Source: FT.Com



Greece is preparing to scrap a planned ?10bn deal to buy 60 Eurofighter Typhoon combat jets for the Greek air force under a cost-cutting drive by the centre-right government which took office last March.


If approved by the Greek cabinet, the cancellation would deal a big blow to the four-nation Eurofighter consortium, comprising Germany, Italy, Spain and the UK, wiping out almost all its export order backlog.

Greek officials have signalled the expected decision to the consortium and said the country will launch a new tender at some point.

That would open the way for rival bids from Dassault of France, which already supplies the Greece with Mirage fighters, Lockheed Martin of the US which supplies the air force's F-16s, the Anglo-Swedish Saab-BAE Systems Gripen joint venture and Russia's Sukhoi.

?The government's intention is to reduce defence spending during its current term,? a government spokesman said yesterday. Greece's economic programme calls for spending of just ?6bn on defence over the next four years - compared with more than ?10bn between 2000 and 2004.

Greece completed the receipt of 60 F-16 jets last year which leaves the air force well enough equipped to meet current needs, defence analysts said.

Greece previously spent heavily on defence to offset a perceived threat from neighbouring Turkey over sovereignty in the Aegean. But a gradual rapprochement, reinforced by Greek backing for Turkey's bid for EU membership, has allowed Athens to cut military expenditure.

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