Italy's F-35 jet orders should be frozen, cut -Renzi party document

Wed Mar 19, 2014 3:14pm EDT

Related Topics

* Italy cut F-35 order by 30 pct 2 years ago

* Renzi said Sunday more cuts likely

* Military spending review due by end-year

By Steve Scherer and Antonella Cinelli

ROME, March 19 (Reuters) - Italy should put its order for 90 Lockheed Martin F-35 fighter jets on hold and probably cut it "significantly", lawmakers in Prime Minister Matteo Renzi's Democratic Party (PD) say, according to a party document.

The government has committed to spending an estimated 12 billion euros for the 90 radar-evading planes, but Renzi, who announced 10 billion euros ($13.91 billion) in income tax cuts last week, said on Sunday the order would be "revised" as he seeks to reduce public spending.

A PD party paper seen by Reuters, which was distributed to PD lawmakers on Wednesday by PD defence committee member Gian Piero Scanu, says that the contracts should be frozen and that "significant" cuts are probably needed.

The paper argues that the F-35 guaranteed Italy "no significant industrial gains" and that its cost "cannot co-exist with the needs of our public finances."

The 10-page document suggests increasing common European Union defence initiatives and cutting spending on armaments and technology by 1 billion euros a year over the next decade.

Italy's supreme defence council, including Renzi, ministers, the top military commander and President Giorgio Napolitano, agreed at a meeting on Wednesday that any cuts would not be made before a comprehensive review of the country's military needs, which is due to be completed by the end of this year. A statement issued after the meeting did not mention the fighter jet directly however.

The military review will be conducted by a committee of military and civilian specialists.

Italy cut its order for the planes by 30 percent two years ago to stem state expenditure during the euro zone debt crisis.

Italian media have said that several PD lawmakers have called for the order, which has been dogged by technical problems and cost overruns, to be halved.

Almost two-thirds of Italians deem the F-35 unnecessary, a recent poll showed, but it is supposed to replace the country's ageing fleet of fighter jets and further cuts could affect maintenance contracts held by the state-controlled defence group Finmeccanica.

There is "a perceptible unease among the public when faced with major military spending during a period characterized by serious economic and financial difficulties," the PD paper said.

The euro zone's third-biggest economy suffered nine consecutive quarters of recession from mid-2011 through the third quarter of last year, and unemployment is at its highest level since the 1970s.

Italy is also trying to keep the budget deficit within the EU's limit of 3 percent of output and reduce debt while lowering taxes as Renzi seeks to spur consumer spending and create jobs in the chronically sluggish economy. ($1 = 0.7189 Euros) (Editing by Susan Fenton)

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