Spain cancels military aircraft sale to Caracas

The Spanish government announced today that the EADS CASA sale to the Venezuelan regime has been canceled.

Spanish officials cited the company's lost profits, thanks to President Bush's January 2006 invocation of nonproliferation regulations that allow the US to veto the sale of foreign military equipment containing American-made parts. For the past 10 months, EADS CASA has been scrambling to circumvent the antiproliferation measure, trying to replace as many as four or five dozen components in the CN-235 and C-295 aircraft.

Critics denounced the sale, brokered by the Zapatero government last year, as a jobs program for the ruling Spanish Socialist Workers Party, whose stronghold is in Andalusia where the EADS CASA aircraft factories are located.

As Venezuelastan.com has reported earlier, Spanish officials had predicted that the sale would go through despite US objections and cost overruns. The Zapatero government needed the sale for its political base, and officials reasoned that EADS CASA could recoup the lost profits by selling the same planes to the Pentagon.