Defense needs extra €1 billion a year to pay off urgent arms bills

The Spanish Defense Ministry has asked for extra funding of up to one billion euros a year over the next two years to pay off its weapons and equipment bills, government officials confirmed Thursday.

The military has canceled or postponed purchases of new equipment because of the dire situation in the defense budget. Last year, Defense Minister Pedro Morenés convinced his fellow Cabinet member, finance chief Cristóbal Montoro, to grant a special 1.782-billion-euro loan to pay off "pending debts" stretching back to 2010. Defense officials are expected to ask the government for another allotment this year.

The ministry's annual budget is just under six billion euros - an amount too small to pay off bills to weapons and equipment manufacturers, said Pedro Argüelles, the secretary of state for defense.

Over the past few months, Argüelles has negotiated with private industry officials to reduce the military's payments or spread out the number of installments on what it owes.

In some cases, the Defense Ministry has been unable to cancel contracts signed with suppliers. Officials said that it is too late to send back the 235 Leopard combat vehicles that have already been delivered.

Spain cannot cancel its purchases of EF-2000 Eurofighters without facing severe penalties from its manufacturing partners: Germany, United Kingdom and Italy, officials explain. But the Defense Ministry has already announced that it will not sign a planned contract for 14 Eurofighter jets, and will also reduce its operational fleet by a yet-to-be-determined percentage.