Indebted Greece still faces arms purchases

Turkish fighter jets streak past remote Greek islands, shattering the calm of sleepy villages and alarming residents and beach-going visitors alike. Greek warplanes are scrambled to intercept them, fighting mock air battles over the Aegean Sea.

The violation of Greek airspace by Turkish warplanes is the most tangible — and frequent — indication of the long-standing tensions between neighbors Greece and Turkey. Although it has waned recently, it is this tension, which brought the two NATO allies to the brink of war three times since 1974, that Athens cites as the reason behind its massive military spending.

But under its current financial crisis, there are increasing calls for this spending to be slashed. Ironically, some of the countries which have provided rescue loans to prevent Athens from being unable to pay back its debts — and who have been pushing for Greece to implement harsh austerity measures — also want the country to buy their expensive warplanes and ships.

Athens came within a hair’s breadth of defaulting this month, thanks to a last minute injection of cash in the form of rescue loans extended by the International Monetary Fund and other EU countries that use the euro as their currency.

But the rescue wasn’t for free. It came at high interest rates of about 5 percent and only after the government pushed through harsh austerity measures that slash salaries and pensions, hike taxes and curb public spending.

With the crisis hitting pensioners and workers across the board, the country’s spending on its military often rankles.

Greece funnels billions of euros (dollars) into its military, spending more of its gross domestic product — 2.8 percent in 2008 — on it than any other European Union country, and second only in NATO to the United States. Turkey, by comparison according to the most recent NATO figures available, spent 1.8 percent of its GDP on military expenditure in 2008.

While military aircraft and ships have certain lifespans and need to be replaced before they become too costly to maintain or obsolete technologically, many question why a country as debt-ridden and financially troubled as Greece needs to spend billions of euros (dollars) on defense procurement.

“I honestly feel national shame each time I am forced to buy weapons we do not need — based on an objective and correct estimate of the dangers the world as it is holds for Greece,” Deputy Prime Minister Theodore Pangalos said earlier this month, during a much-touted visit to Athens by Turkish Prime Minister Recep Tayyip Erdogan. “I know that on the other side of the border too the Turks are also buying weapons they do not need … due to an imaginary threat that arises from a political confrontation, which can be solved and must be solved.”

French European parliament member Daniel Cohn-Bendit was even blunter, accusing the leaders of France and Germany of obliging Greece to maintain arms sales negotiations with their countries before agreeing to financial aid.

“For the past three months, there were several billions in arms contracts that we forced Greece to confirm: French frigates … helicopters, airplanes, German submarines. It’s hypocrisy,” Cohn-Bendit said at a news conference in Paris earlier this month.

“We want to make money … on the backs of the Greeks,” he said.

Both the French and German governments flatly denied the allegations.

Greek Defense Minister Evangelos Venizelos has said Greece aims to slash military operating costs by up to 25 percent in 2010 from the previous year, although that would not affect arms procurement programs.

The Turkish prime minister himself made overtures about whittling down the amount the two countries spend on the military.

“Both countries have very large defense budgets. … We must reduce these expenditures and use the money for other purposes,” Erdogan told Greek state television ahead of his visit.

But despite the warm words, no progress was made on issues of defense spending, a subject which wasn’t even on the agenda during Erdogan’s trip to Athens.

Periklis Zorzovilis, president of the Institute of Security and Defense Analysis in Athens, said that without a substantial change in stance from Turkey on its relations with Greece, including on flight violations in the Aegean, Greece can’t very well overhaul its own policy regarding its neighbor.

What Athens must do, however, is be more efficient in its arms programs, he noted.

Greece has said it needs 40 fighter jets, and both Germany and France are vying for the contract: Germany wants Greece to buy Eurofighter planes — made by a consortium of German, Italian, Spanish and British companies — while France is eager to sell Athens its Rafale fighter aircraft, produced by Dassault.

Germany is Greece’s largest supplier of arms, according to a report published by the Stockholm International Peace Research Institute in March, with Athens receiving 35 percent of the weapons it bought last year from there. Germany sent 13 percent of its arms exports to Greece, making Greece the second largest recipient behind Turkey, SIPRI said.

According to the German economy ministry’s most recent figures, published this month, all German commercial and army arms exports to Greece in 2008 were worth about euro199,6 million.

France is also in talks to sell six FREMM frigates for the Greek navy, which patrols the Aegean and also participates in anti-piracy operations as part of an international task force.

Others reportedly interested in the frigate program, worth an estimated euro2.7 billion (US$3.31 billion) include Germany, Spain and the Netherlands — all countries that extended rescue loans as part of Greece’s bailout this month.