ROME
— As politicians and finance ministers work to keep crisis-hit Greece
within the Euro-zone, analysts have warned of far-reaching consequences
for security in the Mediterranean if the country is cut loose.
After
months of wrangling with creditors, the debt-saddled country appeared
close to tumbling out of the euro zone last week after Greeks voted to
refuse a package of cuts and tax hikes proposed by the European Union.
In return for the cuts, the EU was offering a new bailout to keep Greece from defaulting on its debt.
But
as the week wore on, and as European politicians refused to budge,
Greek Prime Minister Alexis Tsipras appeared to buckle under pressure
and come back to the negotiating table, offering to make cuts to public
spending.
The deal, which was due to be discussed by European
leaders July 12, involves a €100 million (US $110.5 million) cut in
defense spending this year and a €200 million cut in 2016, less than the
€400 million proposed by the EU.
Ahead of the announcement, European Commission President Jean-Claude Juncker said defense cuts were feasible.
"I
proposed to them [Greece] to replace the VAT [value added tax] measures
by other means, and by other instruments, one of these being a modest
cut in the Greek defense budget. This could be easily done," he said.
New
cuts will present a challenge to a military that has already seen
spending drop by 46 percent since 2010. This year, Greece had planned to
spend €3.25 billion on defense, including €700 million on procurement.
If the cuts go through, it could delay planned upgrades to Greece's P-3 aircraft.
"The
P-3 midlife upgrade was approved some months ago, but the funds have
not been released yet," said Periklis Zorzovilis, the president of the
Institute for Security & Defence Analysis in Athens.
Thanos
Dokos, head of the Hellenic Foundation for European and Foreign Policy,
added that the cost of the program — around €500 million — had already
been criticized by Greece's governing party.
The EU's current enthusiasm for Greek defense cuts seems to contrast with 2008, when Greece was first in line for bailouts.
Former
European member of parliament Daniel Cohn-Bendit has said France and
Germany pressured Greece at that time to maintain orders of German
attack submarines and French helicopters.
Today, Zorzovilis said the military was not considering any new orders.
"The
fuel situation is under control because the armed forces put in an
annual order and there is enough at the moment," he said.
He was
dubious that a planned upgrade for Greece's F-16s, including e-scan
radar, would proceed, despite plans by rival Turkey to procure the F-35.
"The
program is the top priority as these aircraft are the backbone of the
Air Force fleet but the cost would run to €1.2 to €2 billion," he said.
"Therefore it depends directly on the country's fiscal status."
Dokos pointed to Greece's frigate fleet, which is nearing retirement.
"There will have to be soon a decision about extensive modernization or replacement of some ships," he said.
But
if defense cuts can keep Greece from slipping out of the euro-zone,
analysts argued they may be worth it if it keeps Greece on board as a
European team player, thus heading off a security headache in the
Mediterranean.
The first danger of the EU expelling Greece would
be closer Greek-Russian ties, said Paul Schwartz, a nonresident senior
associate who focuses on Russia with the Center for Strategic and
International Studies.
"I think [Russian President Vladimir] Putin
would like to use this as an opportunity to improve relations with
Greece," Schwartz said. "In his ideal world, he would like to split
Greece further away from the EU and NATO. But I don't think he'll be
that successful."
Schwartz argued Greece has shown no real desire
to move away from NATO, and remains militarily integrated with the
Western nations.
"Ultimately, even if Greece were to exit the
Eurozone, they are so highly integrated with the West that it is
unlikely to remove them from the West's orbit," he said.
Richard
Aboulafia, an analyst with the Teal Group, agreed that while Putin may
look to cause "mischief" with the Greek situation, it is unlikely to
drive a wedge between that country and NATO.
"Greece has been for
many, many years a highly valued and staunch ally within the NATO
alliance," said NATO Secretary General Jens Stoltenberg.
"Greece
is today meeting the guideline of spending 2 percent of GDP on defense. I
support all efforts to reach an agreement between the European Union
and Greece, but of course it's up to Greece and the European Union to
find out how to do that. I support the efforts, and I hope that they
will find an agreement. I think that's important for the EU, for Greece,
and all of us."
But one Italian analyst was less confident in Greece's ties to Western Europe.
"If
there is a break, it would weaken the EU and cause problems for NATO,"
said Stefano Silvestri, head of the Istituto Affari Internazionali, a
Rome think tank.
"This comes at a time when we have problems with
Turkey, and while Russia is carrying out naval maneuvers in the
Mediterranean and China, which in turn is investing in the Greek port of
Pireus. China is currently docking naval ships in Djibouti, but could
move them," he said.
"Problems in Greece could also reopen the
Pandora's box, which is the Balkans," he said. "Greece could try to
accelerate the break-up of Macedonia, which would in turn restart
Albanian ideas of a greater Albania, in turn setting off other
disputes," he said.
Aaron Mehta, Pierre Tran and Martin Banks contributed to this report.
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