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Greece Defence and Security Report Q3 2010
Business Monitor International, July 2010, Pages: 70
Business Monitor International's Greece Defence and Security Report provides industry professionals and strategists, corporate analysts, defence and security associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Greece's defence and security industry.
Greece has been rocked by serious protests in recent months as the government has embarked upon a tough austerity programme that may transform the Greek economy in the long term. While some protests have descended into riots, some with loss of life, Greece is a relatively stable and affluent society which should be able to ride out the difficulties in the medium term.
In May 2010, three people were killed in a firebomb attack as post-May Day strikes and protests took a bloody turn, the Times newspaper reported. Greece has a history of protests, which often involve semiorchestrated battles between anarchists and the police. In June, more strikes were held, including one which shut down the port at Piraeus, Athens’s main outlet to the sea, as reported by AP. However, no violence was reported and the situation appeared considerably calmer by late June, perhaps as a fullblown crisis seemed to have been averted.
In the past decade, Greece has spent EUR50bn on its military, and the armed forces budget rose every year since 2003. According to press reports, a major factor behind the substantial and rising outlay was a perception of threat from Greece’s neighbour Turkey. However, in the same period, Greco-Turkish relations have actually improved to the extent that the two countries are arguably closer than at any stage since the foundation of the Turkish Republic in the 1920s. The risk of a full-scale armed conflict between Greece and Turkey in the foreseeable future is negligible, though spikes in tension are possible. Territorial disagreements between Greece and Turkey are increasingly seen as symbolic, and very much secondary to the countries’ mutual economic interests. In summary, if the expansion of the Greek military’s budget in recent years really has been directed at Turkey, it is something of a white elephant.
However, one should also consider other factors, not least Greece’s international military commitments through NATO and the UN. Furthermore, given its strategic position on the Mediterranean, Adriatic and Aegean Seas – with scope to control the exit from the Black Sea, a good case could be made for bringing the Greek armed forces up to date, and ensuring that they are well equipped. Nonetheless, after a period of heavy investment, and with improved relations with Turkey in mind, economic prerogatives are likely to see spending cut significantly. A May 2010 report by Bloomberg suggested that the rapprochement between the two countries would give Greece the opportunity to cut back on military spending, starting with a EUR500m reduction in 2010, as the government looks to tackle the fiscal deficit. However, convincing an already restive electorate, in which the far right has a growing influence, that Turkey is no longer a threat, will be another challenge for the government. Overall, we expect expenditure of US$10.7bn in 2010, rising to just US$11.14bn in 2014, although as more details of forced government austerities come to light, we may revise this forecasts further downwards.
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