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SPANISH ARMS DEAL TO VENEZUELA PROCEEDS

25 Nov 05. The FT reported that Spanish military sales to Venezuela set to proceed. Spain’s largest sale of military equipment, to the Venezuelan government of President Hugo Chávez, looks likely to go ahead in spite of objections from the US.

Venezuelan officials are expecting José Bono, Spain’s defence minister, to visit Caracas next Monday to sign the contract, which includes the supply of 12 transport aircraft and eight ships. The aircraft would be supplied by EADS-Casa, the European consortium. The contract’s realisation would be an economic lifeline to the ailing Spanish government-controlled shipyard Navantia.

But the deal, which could be worth as much as €1.7bn ($2bn, £1.2bn), has prompted unease among US officials, who are already concerned about Mr Chávez’s expanding political influence across Latin America. Mr Chávez, who frequently claims that the US is plotting to “invade” the world’s fifth largest oil exporter, says the equipment is needed to replace ageing defensive capability and to help combat drug traffickers. On Wednesday, Eduardo Aguirre, the US ambassador to Madrid, said he hoped Spain would drop the controversial arms contract. “This immense sale could be a destabilising factor in the region,” he said. He added that Washington could block the arms sale as the equipment contained US-made instruments, requiring an export licence. Some of those parts could be replaced by European components, although analysts suggest such modifications would increase the cost. Alí Rodríguez, Venezuela’s foreign minister, called Mr Aguirre’s comments “typically imperialist”.
Venezuelan officials appear confident the contract will be sealed next week, if not directly with Mr Bono then with other Spanish and EADS officials. Mr Bono’s visit has not been confirmed.

Diplomatic relations between Madrid and Washington have been frosty since José Luis Rodríguez Zapatero, the prime minister, last year withdrew Spanish troops from Iraq. In an apparent effort to distance the Spanish government from the deal, Miguel Angel Moratinos, the foreign minister, yesterday said the arms contract was an agreement “between companies”.

Buoyed by an oil revenue bonanza, Venezuela is in the midst of a big arms procurement programme. It is taking delivery of Russian helicopters, has discussed buying Mig-29 fighter aircraft and next month is expected to receive the first batch of 100,000 Kalashnikov rifles.

Neighbouring Colombia, a close US ally, has also voiced concern about Mr Chávez’s arms drive. The subject was likely to have been raised by President Alvaro Uribe yesterday when he met Mr Chávez in Venezuela.

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