Austerity, Populism and Greek Defense

by Dan Darling, Forecast International

These are interesting times for Europe – and in particular for Greece. While leaders of European Union member countries worry about the recidivist tendencies of an emboldened Russia, the emerging underbelly of the EU – both diplomatically and economically – now lies in Greece. A strange coalition of extremist parties – both left and right – now sit atop the government in Athens, bringing with them a mixture of narrow populism and economic grievance.

After the far-left Syriza Party won the January 25 election, its leader (and now prime minister) Alexis Tsipras shocked observers by inviting the far-right Independent Greeks (ANEL) Party to join in a ruling coalition as junior partner. The new government has first and foremost sought to carve out a financial way forward for Greece that would allow for Athens’ independence of action. Anxious to shed the shackles of austerity requirements imposed on Greece by its IMF and EU lenders as the cost of their EUR240 billion ($270 billion) bailout aid, the Syriza-led coalition has nonetheless sought from the EU – and received approval for – an extension of its current bailout.

The act of brinksmanship performed by the Tsipras government with regard to its creditors notwithstanding, the courtship between Moscow and Athens represents another concern for Europe and the West.

The leaders of both parties in government have been vocal in their hostility toward Germany, appear favorable toward Russia, and are, at best, lukewarm about the NATO Alliance and its influence on European foreign policy. This causes discomfort for Greece’s European partners, who expect Athens to abide by its debt commitments and to join in presenting a united front against Russia in resolving conflict in Ukraine, and who otherwise worry that an unchecked economic populism emanating from Greece may lead to political gains for extremist parties across the continent.

All of this makes for compelling drama, but does not even begin to cover another issue: Greek defense.

Years of deficit-cutting as a result of its 2010 bailout agreement have seen Greek defense investment – for years the highest per capita in Europe – plummet. With Syriza intending to invest in poverty-reduction and social welfare programs as per its anti-austerity campaign platform, there is a distinct possibility its favored policy approach will come at the expense of the armed forces.

Since the start of Greece’s sovereign debt crisis in 2010, its defense investment has fallen by 46 percent, from a topline budget level of EUR6 billion ($7.95 billion) to just EUR3.25 billion ($3.7 billion), as earmarked for this year. In the process, military procurement funding has steadily eroded and once-ambitious equipment modernization plans remain idle or abandoned altogether. What little has been invested in equipment over the past five years has largely gone toward paying off debts on military hardware already brought into service. And while the level of transparency – aimed at preventing corruption in the procurement process – has improved thanks to new laws granting Parliament more oversight on defense spending, the knock-on effect is that future projects sought by the military will face greater scrutiny and thus a stronger possibility for delay.

Meanwhile, the Hellenic Armed Forces – whose long-running rivalry with neighboring Turkey underpinned Greece’s past commitment to generous defense budgets – are seeing their qualitative military-technological edge over their opposite number wither away. The end result is that what once provided the Greek military with high-end technology and force-multiplier leverage against Turkey’s quantitative manpower and equipment advantage no longer serves to offset the latter.

As Turkey has balanced its ambitious military modernization designs with strong economic growth, Greece’s shrinking economic output (a decline of 25 percent since 2008) and austerity obligations have allowed no such comparable defense initiatives.

Previous plans to acquire new fourth- or fifth-generation jet fighters, maritime patrol aircraft, and lead-in fighter trainers for the Air Force, four to six new frigates for the Navy, and a new fleet of Russian-made BMP-3M tracked infantry fighting vehicles have instead fallen by the wayside. The Hellenic Army has been left substituting its older plans for new land systems with transfers of used armored vehicles from U.S. Army surplus stocks.

Without the possibility of bringing new weaponry into service in the short- to medium-term, Greece must instead rely upon maintaining the operational readiness of the Hellenic Armed Forces’ inventory of military hardware while avoiding unnecessary diplomatic friction with its neighbor.

The latter aspect may prove a challenge with the defense portfolio in the hands of ANEL leader Panos Kammenos, who in his first days as defense minister opted to take a helicopter trip to lay a wreath over a disputed, uninhabited island off the Turkish coast that in 1996 served as the flashpoint for a near-war between Greece and Turkey. In response to Kammenos’ stunt, Turkish combat aircraft were scrambled and penetrated Greek airspace.

The real battle, however, may eventually occur within the ruling coalition itself.

While the nationalist Kammenos shares an anti-austerity outlook with Tsipras, their paths diverge on most other policy issues. Kammenos will no doubt seek a higher budgetary allocation for defense. But with a limited expenditure pie with which to divvy, it is unlikely the junior party will be able to carve out a bigger slice against Syriza’s demands for more social spending. The guns and butter debate, therefore, will present a dilemma for the young government – and may also herald its downfall.

In the meantime, Europe – and the Hellenic Armed Forces – will be watching.

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