Bulgarian PM: US wants 2.2BN leva for F-16 fighter jets

Written by on June 20, 2019 in Bulgaria - Comments Off on Bulgarian PM: US wants 2.2BN leva for F-16 fighter jets

The United States has proposed that Bulgaria pay 2.2 billion leva (about 1.12 billion euro) for the package of eight F-16 fighter jets, Bulgarian Prime Minister Boiko Borissov told journalists in Brussels on June 20.

Borissov was speaking three days after the US embassy in Sofia formally handed the proposed offer regarding the F-16s to Bulgaria’s Ministry of Defence.

The sum asked by the US for the package of eight F-16 Block 70 fighter aircraft is about 400 million leva more than the ceiling voted earlier by Bulgaria’s National Assembly. Should Bulgaria’s government want to exceed this ceiling, it would have to revert to Parliament for fresh consent.

Borissov said that he was in regular touch with Defence Minister Krassimir Karakachanov – “five times a day” – and they were working hard to conclude the deal.

Bulgaria’s Deputy Finance Minister Rositsa Velkova said that Bulgaria could negotiate a new government debt of up to a billion leva to pay for the aircraft.

Noting that negotiations on the acquisition of the F-16s were continuing, Velkova said that an amendment to the 2019 Budget Act could be tabled, by the end of July.

Velkova confirmed to journalists that the debt emission announced by Bulgaria’s Finance Ministry on June 19 was related to the F-16 deal. The announcement by the ministry had not stated the purpose of the debt, though there was media speculation that the two were linked.

The Finance Ministry statement said that on June 19, the ministry held two auctions for the sale of 10.5-year and 20-year-denominated government securities, maturing on December 21 2029 and June 21 2039.

Government securities totalling 300.6 million leva, including 200 million leva for the 10.5-year government securities and 100.6 million leva for the 20-year government securities, were offered successfully at the auctions, the Finance Ministry said.

The ministry said that there was “great interest” in the new government securities issues. It said that in regard to the 10.5 year government securities auction, banks acquired 43 per cent, pension and guarantee funds 34 per cent and insurance companies 23 per cent.

At the 20-year government securities auction, 49 per cent was acquired by insurance companies, 39 per cent by pension and guarantee funds, 10 per cent by banks and two per cent by investment intermediaries.

Bulgaria’s Finance Minister Vladislav Goranov said recently that the country had the money to pay for the F-16 deal one-off, rather than in instalments.

Bulgaria, a Nato member since 2004, has seen a succession of governments fail to complete a deal to acquire new multi-role fighter jets. At an earlier stage of the process, in 2017, an expert interdisciplinary committee ranked Sweden’s offer of Gripens as the optimum. This was overturned amid political manoeuvring.

In December 2018, a report by a political-military committee recommended choosing the US bid to supply F-16s. In January 2019, Bulgaria’s National Assembly voted to mandate the government to negotiate to acquire the Lockheed Martin-manufactured fighters.

Karakachanov repeatedly has said that price is a key consideration in agreeing a deal with the US. In early June 2019, he said that about two billion leva would be a reasonable price.

Bulgarian President Roumen Radev, a skilled fighter pilot who commanded the Air Force before being elected head of state, said earlier this week that he hoped that the combat capabilities of the fighter jets would not be cut back in a bid to bring down the agreed price.

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