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The Submarine Deals That Helped Sink Greece
ATHENS—As Greece slashes spending to avoid default, it hasn't moved to skimp on one area: defense.
The deeply indebted Mediterranean nation, whose financial crisis roiled the global financial system this year, is spending more than a billion euros on two submarines from Germany.
It's also looking to spend big on six frigates and 15 search-and-rescue helicopters from France. In recent years, Greece has bought more than two dozen F16 fighter jets from the U.S. at a cost of more than €1.5 billion.
Much of the equipment comes from Germany, the country that has had to shoulder most of the burden of bailing out Greece and has been loudest in condemning Athens for living beyond its means. German Chancellor Angela Merkel has admonished the Greek government "to do its homework" on debt reduction.
The military deals illustrate how Germany and other creditors have in some ways benefited from Greece's profligacy, and how that is coming back to haunt them.
Greece, with a population of just 11 million, is the largest importer of conventional weapons in Europe—and ranks fifth in the world behind China, India, the United Arab Emirates and South Korea. Its military spending is the highest in the European Union as a percentage of gross domestic product. That spending was one of the factors behind Greece's stratospheric national debt.
The German submarine deal in particular, announced in March as the country lurched toward bankruptcy, has cast a spotlight on the Greek military budget and on the foreign vendors supplying the hardware. The deal includes a total of six subs in a complicated transaction that began a decade ago with German firms.
The arms sales are drawing heat from Turkey, Greece's neighbor and arch-rival. "Even those countries trying to help Greece at this time of difficulty are offering to sell them new military equipment," said Egemen Bagis, Turkey's top European Union negotiator, shortly after the sub deal was announced. "Greece doesn't need new tanks or missiles or submarines or fighter planes, neither does Turkey."
Greece's deputy prime minister, Theodore Pangalos, said during an Athens visit in May by Turkish Prime Minister Recep Tayyip Erdogan that he felt "forced to buy weapons we do not need," and that the deals made him feel "national shame."
Other European officials have charged France and Germany with making their military dealings with Greece a condition of their participation in the country's huge financial rescue. French and German officials deny the accusations.
A spokesman for German Chancellor Merkel says the submarine transaction was the culmination of an old contract signed long before Greece's debt crisis. In May, France's defense ministry said Greek authorities have confirmed their willingness to pursue talks on several arm-procurement deals.
In May, Greece's economic crimes unit began investigating all weapons deals of the past decade—totaling about €16 billion—to determine if Greece overpaid or bought unnecessary
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The deeply indebted Mediterranean nation, whose financial crisis roiled the global financial system this year, is spending more than a billion euros on two submarines from Germany.
It's also looking to spend big on six frigates and 15 search-and-rescue helicopters from France. In recent years, Greece has bought more than two dozen F16 fighter jets from the U.S. at a cost of more than €1.5 billion.
Much of the equipment comes from Germany, the country that has had to shoulder most of the burden of bailing out Greece and has been loudest in condemning Athens for living beyond its means. German Chancellor Angela Merkel has admonished the Greek government "to do its homework" on debt reduction.
The military deals illustrate how Germany and other creditors have in some ways benefited from Greece's profligacy, and how that is coming back to haunt them.
Greece, with a population of just 11 million, is the largest importer of conventional weapons in Europe—and ranks fifth in the world behind China, India, the United Arab Emirates and South Korea. Its military spending is the highest in the European Union as a percentage of gross domestic product. That spending was one of the factors behind Greece's stratospheric national debt.
The German submarine deal in particular, announced in March as the country lurched toward bankruptcy, has cast a spotlight on the Greek military budget and on the foreign vendors supplying the hardware. The deal includes a total of six subs in a complicated transaction that began a decade ago with German firms.
The arms sales are drawing heat from Turkey, Greece's neighbor and arch-rival. "Even those countries trying to help Greece at this time of difficulty are offering to sell them new military equipment," said Egemen Bagis, Turkey's top European Union negotiator, shortly after the sub deal was announced. "Greece doesn't need new tanks or missiles or submarines or fighter planes, neither does Turkey."
Greece's deputy prime minister, Theodore Pangalos, said during an Athens visit in May by Turkish Prime Minister Recep Tayyip Erdogan that he felt "forced to buy weapons we do not need," and that the deals made him feel "national shame."
Other European officials have charged France and Germany with making their military dealings with Greece a condition of their participation in the country's huge financial rescue. French and German officials deny the accusations.
A spokesman for German Chancellor Merkel says the submarine transaction was the culmination of an old contract signed long before Greece's debt crisis. In May, France's defense ministry said Greek authorities have confirmed their willingness to pursue talks on several arm-procurement deals.
In May, Greece's economic crimes unit began investigating all weapons deals of the past decade—totaling about €16 billion—to determine if Greece overpaid or bought unnecessary
.
.
.
.
.
.
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