Ministers approve NIS 9 billion purchase of aircraft, arms from US

Finance Ministry opposes plan over budgetary issues but is overruled; deal will include jet fighters, troop-carrying choppers, refueling planes and thousands of bombs

A new F-35 fighter jet at the Nevatim Air Base in southern Israel, on July 14, 2019. (Israel Defense Forces)
A new F-35 fighter jet at the Nevatim Air Base in southern Israel, on July 14, 2019. (Israel Defense Forces)

After a three-year delay, a ministerial committee on Sunday approved a major arms deal with the US to supply the Israeli Air Force with numerous aircraft and munitions.

The deal will allow the military to purchase F-35 and F-15 fighter jets, heavy transport helicopters, refueling planes and other equipment deemed critical by the military, like interceptor missiles and advanced bombs for aircraft, to the tune of roughly NIS 9 billion ($2.74 billion).

The funding will come from the $3.8 billion of military aid that the United States gives to Israel each year, but as the payment will have to come up front, the deal will require major loans from American banks, which will cost the Israeli government hundreds of millions of shekels in interest.

The approval of this plan was a significant victory for Defense Minister Benny Gantz, whose ministry backed this option, as opposed to other proposals that involved only purchasing equipment that the government could afford without loans.

The Finance Ministry in particular had opposed this financing plan, citing budgetary concerns, but was overruled. In light of this opposition, Attorney General Avichai Mandelblit also objected to the IDF taking a loan from abroad, as such moves legally require the approval of the Finance Ministry’s accountant general, but he did not veto the cabinet’s decision.

According to Channel 12 News, Washington had set a deadline for Israel to approve the deal in the next two weeks or lose its priority in American assembly lines, which could have delayed the deal by some two years.

The Defense Ministry maintains that the interest payments could be paid for from future American military aid, assuming Washington continues to provide it.

Defense Minister Benny Gantz, left, welcomes Maj. Gen. (res.) Amir Eshel into the position of director-general of the Defense Ministry at its Tel Aviv headquarters on May 31, 2020. (Ariel Hermoni/Defense Ministry)

“The bottom line is that it’s either paying about NIS 8 billion right here and now or paying additional interest… in another decade, which the Defense Ministry will pay for with dollars from the aid budget,” Defense Ministry Director General Amir Eshel told reporters in November.

“It doesn’t add up to me that the State of Israel right now — at the peak of a budgetary deficit — would take NIS 8 billion and put it in America. There are other techniques to solve this,” Eshel said.

Eshel also noted that such arrangements have been used in the past by Israel to purchase costly military equipment, including the IDF’s current fleet of F-35 fighter jets and roughly 100 of its F-15s.

The IDF and Defense Ministry have stressed the importance of approving this funding arrangement in order to both replace aging equipment and to shore up Israel’s military advantage in the region.

For example, the military has long warned that its 50-year-old-plus fleet of Sikorsky CH-53 “Yasur” transport helicopters were woefully outdated and potentially dangerous to operate due to their age.

“No other military in the world flies aircraft this old,” Eshel said in November.

However, the budgetary approval is only one step toward the ultimate purchase of the aircraft and bombs.

The government has yet to formally decide which heavy transport helicopters to purchase from the United States, nor has it officially announced how many F-35 fighter jets and how many upgraded F-15s it intends to buy.

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