French Finance Ministry allows Egypt’s new Rafale fighter plane contract to progress

CAIRO: Egypt’s purchase of 12 Dassault Rafale fighter jets from France looks to be going ahead, allaying Cairo’s fears that the French Ministry for the Economy and Finance (Bercy) would block the deal.
During a three-day visit made by Egyptian President Abdel Fattah El-Sisi to Paris in October, French President Emmanuel Macron confirmed that he wanted to continue to develop the relationship between Egypt and France. As a result, the Élysée — the president’s office — reportedly asked Bercy to stop blocking negotiations for the sale of a dozen more fighters to Egypt.
Egypt has been modernizing its armed forces with support from France in recent years, beginning when Jean-Yves Le Drian was French minister of defense. Egypt spent around €7 billion with the French arms industry between 2014 and 2016, and currently has several contracts ongoing with French companies, including a military telecom satellite for its air force, in addition to the Rafale fighters, and four Gowind 2500 corvettes for its navy.
But Bercy was unwilling to allow Egypt to strike further deals with the French government, having underwritten the previous Rafale contract, which also included a FREMM multi-tasking frigate valued at more than 5.2 billion euros.
A letter of guarantee from the ministry to the Compagnie Française d’Assurance pour le Commerce (COFACE) financed the 2015 deal. The letter of guarantee was sent to French investment bank Bpifrance in early 2017.
La Tribune reported earlier this year that the letter of guarantee had been fully utilized and that the ministry did not wish to underwrite further loans for any transactions concluded with Egypt, whether military or civilian, despite the fact that Egypt had reportedly not missed any scheduled payments for the 2015 deal.
Macron’s desire to resolve the matter is based on guarantees. Egypt’s economy is expected to grow by 6 percent this year, according to analysts. Cairo has money to pay the bills. And from the end of this year, Egypt should be able to rely on gas production in the Mediterranean to satisfy domestic demand for several decades, with sufficient excess to export part of its production, significantly improving Egypt’s international financial status.
French daily La Tribune reported that Cairo has requested the same terms as those in contracts Egypt already signed for 24 of the planes in 2015.
French Foreign Minister Jean-Yves Le Drian delivered a new French proposal to El-Sisi at the World Youth Forum in Sharm El-Sheikh earlier this month, according to the newspaper.
With Bercy apparently no longer seeking to block the deal, an Egyptian delegation visited Paris last week to resume negotiations. There is a good chance that a contract will be signed before the end of the year.