The meeting between President Javier Milei and his French colleague Emmanuel Macron in the Casa Rosada earlier this month has resulted in an agreement that will see Argentina commit more than US$2.3 billion on defence spending.
Macron, who spent two days in Buenos Aires on November 16 and 17 before travelling to the G20 Leaders Summit in Brazil, oversaw the final details of the deal with Milei during their private meeting.
Under the deal, Argentina will acquire three submarines for its Navy at a cost of US$2 billion. The cash-strapped nation will also purchase four sea-faring vessels for the Coast Guard for an estimated outlay of 278 million de euros.
It’s not the first round of defence spending by Milei since taking office. Back in April, his administration agreed a separate deal with Denmark to acquire 24 F-16 fighter jets for a cost of some US$300 million.
Milei took office last December vowing to slash government spending and runaway inflation. Declaring “there is no money,” and taking a “chainsaw” approach to the state, he delivered Argentina its first fiscal surplus since 2008 in the first quarter of the year.
The first step towards the France deal was taken last month with a letter of intent signed by the Defence Ministries of both countries during Defence Minister Luis Petri’s visit to Paris. Petri signed the document together with his French counterpart Sébastien Lecornu.
During an interview with the La Nación newspaper, an unnamed leading Argentine Army authority detailed that “the letter of intent signed with the French authorities permits the beginning of the technical (operational, commercial and financial) meetings enabling us to arrive at the signature of the corresponding contract.”
The source, who was not named, said that “negotiations are very advanced and awaiting a formal proposal from the Naval Group, which we estímate will be before the year ends.”
Via a process requiring external credit for the multi-billion financing, the government now awaits the finalisation of a French shipyard’s offer for the purchase of three Scorpene submarines.
According to La Nación, which said it had accessed an international tender from the Security Ministry headed by Patricia Bullrich, the acquisition of four Offshore Patrol Vessels (OPVs) from the company Kership SAS is destined to beef up the naval structure of the Coast Guard and the tender has been pre-awarded.
Even if it still remains for President Milei to give his final approval of the preliminary agreement, the company has affirmed that it will take care of the financing of the purchase through banks, the media outlet reported.
– TIMES/PERFIL
