Greek Military Armed and Financially Dangerous

Despite its financial crisis, Greece is refusing to lower its generous military spending. That has delighted German defense contractors, who have long been suppliers to Athens.
Will the Greek military's thirst for new arms ever be quenched?

Heavy tanks rolled past the parliament building in Athens. Fighter jets flew over the Acropolis and painted white vapor trails across the sky. It was March 25, a Greek national holiday, and the country’s military was putting on a big parade, meant to recall the uprising against the Ottomans in 1821.

Millions of euros’ worth of military equipment rumbled through the city, including the pride of the Greek military: German Leopard 2 tanks, known worldwide as the best of their kind – and the most expensive.

In recent decades, the Greek government has not skimped on its military, which has played an important, even dominant role in the country's post-war history. Measured against GDP, no E.U. member country has spent more on new weapons over the past few years. And no country has kept a bigger army per head of the population.

The Bonn International Center for Conversion has listed Greece among the most militarized countries since 1990. It was ranked ninth in 2014, ahead of all other NATO members - despite Greece’s financial crisis.

“Athens’ high arms expenditures and extensive weapons purchases over the past years have contributed to the desolate budget situation,” according to BICC.

The figures show that Greece invested nearly €6 billion ($6.6 billion) in its military in 2000. Eight years later, the figure was €8.6 billion. In 2009, Europe’s NATO member countries spent an average of 1.7 percent of their GDPs on defense – Greece was at 3.1 percent. The country was among the world’s five biggest arms importers between 2005 and 2009, according to the Stockholm International Peace Research Institute.

Athens’ high arms expenditures and extensive weapons purchases over the past years have contributed to the desolate budget situation. Report, Bonn International Center for Conversion

In May 2010, Greece had to be saved from financial ruin, and eventually received a loan package of hundreds of billions of euros. The government used some of this money to buy more weapons.

Now, even more cash is on the table. The Greek government, led by Alexis Tsipras, has accepted a number of conditions connected to the deal. Greece must save money. The value-added tax has been increased, pension payments are to decrease, state-owned companies are to be privatized, and corruption weeded out. But only marginal consideration has been given to the country’s huge military expenditures. The army remains sacrosanct.

Politicians and others in Germany have often harshly criticized Mr. Tsipras. But the critics seem to forget that debt-ridden Greece until recently was ordering armaments worth billions of euros from Germany. Between 2001 and 2010, Greece was the most important customer for the German defense industry. During this period,  Greece bought 15 percent of all of Germany’s exports, SIPRI estimates.

Video: Greece's military parade in March.

 

Greece’s armed forces have nearly 1,000 German-developed model Leopard 1 and 2 combat tanks. Including models from other countries, Greece has 1,622 tanks. The German military has 240 Leopard tanks in service. (That number is to increase by around 90 because of the crisis in Ukraine.) While the German armed forces have been shrinking and phasing out military equipment for years, Greece has gone the other way. No other E.U. country has more combat tanks today.

In 2003, Greece’s defense ministry ordered 170 Leopard tanks from Germany’s Krauss-Maffei Wegmann company. The Munich-based company is said to have made €1.7 billion from the deal.

Germany’s biggest defense company, Rheinmetall, has also had business results from Greece. The Düsseldorf-based company provided fire-command systems for the Leopards. The company sold tank ammunition worth €52 million to Greece last year. Previously, a Rheinmetall subsidiary sold an air defense system to the Greek military. The deal was riddled with bribe money, and the German firm recently had to cough up fines and skim excess profits to the order of €37 million.

German and Greek prosecutors are also investigating employees from companies such as Krauss-Maffei Wegmann and Atlas Elektronik. A top official in Athens has admitted to having pocketed millions from representatives of German firms. A former Greek defense minister had already been handed a long prison sentence for corruption.

Greece, which has been purchasing a good share of its armaments abroad since World War II, has a long history of importing weapons from Germany. The country’s own arms industry has been of no great significance.

At the beginning of the Cold War, the majority of Greece’s tanks and aircraft came from the United States. Greece joined NATO in 1952, and U.S. experts helped to build up the country’s armed forces. In the 1960s, friction flared between Greece and fellow NATO member Turkey. The government in Athens aimed to achieve “military balance” with its larger neighbor, in part by buying weapons from West Germany.

Conflict flamed up again and again between the two arch-enemies. Greece instigated a war over the island of Crete. In 1974, it was about Cyprus, which the Greek military dictatorship had wanted to annex. Instead, Turkey invaded the predominantly Turkish north of Cyprus, and war was just barely averted. The two countries had an arms race, and German weapons manufacturers supplied both sides.

 

Greece's military spending is tanking along despite its budgetary constraints.

 

Both Turkey and Greece purchased submarines in Germany. Between 1971 and 1980, Greece ordered eight subs from German firms, four of them from Howaldtswerke-Deutsche Werft. More of these high-tech weapons systems were added later. In 2008, Greece ordered four Model 214 subs – a deal worth hundreds of millions of euros.

But by then it became apparent that Greece had overextended itself. The parent company in the submarine deal, ThyssenKrupp,  lamented “outstanding payments totaling €524 million.”

In March 2010, the company and country reached a compromise. Athens ordered two more subs, and in return the previously agreed upon modernization of older models was scrapped. All told, that made costs increase to €3.6 billion, according to the BICC. ThyssenKrupp Marine Systems wouldn’t comment.

The Greek Ministry of Defense also bought weapons for its army directly from the German armed forces.

The Greek defense ministry also bought weapons directly from Germany’s armed forces. The deals included used tanks that could be bought cheap and then overhauled and modernized by German private firms for not small sums. That was the way more Leopard 1 tanks came to Greece in 1998, model Biber armored bridge layers in 2005, and 223 model M109 tank howitzers in 2010.

Despite the numerous purchases abroad, the Greek governments of the past decades always found new “defense gaps.” Kostas Simitis, who was prime minister from 1996 to 2004, liked to boast that he had “set in motion the biggest arms program in the history of modern Greece.” The arms procurement totaled €25 billion. His successor, Kostas Karamanlis, tried to go one better. He planned €26.7 billion in defense purchases for the years 2006-16.

And then came the financial crisis that continues today.

Greece’s defense purchases in Germany continue. The leftist Die Linke party in the German legislature is leveling harsh criticism. BICC experts are also saying that as long as Greece’s finances are in a shambles and the nation is relying on E.U. aid, the German government should not “issue any export permits or export guarantees for new defense projects such as submarines, fighter jets, etc.” The financial situation in Greece has to play a role in the authorization process, the experts said.

The German government defends itself by citing “security policy” requirements: Greece is an ally, and defense exports to NATO members are generally not subject to “any restriction.”

The Greek military is supposed to do its bit in the most recent round of cost-cutting. The ruling Syriza government wants to spend about €200 million less for armaments. Initially, a cut-back of twice that much was planned. But defense ministry officials objected. If the military has to save €400 million, the officials said, there won’t be any money for new boots and Greek soldiers will have to fight in their socks.

 

This article first appeared in Die Zeit. To contact the author: [email protected]