2009/12/12

The Greek fiscal "troubles" and Military

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The Greek State has an annual budget deficit of about 10% GDP (12.7% last year).

That's an astonishing figure and in clear violation of Maastricht Treaty rules (max. 3%). Rating agencies already reduced the creditworthiness of Greece from A- to BBB+. This leads automatically to higher interest rates in the future and thus an even worse fiscal situation.


Such a dire fiscal situation can only be overcome with a budget crunch or a state bankruptcy (which means that the budget would need to be balanced afterwards because they would get no fresh credit; which in turn requires a smaller budget crunch as well).

Military spending is a prime target for treasurers in need of cost cutting potential. That's especially true if the nation is part of the most powerful alliance ever, doesn't border on significant non-allied nations and has an above-average military budget level.

Greece's military spending is about 3 % GDP, about twice as much as necessary in comparison with allies. That's already less than the 2005 figure of 4.3%. I expect a military budget crunch down to about 1.5-2% GDP till 2015.

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This makes me think that it's a good idea to have a look at the Greek military and what's about to go away.

Lower military budgets usually mean first and foremost cuts to ongoing procurement programs, less money for training and less or no pay increases. That would lower the overall level of modernity, readiness and morale.

They might drop their slightly obsolete warship HS Olympias, but that's not going to save much money as it's already laid up. ;)


Seriously; the Greek military will likely shrink a lot. Obsolete air and naval power elements will likely appear, and more modern elements have a slim chance of modernisation.

Their 53 F-4 Phantom II will most certainly disappear, some Elli class FFG will likely go away, some gunboats/corvettes are old enough to go away as well and the FREMM frigate procurement is highly questionable.

The inventory of Mirage 2000 and F-16C/D will most likely see rather few annual flying hours. Maybe the Greek do it the smart way and combine few annual flying hours per aircraft with enough (165-240) annual flying hours per pilot. That would keep the quantity of aircraft in inventory stable, but effectively shrink the air force. One or several squadrons of the Tactical Air Force Command could disappear.

The Greek Army has a surprising size if one looks at its formations (brigades, divisions) only. There's certainly much potential for deflation. A peace-time strength of about 100,000 personnel reveals that most of these units are necessarily small in peacetime; cadre formation to be filled during mobilisation.

The army might slim down, but a slow pace of modernisation, low training budgets and abstinence from political adventures like ISAF (no Greek troops as of today) may be the greatest limitations to their army in the next years.

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What would this mean to NATO?
In my opinion it would mean almost nothing to NATO.

NATO doesn't need more Greek military power than Greece can afford, in fact it would be a good move to ask Greece to slim down its military in order to keep a healthy base for future needs instead of an underfunded, inflated body of low utility.

Their large and relatively expensive military is a leftover from their territorial conflicts with Turkey (Aegean islands, Cyprus). Greece was always militarily inferior to Turkey, though - the unaffordable military expenditures did not change this and became dysfunctional after the Cold War. The political conflict with Turkey has cooled down since the late 80's anyway.

Nobody asked me or will ask me about this, but my opinion is that the Greeks should drop to 1.5% GDP as budget and build a well-trained and well-equipped force with that budget.
They should build an overqualified force that's ready for quick growth (similar to the late 20's Reichswehr) with enough modern equipment to develop and maintain high-end skills.

Add to this a strong interest in experiments to bridge the experience gap between past and future conventional warfare.

Sven Ortmann

P.S.: I assumed rational political behaviour. Most Greeks have a rather low opinion of their politicians (obviously for good reasons). Future Greek governments could do about anything, no matter rational or not.
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3 comments:

  1. In my oppinion Greek force reductions will depend on the relationship with Turkey. You noticed correctly that the Greek-Turkish hostilities have declined in the past years.
    Nevertheless Greece will feel vulnerable, if it disarm unilateral.

    My suggestion is the following:
    NATO or EU should support a (kind of) "mutual balanced force reduction" treaty between both states.
    As the southern and eastern borders of Turkey are quite hostile areas, there will be some resistance against this plan.
    A solution could be the conversion of the Turkish arsenal.
    The Turkish Navy could reduce its offensive potential (Landing Crafts etc.) and position its forces in the Black Sea or in the eastern parts of their Mediterranean Coast.
    The Turkish Air Force should reduce its F-4- and F-5-fleet to a minimum for training. The other aircrafts should be stored in other NATO-/EU-countries. So they can be used as reserve in a conflict with Iran for example but not against Greece.

    Unfortunately this plan will fail. Which important NATO-country is interested in a disarmament of both states? OK, perhaps some EURO-members. But the economical interests are quite huge: Germany wants to sell submarines, France wants to sell frigates and the USA wants to sell fighters...

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  2. Well, the submarine trade was already blown and Greece doesn't look like a liquid buyer of additional ships and fighters to me.

    The influence of a Turkish peace dividend on the relations between the moderately Islamist Turkish government and the Kemalist (secular) military would be interesting.

    A classic government's approach to improve the mood of an almost rebellious military would be to buy new toys. That would be the opposite of what you propose.

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  3. As far as the relationship between Greece and Turkey goes, it's clear that Turkey is simply leaving Greece behind as a rival. Turkey is becoming a regional power with significant interests and influence in the Middle East and Central Asia. It's very unlikely that the Turkish government will be willing to base their force structure on a balance of power with Greece.

    I think this realization is one of the reasons the rhetoric and rivalry between Greece and Turkey is cooling. Both nations have other problems. Greece has internal political and economic issues and Turkey is distracted by its own regional power aspirations. They really can't afford to keep each other as enemies anymore.

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