centrist government to top 4 billion euros.

"Purchasing fighter jets this year is out of the question in such a difficult situation," Mircea Geoana, head of the coalition's Social Democrat party (PSD), told Reuters.

"We have some ongoing purchases that should be maintained, we have troops in Afghanistan, and I think investing in the capacity of our deployed troops overseas is the number one priority."

The PSD and its government partner, the Democrat-Liberal Party of Prime Minister Emil Boc, are due to debate their 2009 budget in parliament on Thursday.

They are struggling to contain the budget deficit within European Union rules, with revenues seen plunging.

Romania, the second-poorest EU member, has been a staunch ally of Washington's military operations in Iraq and Afghanistan. It joined NATO in 2004 and has agreed to replace its Soviet-made MiG-21s with new aircraft.

Its choices included: the F-16 built by Lockheed Martin Corp (LMT.N), the F-18 from Boeing Co (BA.N), the Rafale from France's Dassault (AVMD.PA), the Gripen from Sweden's SAAB (SAABb.ST) and the Eurofighter from EADS (EAD.PA). (Reporting by Justyna Pawlak, editing by Will Waterman)

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