Greek Leaders See Defense Cuts, Turbulence Ahead

By PERICLES N. ZORZOVILIS, ATHENS


Greek military leaders say reckless financial decisions in the past will make for

turbulent times ahead.


Overspending the last 10 years has resulted in the accumulation of excessive

obligations for the financial servicing of the existing contracts, amounting to more

than 9.5 billion euros [$12.6 billion],” one high-level military official said. “The

practice of postponing the payments or extending the payment schedule well

ahead in the future created a financial stove-pipe … now we have to restrain

ourselves within the strict framework set by the Ministry of National Economy and

Finance and to structure in such a way our armaments procurement that will meet

the level of the yearly outlays.”

Last July, after a seven-month delay, the Greek governmental council for foreign

affairs and defense, known as KYSEA, approved the 26.7 billion euro Hellenic

Armed Forces midterm unified armaments procurement plan (EMPAE) for 2006-15.


Government officials also announced plans to hold defense spending under 1

percent of Greece’s gross domestic product — $238.2 billion in 2005 — for the next


10 years. This would be about half of the 2 percent level between 1999 and 2003.

“We expect that by rationalizing our spending, we will be able to absorb a

significant percentage of the reduction,” the official said. “In addition, we must face

and deal effectively with the burden from the past years.”

The new EMPAE will spend 8.43 billion euros on debt service, leaving just 2.95

billion euros for new weapons, “which is a modest sum in reference to the Greek

multifaceted and multilevel threat situation and operational reality,” the official

said. “But even within this bleak financial context, EMPAE aims to satisfy the

operational requirements of the Hellenic National Defense General Staff, and the

type and prioritization of the programs included in it reflects this fact.”


The picture gets brighter in 2011-15, with just 1.09 billion euros for debt service of

a 15.35 billion euro acquisition plan.

About 26 percent of the programs included in EMPAE 2006-10 concern weapons

upgrades; 19 percent to buying new aerial weapons, 15 percent to new ground

weapon purchases, and 5 percent for air defense.

“These statistics make evident the effort of the Hellenic National Defense General

Staff to fully exploit operationally the in-service systems and increase significantly

their usability,” the official said.


Demands of International Missions

The upgrades are needed to meet the ever-increasing obligations for international

forces.

“Participation in all the multinational, NATO and European Union operations and

force structures are requiring very flexible, highly trained and appropriately

equipped forces; this accelerated operational tempo puts additional strain, since

the nation maintains also a strong conventional capability,” the official said. “But

nevertheless, we must meet our obligations and support our allies and partners.”

Among the new armament programs are:

• Six multimission frigates: 167 million euros in 2009, 337 million euros in 2010.

The Armaments Directorate of the Hellenic Navy’s General Staff will finalize

operational and technical specifications by 2010. No other major naval

procurement program is funded sufficiently until 2011.

• 84 wheeled and 291 tracked armored combat vehicles.

• Satellite communication systems.

• Transport helicopters for the Army’s airmobile forces.

• A space earth observation system through the BOC Helios initiative.

• Search-and-rescue helicopters and associated equipment: 35.4 million euros in

2010, part of the 234 million euros total through 2015.

• 45 training aircraft, called NAPEE by its Greek acronym: 90 million euros in 2010,

part of the 831 million euros total through 2015.

The budget also has a systemic flaw unrelated to the availability of funds, said

Nikolaos Toskas, a retired major general and independent defense analyst here.

“The procurement system is focusing on platform acquisition without taking into

account the life-cycle cost; ammunition and spare parts are considered for a

second or a later phase after the main weapon system procurement negotiation,”

he said.

Moreover, he said, “Today, personnel expenditures comprise 76 percent of the

defense budget while the equipment expenditures, according to NATO accounting,

are only 8 percent. To maximize the return of the investment and address this

imbalance, we must adopt a new procurement system based on a joint defense

planning.” •

E-mail: pzorzovilis@defensenews.com.