Arms industry: Greece still splashes out billions on defence
11 January 2012
Frigates, tanks and submarines: Greece may be teetering on the brink, but the bite of austerity hasn’t come near its military. And Germany is profiting from it. Excerpts.
The man who goes in and out of Greece's Defence Ministry has the ministry’s wish list in his head: up to 60 fighter aircraft of the Eurofighter class, for perhaps €3.9 billion. French frigates for over €4 billion, patrol boats for €400 million.
Such is the price of the much-needed modernisation of the existing Greek navy. But we still have to include some ammunition for the Leopard tanks, and besides that, two American Apache helicopters need replacing. Oh, and they would like to buy some German U-boats, for €2 billion.
What the man reveals in an Athens café sounds absurd. A state on the edge of bankruptcy, propped up by billions of euros from the European Union, wants to buy up armaments wholesale? The man in the café is frequently seen in photos next to the Minister of Defence or army generals, and he’s often on to the phone to them too.
He’s a man who knows his way around. In his own opinion, the arms purchases currently can’t be done. But that could soon change, he says. "If Greece gets the next tranche of the bailout in March, expected to be €80 billion, there is a real opportunity to sign some new arms contracts."
It’s truly incredible. Whether Greece stays in the eurozone or goes back to the drachma will be decided this spring. On the morning when internal matters are being spoken of so frankly in the café, doctors in Athens hospitals are handling only emergencies, bus drivers are on strike, schools are still short of textbooks and thousands of state employees are demonstrating against their dismissal.
Merkel and Sarkozy ask Greece to sign new arms orders
The new austerity programme that Greece's government has announced leaves hardly a Greek unscathed. Unless, that is, he works for the military or for the armaments industry.
In 2010 Greece’s budget for the military was almost seven billion euros. That is about three percent of its economic output, a figure surpassed among NATO countries only by the United States. The Ministry of Defence did, however, cut its arms procurement in 2011 by €500 million. But all this will mean, believes an arms trade expert, is that future needs will be all the higher.
Among Greece's EU partners, only a few are calling publicly for the Greek rearmament programme to stop at once and for a long time into the future. One is Daniel Cohn-Bendit, leader of the Greens in the European Parliament. Europe’s hesitation, he believes, masks well-entrenched economic interests.
The main beneficiary of the Greek armament programme in Europe turns out to be its savings champion, Germany. According to the just-released Rüstungsexportbericht 2010 (2010 Arms Exports Report) the Greeks are, after the Portuguese – another state teetering on the verge of bankruptcy – the biggest customers for German armaments.
Spanish and Greek newspapers even spread a rumour that Angela Merkel and French President Nicolas Sarkozy reminded former Prime Minister of Greece George Papandreou during a summit meeting at the end of October to honour existing arms orders, and even sign new ones.
Greek military sector promises security and jobs
How does that square up? Not in the least, says defence expert Hilmar Linnenkamp. "It is totally irresponsible, in the midst of Greece's severe economic crisis, to bring up the the Eurofighter issue [an order of 90 Eurofighters placed in 1999]." But it's not just about the Eurofighter. The latest Arms Export Report reveals that in 2010 Greece imported exactly 223 howitzers and a submarine from Germany. The total value of the arms sales was €403 million, which contributed greatly to the explosion of Greece's public debt.
Dimitris Droutsas is one of the few Greeks who speak openly about these figures. Until June 2011 he was Greece’s foreign minister. "We didn’t spend so much money on defence for the fun of it," he says. Greece’s external borders must be strengthened against the waves of migration from North Africa and Asia, and almost daily there are conflicts with Turkey. "As Foreign Minister I got a message every afternoon from the Defence Department listing Turkish violations of our airspace."
Greece has also been watching with some concern the increasing activity of the Turkish navy in the Aegean Sea. 35 years ago, they watched the Turks invade Cyprus. Since then, Greece has lived in a state of anxiety. “Whether we like it or not, Greece is forced to have a strong military.”
Greeks like Droutsas need fear no resistance from Greece’s own population. The Greek military sector promises the people security – and jobs. In a country with no significant industry of its own, that is worth a great deal. German defence companies recognised this early on and have grown tightly intertwined with Greek companies.
Current defence spending up 18.2 percent
The pressure from beyond Greece’s borders to wrap up the rearmament programme only materialised recently, which is why the defence budget has hardly been touched by the austerity measures overseen by the troika of experts from the International Monetary Fund, the European Central Bank and the EU Commission.
In 2010 the military spending budget should have been cut by only 0.2 percent of economic output, or by €457 million. That sounds like a lot, but the same document proposed to cut back on social spending by €1.8 billion. In 2011, according to the EU Commission, Greece was to strive for “cutbacks in defence spending”. The Commission, though, didn’t make it explicit.
The Greek Parliament was quick to exploit this freedom. The 2012 budget proposes cuts to the social budget of another nine percent, or about €2 billion. The contributions to NATO, on the other hand, are expected to rise by 50 percent, to €60 million, and current defence spending by up to €200 million, to €1.3 billion – an increase of 18.2 percent.
And the German Federal Government’s stance? According to a spokesman, responding to an enquiry, the German government supports "the policy of consolidation of the Greek Prime Minister Papademos. The government’s guiding assumption is that the Greek government will, on its own responsibility, contemplate meaningful cuts in military spending.” At the same time, however, the spokesperson alludes to defaults on arms deals. “The federal government has expressed its fundamental expectation that contracts will be fulfilled."
Translated from the German by Anton Baer