Structural considerations for a prosperous Greece
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Why doesn't Tsipras just cut defence spending?
It seems the easiest option for a left-wing party coming to power and needing to save money: cut defence spending. However, despite being under intense pressure from Greece’s lenders to find a way to meet fiscal targets over the next few years, making some of the savings it needs from reducing expenditure on the military is not as easy as it first seems for SYRIZA.
The first difficulty that Prime Minister Alexis Tsipras faces in slashing the defence budget is that – contrary to what many people think – spending on Greece’s army, navy and air force has already been reduced since the crisis began. According to the Stockholm International Peace Research Institute (SIPRI), an independent institute that focuses on global security issues, Greece had a military expenditure of 7.6 billion euros in 2009 but this fell to 4 billion by last year – a 47.7 percent reduction.
According to the Greek budget, the government spent an average of 428 million euros on military procurements in each of the last three years – a figure that seems relatively modest compared to the costly purchases of the past associated with the now jailed former Defence Minister Akis Tsochatzopoulos.
A large part of Greece’s defence spending is on personnel costs but this has also fallen during recent years. Before the crisis began, more than 70 percent of the defence budget was used to pay staff but, according to the International Institute for Strategic Studies (IISS), this has now dropped closer to 50 percent.
This reduction in spending, though, has to be balanced against the fact that Greece’s military commitments have not been reduced drastically. Although Greece’s participation in multinational missions has been trimmed down, NATO spending requirements mean that it is required to invest more than 2 percent of GDP in its armed forces. Greece, Britain, the US and Estonia were the only NATO members to meet this commitment last year, according to IISS. Last week NATO chief Jens Stoltenberg referred to Greece as a “highly valued and staunch ally that fully meets its defence spending pledges”.
However, Greece also has its own domestic security reasons for maintaining its military at a certain level. While relations with Turkey are much improved compared to the tension-filled days of 1996, when the two countries almost went to war over Greece’s Imia islets, a threat still remains. Dozens of Turkish air force jets conduct unauthorised overflights in Greek air space each year. More recently, Turkish warships have also entered Greek waters without permission.
Ankara still maintains the casus belli principle it adopted in 1995, by which it would deem a unilateral move by Greece to exercise its legal right to extend its territorial waters to 12 miles as a cause for war.
This and other potential security issues, including the ongoing dispute in Cyprus and the spike in irregular immigration, mean that there is pressure on the Greek government to keep its armed forces as prepared and adequately equipped as possible. This, of course, does not mean there is no room for savings. The absence, for instance, of a comprehensive defence review over the last five years has been a serious failing.
The problem for Tsipras, though, is that he has to tread carefully with the military, which is a conservative and traditionally right-wing institution. As a left-wing politician he runs the risk of losing the armed forces’ support if he is seen trying to rapidly shrink its capability. His predecessor, right-wing Antonis Samaras, faced strong criticism after cutting the wages of military personnel in August 2012 and then being unable to fully restore the salaries when a court ruled the reductions unconstitutional in 2014.
This also serves as a reminder that the institutions are not looking for one-off cuts from Greece but for reductions that will bring recurring results. The Financial Times reported last week that the European Commission and the European Central Bank have put the idea of defence spending cuts on the table but noted that the International Monetary Fund “is prohibited in its rules from requiring military cuts as part of a bailout programme”. So, Athens could offer to spend nothing on military procurements this year but this would not necessarily be seen by its lenders as a structural measure that produces a permanent spending cut.
One of the reasons that Tsipras chose to form a coalition with the nationalist Independent Greeks party is that this, theoretically, strengthens the government’s relationship with the armed forces and the police. It is no coincidence that Independent Greeks leader Panos Kammenos was appointed defence minister. Since January, he has been enthusiastically extolling the virtues of the Greek military in his almost daily visits to bases around the country. This week he called for public TV to air a weekly programme about the country’s armed forces.
However, Kammenos’s presence also creates a problem for Tsipras as the defence minister’s vision of a strong military does not come cheaply. One of his first moves as defence minister was to advise the Greek leader to sign a 500-million-euro contract to upgrade five surveillance planes. Opposition parties argued that this was not the wisest investment given that the airplanes are 35 years old. The government insisted that the expenditure was needed so Greece could take part in NATO surveillance operations in its region.
In its latest proposals to lenders, the Greek government has included cuts of 200 million euros to defence expenditure, mainly from shutting down some military camps and scrapping equipment. There is perhaps room for more savings in this area but – for the reasons already mentioned – Greece’s defence budget cannot provide a magic solution to overcome the impasse between Athens and its lenders.
*You can follow Nick on Twitter: @NickMalkoutzis. A version of this article appeared in last week's e-newsletter, which is available to subscribers online or via our free mobile apps (App Store and Google Play).