MoD big guns have their sights set on Romania

Britain's largest defence companies are eyeing expansion opportunities in Romania, which is preparing to spend billions modernising its armed forces.

Britain's largest defence companies are eyeing expansion opportunities in Romania, which is preparing to spend billions modernising its armed forces.

Officials from the Ministry of Defence and the Department of Trade and Industry, as well as executives from weapons companies including BAE Systems, plan a major trade delegation to the country in March.

This follows the creation of a new post of First Secretary of Defence Supply at the British Embassy in Bucharest to promote arms trading.

The Defence Manufacturers Association, a trade organisation, wrote to its members last week urging them to register for the trade mission. It said there was "great potential" for co-operation with Romanian defence companies.

Romania, which joined Nato in March, is preparing to upgrade its armed forces, but the country's state-owned defence companies lack expertise in some sectors. Already, BAE Systems has sold Romania two refurbished Type 22 frigates.

But before British companies are offered arms deals in Romania they must sign up to "offset agreements". These require them to plough investment to the value of their contracts back into the country's economy. This could be done by offering Romanian defence companies a slice of British defence contracts, or by encouraging British companies from other sectors of the economy to invest in the country.