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Last Updated: Friday, 18 April, 2003, 09:41 GMT 10:41 UK
Poland buys US fighter jets
US Airforce F-16 aircraft
Poland needs the F-16s to meet its Nato commitments
Poland has signed a multi-billion dollar contract to buy 48 American fighter planes.

It is the biggest defence contract signed by a former Soviet bloc country since the end of the Cold War.

The purchase of the US Lockheed Martin F-16s was agreed in the presence of the country's Prime Minister Leszek Miller in the town of Deblin, 100 kilometres (60 miles) south of Warsaw, on Friday.

The $3.5bn deal reportedly involves a compensatory investment programme and loans for Poland worth over $12bn.

"It's the contract of the century," said Polish Defence Minister Jerzy Szmajdzinski at the signing ceremony.

Nato commitments

The French AFP news agency says he described the deal as a "strengthening of strategic links with the US".

The package underlines the strong ties that exist between the US and Poland, reinforced in recent months by Warsaw's support for the war in Iraq.

Poland needs the planes to meet the standards of Nato, which it joined in 1999.

Apart from the aircraft, the contract covers spare engines, missiles and bombs - as well as training for Polish pilots. Deliveries of the planes are to start in 2006.

US and European defence companies competed heavily for the contract.

The British-Swedish consortium BAE Systems-Saab which produces the Jas-39 Gripen, and France's Dassault Aviation which makes Mirage 2000-5 also took part in the bidding.

Investments confirmed on Friday included a project by General Motors to upgrade its Polish plant, which GM earlier said would raise annual exports by $200m to about $600m, reports Reuters.

Polish software firms Computerland and Prokom are also part of the offset deal, but details and actual investment figures have not yet been made public.

Political leaders in Poland are hoping the deals will create jobs and boost the country's sluggish economy, which grew by only 1% last year.

Lockheed profits take off
25 Oct 02  |  Business
Country profile: Poland
08 Apr 03  |  Country profiles

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