Monday, August 17, 2015

Greece, German defence industry's best client - Handelsblatt

First entry: 10 August 2015 - 14:31 Athens, 11:31 GMT
Last update: 16 August 2015 21:30 Athens, 18:30 GMTPolitics
Greece, German defence industry's best client - Handelsblatt
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.
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.
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.

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