Venezuelanalysis.com (Alex Holland): EADS-CASA, The Spanish company contracted to provide Venezuela with 12 military planes, has been reported saying that unless the US lifts its veto on the sale of the planes, it will not be able to send them to Venezuela.

The deal for the unarmed C-295 transport planes was signed in Venezuela in November 2005.

The US was able to veto the sale because the Spanish-made planes have parts that use US technology. On January 31, the Spanish Deputy Primer Minister Maria Teresa Fernandez de la Vega said, EADS-CASA was trying to find, “mechanisms of substitution,” for the parts needed.

Now the Spanish newspaper ABC News reported an “unnamed source” in EADS-CASA that says changing the parts would be technologically, “unviable.” According to the same source, this is because the structure of the planes would have to be changed if the US technology was replaced.

In November 2005, another unnamed source from EADS-CASA, this time speaking with the Spanish newspaper El Pais, had said the added cost of replacing the US parts would make the deal unprofitable. At that time it did not say it would be technologically impossible.

Venezuelan President Hugo Chavez said in a recent speech that if Spain could not confirm its completion of the contract soon, Venezuela might buy the planes from China or Russia. Neither the Venezuelan Ministry of Defense or EADS-CASA were available to confirm what the status of the deal is now.

Diego Quintana from the Spanish Embassy in Caracas said “we cannot speak on the part of EADS-CASA as it is an independent company. Obviously the deal is much more difficult without the US parts and we are talking with the US to allow for their use.” The deal is estimated to be worth US$1.7 billion to EADS-CASA and would create hundreds of jobs in Spain.

The US has said it is blocking the sale because it feels Venezuela is a “destabilizing force in the region.” The US State department said military sales to Venezuela could create an arms race in Latin America. The US has been accused of hypocrisy over this as it sent $190 billion of military aid to the continent last year.

• Relations between the two countries have been bad since 2002 when the US failed to share advance knowledge of a coup against Chavez with the Venezuelan President. Since then Chavez has repeatedly accused the US of backing efforts to destabilize his government.

Last year the US stopped Israel from repairing Venezuela’s F16 fighter aircraft. The Brazilian government complained in January of this year it was feeling US pressure not to sell Super Tucano ground attack planes to Venezuela.

This pressure has not yet become a formal US veto.

Spanish Arms Manufacturer Says It Cannot Export Planes to Venezuela