As Germany insists that Greece submit to harsh austerity measures leaving pensions cut, unemployment soaring and the healthcare system slashed, one area it believes needn't be cut is Greece's weapons purchases, provided in great part by and benefiting Germany.
The Guardian's Helena Smith reports from Athens that both Germany and France, while pushing Greece to make cuts to its healthcare program, were trying to seal lucrative arms deals with the country.
Smith writes: "Speculation is rife that international aid for the country was contingent on Greece following through on agreements to purchase military hardware from Germany and France."
* * *
Helena Smith reporting for The Guardian:
German 'Hypocrisy' Over Greek Military Spending has Critics Up in Arms
Greek profligacy may be blamed for triggering the debt crisis that now threatens to tear the eurozone apart, but if there is one area where Berlin is less excoriating of state largesse it is in Athens' extravagant taste for arms.
Behind the frequent exhortations that Greece rein in spending after living "beyond its means" – admonishments made most loudly by Merkel and her finance minister Wolfgang Schäuble – there is another reality that paints Germany in a less than flattering light, according to MPs, military experts, economists and scholars.
"If there is one country that has benefited from the huge amounts Greece spends on defence it is Germany," said Dimitris Papadimoulis, an MP with the Coalition of the Radical Left party.
"Just under 15% of Germany's total arms exports are made to Greece, its biggest market in Europe," Papadimoulis said, reeling off figures from a scruffy armchair in his party's parliamentary office. "Greece has paid over €2bn for submarines that proved to be faulty and which it doesn't even need," he said.
"It owes another €1bn as part of the deal. That's three times the amount Athens was asked to make in additional pension cuts to secure its latest EU aid package."
According to the Stockholm International Peace Research Institute (SIPRI) France is not far behind. Some 10% of its total arms sales go to NATO-member Greece. From 2002 to 2006, Greece was the world's fourth biggest importer of conventional weapons. It now holds 10th place.
"As a proportion of GDP, Greece spends twice as much as any other EU member on defence," said Papadimoulis, who is also a former MEP.
"Well after the economic crisis had begun, Germany and France were trying to seal lucrative weapons deals even as they were pushing us to make deep cuts in areas like health."
Under the latest EU-IMF sponsored rescue program – which is propping up the near-bankrupt Greek economy with an extra €130bn in emergency loans until 2015 – Athens has agreed to pare back defence expenditure by €400m. But even with such cutbacks, its military budget still accounts for nearly 4% of national economic output compared to the eurozone average of around 2%. [...]
Speculation is rife that international aid for the country was contingent on Greece following through on agreements to purchase military hardware from Germany and France. [...]
Given Greece's parlous financial predicament – illuminated last week by IMF managing director Christine Lagarde's refusal to rule out a default by Athens – growing numbers have begun to question the probity of the nation's defence expenditure.
As the crisis was unraveling, deputy prime minister Theodore Pangalos publicly rued the fact that Athens was spending so much money on arms, exclaiming during a visit to the Greek capital by the Turkish prime minister, Recep Tayyip Erdogan, that Greece was being "forced to buy weapons we do not need".
No other area has contributed as heavily to the country's debt mountain. If Athens had scaled back defence spending to levels similar to other EU member states over the past decade, economists claim it would have saved around €150bn – more than its last bailout. Instead, Greece dedicates up to €7bn a year to military expenditure – down from a high of €10bn in 2009.
# # #