* Deal should be approved by parliament next week
* Bulgaria is a staunch Washington ally (.)
By Angel Krasimirov
SOFIA, July 10 (Reuters) - Bulgaria's government agreed with the United States on Wednesday to buy eight new Lockheed Martin F-16 fighters for its air force for $1.256 billion, the defence ministry said, its biggest military purchase since the fall of Communism.
The Balkan country, which is а NATO member and a staunch Washington ally, is looking to replace its ageing Soviet-made MiG-29s and improve compliance with NATO standards.
The decision needs parliamentary approval before it can be completed. Parliament is expected to endorse the deal in a vote that will probably take place next week.
Defence Minister Krasimir Karakachanov, who is also deputy prime minister, said there was an option for the U.S. Congress to reduce the price by $60 million because of the cost of adapting a Bulgarian air base to the F-16's requirements.
The price exceeds an initial cap of 1.8 billion levs ($1.03 billion) approved by parliament and will raise the Black Sea state's defence spending from about 1.5% of its 2018 economic output.
Last month, the finance ministry said that the government may propose a revision to this year's budget to fund the deal. The ministry has already sold 300 million levs in bonds on the domestic market a few weeks ago to fund the acquisition.
"A long-standing Air Force dream happened at last," Deputy Defence Minister Atanas Zapryanov told reporters. "It puts them on an equal footing with our NATO partners. Our Air Force will have confidence that they have something as contemporary and up-to-date as our colleagues."
Zapryanov said that six single-seat and two two-seat F-16s would be delivered by 2023.
The deal has four key elements – delivery of the aircraft, delivery of their combat equipment, supply of simulators and logistics equipment. Training for pilots and ground crew was also included in the price.
Last month, Prime Minister Boyko Borissov said that Bulgaria could help protect its southwestern neighbour North Macedonia's airspace if it completes the deal. North Macedonia hopes to become NATO's 30th member next year.
Wednesday's approval comes following a long-running saga that has seen a succession of Bulgarian governments fail to make a decision on which warplane to pick.
Bulgaria joined NATO in 2004 and the European Union three years later. ($1 = 1.7433 leva) (Reporting by Angel Krasimirov; editing by Larry King)