Gripen NG – Sweden doesnt confirm interest reduction on acquisition contract

Pedro Paulo Rezende
DefesaNet Special

A Swedish source denied today (26th) that any deal has been made between the Brazilian government and the SAAB Group for lower interest rates on the contract signed with the Brazilian Air Force Command through the Combat Aircraft Program Committee (COPAC, in Portuguese) for the acquisition of 36 Gripen E/F fighter jets.

Both parties didn’t come to an understanding for a simple reason: it’s not in the manufacturer’s power to negotiate financial terms on international deals. That’s something for the Swedish Credit Export Corporation (SEK) to do. The SEK is an agency formed by the government and companies from the Nordic nation

According to information gathered by the DefesaNet’s team, there’s little room for financial maneuvers. SEK follows credit granting parameters established by the Europe Central Bank, the Organization for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO).

These rules fix prices and interest rates at the moment contracts are signed. And there is another issue: 60% of Sweden’s GDP comes from exports; therefore, negotiations on the matter are not seen with good eyes by the Swedish Parliament and economic authorities. And both institutions are responsible by approving the financing rules applied by SEK.

Another topic must be negotiated as well. The pre-contract, signed in October 2014, two days before the second term of Brazilian presidential elections, stated that the contract itself must be signed until june 24^th 2015 – last Wednesday. In order to set a new deadline, according to report by O Estado de S. Paulo, President Dilma Rousseff tried to come to terms with the Swedish government.

On June 23rd, she handled the issue in a phone call with Swedish Prime-Minister, Stefan Löfven, at the time; the President also stated the Brazilian government did wish to review the interest rates on the Gripen contract.

The idea came from Treasury Minister Joaquim Levy. He argues that lowering the rates will sabe around RS$ 1 billion in 25 years. The Minister also wants to use the Gripen contract as standards to renegotiate other international deals already signed by Brazil.

On June 16th a very tense meeting/lunch took place at the Swedish embassy in Paris. The guests were the Brazilian Air Force Commander, Lieutenant-Brigadier Nivaldo Rossato, SAAB’s President, Håkan Buskhe and the Commander of the Swedish Air Force, Major-General Micael Bydén. Rossato was in Paris for the Air Show at the Le Bourget Airport.

Commander Bydén had previously expressed important issues regarding relevant themes for Brasil, and appeared to be displeased that Commander Rossato did not attend the SwAF pre-Le Bourget event.

Notes – A report by Valor Econômico issued today (26th) mentions that the Brazilian government has ten more days to sign the Gripen contract. The source of the information is cited to be the President of th Combat Aircraft Program Committee (COPAC), Brigadier Roberto Chã.

Em uma frase fica caracterizado o "Lobby de Presão" da COPAC para o andamento do atual acordo:

In one passage, the report describes a “Pressure Lobby” from COPAC for the deal to move forward: “COPAC’s President warned about the importance of settling the contract financing issue before August. Otherwise, there will be damages to the technology transfer process from the fighter jet’s manufacturer to all Brazilian companies and institutions involved”.

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