Lula and Sarkozy also signed agreements for bilateral development of submarines and helicopters.
The official note also informs that the French leader expressed his country's intention of acquiring 10 units of the military cargo plane KC-390 to be manufactured by Brazilian aircraft maker Embraer. The French are supposed to help in the development of such airplane.
The Rafale, from the French company Dassault, was in a tough competition with Sweden Saab's Gripen and US Boeing's F/A18 Super Hornet. This is a US$ 4 billion deal and it's expected that Brazil will have its final word on the purchase by the end of October.Â
In a concession unprecedented for Paris, the French government has accepted to offer Brazil technological knowledge in exchange for acquiring hardware from France. Dassault also counted on the chemistry between Lula and Sarkozy to help to close the deal.
Lula justified the acquisition of new military equipment by reminding his fellow citizens that the country needs a strong deterrent to defend against covetous foreign hands its new-found oil riches, deep in the ocean, in the earth's pre-salt layer.
"We always have to think that oil has been the cause of many wars and conflicts and we don't want any part of this. We are working under the assumption that in the next 15, 20 years we will turn into a big world power."
The military cooperation agreement between the two presidents should make Brazil the "leading naval power" in Latin America according to the Brazilian daily O Estado de S. Paulo.
"Probably this is the beginning, but nobody is willing to admit it because it could have diplomatic consequences, but it's the path that will give Brazil the most naval firepower in Latinamerica," underlined São Paulo's most authoritative daily.
"The idea is to have, above all, a dissuasive power superior to that of neighbors", adds the publication.
President Sarkozy arrived Sunday in Brazilian capital Brasília together with eight ministers for the signing of defense cooperation agreements totaling 12.5 billion US dollars.
In an unusual gesture, President Lula was personally at the airport to receive the numerous French delegation and his peer Sarkozy.
Most of the funds, to be financed by a European consortium of banks headed by BNP Paribas, will be invested in the purchase of four conventional Scorpene submarines and one nuclear powered all to be built in Brazil.
The transfer of technology is at the heart of the agreement.
At the grand parade Monday in Brasília, President Sarkozy was the guest of honor (a similar privilege granted to President Lula in Paris on the Day of the Bastille, July 14th last year) at the grand military parade.
That same day in Rio do Janeiro the Brazilian Navy will hold a similar display in the sea along the coast of the "marvelous city" where the shipyard for the submarines will be located as well as a naval base.
"I'm convinced that the visit of President Sarkozy will consolidate the strategic association between France and Brazil," forecasted President Lula in interviews with the French press.
O Globo, a daily newspaper from Rio de Janeiro published that these purchases are the first step for the "re-equipment of Brazilian Armed Forces," which during the last 33 years have had no major investments.
"In the mid term Brazil will have a fleet of 10 to 12 submarines and later probably also French frigates,", added the paper.
Guaranteeing the "defense of the sea is not only important for Brazil because of its immense natural resources such as offshore oil, but also because 85% of its foreign trade is maritime".
Although Brazilian society is still a bit reticent to discuss defense issues and expenditure because of the last military dictatorship which lasted two decades, (1964/1985) last year President Lula launched the new National Strategy Defense which was supported by the political establishment
The 12 billion US dollars agreement is basically earmarked 9.5 billion for the navy but also included 50 transport-helicopters, EC-725, French model to be supplied between 2010 and 2016 and built by Brazil's Helibras at its plant in Belo Horizonte and Europe's Eurocopter.
Bzz/Mercopress