ATHENS, Greece -- Greece rejected an offer to buy 40 F-16 jets from the U.S. government and will buy the aircraft directly from General Dyanmics Corp. in a deal worth at least $900 million, a Defense official said Wednesday.
In St. Louis, headquarters of General Dynamics, a spokesman said: 'We stand ready to carry out the F-16 program for the Hellenic air force in complete accordance with the agreements reached between the governments of Greece and the United States.'
An official of the Defense Ministry, asking to speak anonymously, said the Socialist government chose not to buy the F-16s from Washington because it fears the United States will seek a pledge to keep four U.S. naval and air bases in Greece past 1988.
A 1983 agreement between Greece and the United States specifies four U.S. naval and air bases can remain in Greece until 1988. At that time, Athens has said they must be dismantled.
'A government to government deal on the jets we will purchase means the Reagan administration could exploit the agreement and demand a pledge on the future of their bases here before the planes are delivered,' the official said.
Instead, said another official, Deputy Defense Minister Antonis Drosoyannis, 'we shall buy the jets directly from the U.S. manufacturing company' of General Dynamics Corp. of St. Louis, Miss. He said the 40 jets would cost $900 million.
U.S. Ambassador Robert Keeley reportedly met Prime Miniser Andreas Apandreou and recommended Greece buy the jets from the United States government 'to obtain a better credit deal.'
But Papandreou, who holds the Defense Ministry portfolio, decided against accepting Washington's bid, Deputy Defense Minister Drosoyannis said.
Drosoyannis said 'the total offset benefits agreed on between the government and General Dynamics will cover almost 100 percent of the cost of the 40 aircraft.'
Greece also is buying 40 French-made Mirage 2000 jets to modernize its air force and better confront what Athens sees as a threat from its NATO partner and neighbor Turkey.
'The offsets in the French deal would cover 80 percent of the cost of the aircraft in five three-year periods,' Drosoyannis said.