Riga, 29 May 2010 - GREEK MILITARY SPENDING UNDER THE SPOTLIGHT AFTER ECONOMIC CRISIS

At a meeting of the Assembly’s Economics and Security Committee, British Member of Parliament Peter Bottomley (Conservative) enquired after the level of Greek military spending, and whether it was expected to be reduced following the 110-billion-euro bailout from the European Union and the International Monetary Fund.

“That’s a very strange part of the agreement that Greece has made with the EU and the IMF,” said Spyros Economides, senior lecturer on international relations at the London School of Economics, who had just concluded his presentation on the Greek financial crisis.

“There is a line in the agreement that stipulates that cuts will be made to military spending,” he said. “But nowhere have I seen the level of those cuts, or where they are going to come from.”

Economides pointed out that “for a long time, military spending was exempt from the kind of public scrutiny that all other sectors of the budget come under, and so we’re guessing” at the exact size of the Greek defence budget. It was probably “much higher” than recent estimates of slightly over 3 % of gross domestic product (GDP), he said.

Greek military spending has consistently been among the highest - as a proportion of GDP – in the Alliance for decades, largely in response to tensions with neighbour and longstanding rival Turkey.

But signs of a rapprochement could allow for a reduction in defence budgets, Turkish parliamentarian Yahya Dogan (Justice and Development Party) said at the committee meeting. Ankara’s new “zero problems” approach to foreign policy was bearing fruit, he said, after a high-level meeting in Athens last week appeared to be soothing tensions. 

There were unconfirmed reports of “some kind of mutual cut in defence spending across the Aegean,” from the meeting, said Economides.  However, no declarations were made on the longstanding issues of Cypriot sovereignty or the name of the Former Yugoslav Republic of Macedonia*, the two most significant bones of contention.

If Greece does reduce its military budget, the key would be where the cuts are made, Economides said.  Modernisation investments are “essential” for the Greek military, “especially in the land forces,” he said.  However, “cutting away the dead wood of the military apparatus” would be “not only possible, but welcome.”

“We’ve yet to see if those cuts would take place in existing armaments, which would be meaningless, or would they take place in future defence spending, either in terms of procurement or in maintaining a rather large and bloated defence sector.”

Economides recognized that several of the nations backing the bailout, including Germany, are also major suppliers to the Greek military. “This is a conundrum,” he said. “We call them offset agreements, but they are offside agreements.  They really undermine the whole process, if you give with one hand and take with the other in this kind of crisis.”

Around 340 delegates from allied and associated countries are attending the NATO Parliamentary Assembly’s spring session from May 28 to June 1. The full programme is available at http://www.nato-pa.int/default.asp?SHORTCUT=2014.

*Turkey recognises the Republic of Macedonia with its Constitutional name