Troika Wants Greek Defense Industry Sliced



ELVOFaced with a looming budget gap that could be five times more than what Greece has estimated, international lenders are pressing the government to close two defense industries or significantly reduce their workforce and costs.

The government is eager to save its Hellenic Defence Systems (EAS) — weapons and ammunition producer — and the Hellenic Vehicle Industry (ELVO) and has offered a plan to reduce their costs.

But the Troika rejected the plan that aimed to overhaul EAS, citing the industry’s weak presence in international markets, and insisted the government reduce its workforce from 900 to 341.  The Troika said it is not possible to save the two industries, describing them as a drain on government coffers with a reputation of inefficiency.

The full impact of the austerity measures will not be known until Greece and the Troika actually agree either to close down the industries or cut back their workforce, said Ioannis Michaletos, a defence specialist for the Institute of Security & Defence Analysis in Athens.

“The most important aspect is the decreasing defence cuts in conjunction with the inability to reconstruct the defence strategy so as to minimize impact without reducing firepower and alertness capabilities,” Michaletos told Southeast European Times. “I believe that the Greek defense ministry can do it if it slashes unnecessary formations. This has already started but it is slowly enforced,” Michaletos said.

Prime Minister Antonis Samaras has been adamant about not having any more austerity, despite moving ahead to suspend, transfer or fire 40,000 public workers. Finance Minister Yannis Stournaras said Greece’s 2014 budget gap is 500 million euros and can be fixed with social security cuts and other unspecified reforms as well as better tax collections, but the Troika said the budget gap can reach 2.5 billion euros.

Greece spent 2.5 percent of its GDP last year on defense – nearly 5 billion euros – and much of that sum on its own state industries. Stournaras said the defence industries should be given time to crawl toward profitability by being export oriented at the same time the government was set to spend 144 million euros on buyouts at EAS, a sum considered too high by the Troika.

The government also wanted to spend 27.5 billion euros on ELVO until it could obtain new orders; it has no orders at present. Meanwhile, the government put forth another proposal to the Troika, saying it aims to reduce the retirement bonuses at the defense industries.

It provided new data saying the two industries are better off than it appears, claiming it can make EAS profitable in two years. But the Troika said it is skeptical. As for ELVO, it stated that “an outright bankruptcy of the company is the most desirable and realistic solution.”

Some defense experts said they worry that focusing on cost-effectiveness will affect Greece’s national security, and national defense will be compromised if Greece no longer has a home-grown industry.

“The defense industry in Greece, as it happens everywhere, is part of the defence and security of the country. If it vanishes, the dependency on foreign materials only increases the security problem,” retired Vice Admiral Vasilios Martzoukos told SETimes.

Austerity has to be applied carefully to defence, he added. “It is one thing to make the companies healthy by radical changes inside, but that’s completely different from closing them,” Martzoukos said.

(Used by permission of Southeast European Times, www.setimes.com)


13 COMMENTS

  1. Yes Greece must shut down it’s domestic arms makers and buy more military hardware like submarines from the Germans. Frau Merkel wills it and it will be done. Meanwhile Akis is shaking his head in disgust.

  2. In one word.,,, no.

    If anything we have to expand our military spending (including domestic industries as Polycrates suggest) because some of our alleged “allies” have failed dramatically in their NATO responsibilities to protect us.

    a. with FYROM they all pretend they don’t notice their change into “ancient Macedonians” and irredentism,

    b. And of course there was no “coalition of the willing: to remove occupying Turkish military forces in Northern Cyprus or condemnatioins of Turkish military provocations into Greek waters because a dishonorable unprincipled US government often just takes the side it sees more in its interests than what is morally right).

    Case in point…

    “This (US) government considers talk of Macedonian “nation”, Macedonian
    “Fatherland”, or Macedonia “national consciousness” to be unjustified demagoguery representing no ethnic nor political reality, and sees in its present revival a possible cloak for aggressive intentions against Greece” – US State Department Dec, 1944 (Foreign Relations Vol. VIII Washington D.C. Circular Airgram – 868.014/26)

  3. Other than weapons used to fighting guerrilla wars of occupation (IEDs, high powered rifles, etc.) conventional forces are largely useless for Greece. We are small country with little chance of competing with big countries like Turkey without outside support (its seven times our size and a bigger economy)

    Since our former allies can no longer be trusted to protect us, we should be investing in nuclear power plants then quietly adopt the technology to build nuclear weapons (and eventually ICBMs that can target any nation on earth).

    No country that has nuclear weapons is ever directly attacked in full out out assault. The only exception is Japan.. that didn’t know the US had nukes and surrendered immediately after only two bombs. One key reason there was no war between Soviet Union and US is because both sides knew they would be flattened if either tried. Even today, the US (big tough guys casually attacking non-nuke Iraq) don’t dare attack the nuclear equipped North Koreans. Even Israel hasn’t been attacked in a full out war with Arab neighbours ever since it got nukes.

    If your enemy knows that if they attack you you will turn them into nuclear ash as a response…, they will stick to their side of the fence. Mutual assured destruction. Having nukes would even make our former allies far more response to our concerns over issues like FYROM and Turkish military provocations into Greek waters.

    Unfortunately many our leftist cowards are perpetually trying to disarm us so it would be political difficult to move in this direction. (since some “greek” leftist could be trusted to treasonously spill the beans before we developed the nukes) The key to getting nukes is getting them quietly. Your enemies may plausible invade you before you get them but not after.

  4. The first step to overcoming the left wing extremism problem is by the greek people uniting to vote all leftists out of office.

    The leftists are anti-greek on virtually every issue when it comes to national defense. Aside from constantly whining about absolutely necessary military spending they constantly defend illegal migrants (rather than condemn them), say next to nothing on FYROM or any other foreign nationalist hostile towards greeks (other than when it comes time to shamelessly demand money from foriegners)

    Pseudo-Greeks. Ancient Greeks would have been disgusted at such unprincipled cowardice. Certainly nothing to do with Hellenism. Ancient Greeks knew the importance of a strong military.Our middle age ancestors knew this. The ones that liberated us from the Ottomans knew this.

    Our leftists on the other hand fight not to preserve Hellenism but only to save their own skins. They care far more about their leftist ideology than Hellenism. (why they betrayed their own country for IMRO and communism during the Greek civil war)

  5. Greece needs democracy and liberty fro all ethnic groups and not more weapons to kill people. Its boarders are guaranteed by NATO , so it must spending EU taxpayers money for unnecessary hegemony .

  6. Without a military, a country is at the mercy of others for its security. Dumb.

    De Gaulle had it right. With people there can be friends but when it comes to nations there are only interests. Today’s friend is tomorrow’s enemy (as many Greeks have learned the hard way — as some of our so-caled allies collude with Skopians threatening our country)

  7. Uhmmm… Greece already has democracy and. other ethnic groups in Greece are treated far better than 90% of countries on this planet. Go to places like Liberia, Saudi Arabia, Israel and South Korea to see how other ethnic groups are treated before lecturing Greece.

    Since so many foreigners appear to be trying to ethnically delete Greeks these days, Greece needs weapons to defend its own people from being killed.

  8. You stand in front of an invasion waving a paper like Neville Chamberlain claiming NATO will protect Greece. The rest of Greece will be taking a bead on them. Like the recent Bosnia conflict, NATO will stand fast and fight to the last American.

  9. What part of Greece is bankrupt don’t you understand? Where are you going to get the money for your glorious war?? “deflation” is headed your was boy and you better prepare for no wages.

  10. What part of Greece is near a primary surplus don’t you understand?

    No one argued for war you patronizing bigot. Since our former allies decided to betray us to the former Yugoslavians (effectively colluding with extremists trying to ethnically erase us).we can no longer depend on them.
    I would rather default and let the cards fall were they may than give up our defense. If anything we should spend more money on defense. not less. For instance nukes would be a great addition to Greek arsenal. Watch how fast everyone becomes more sensitive to names when a country can drop 5 megaton bombs on their capital cities (see Republic of China… which virtually no one recognizes because of pressure from mainland China)

  11. NATO no longer protects its members. Its only a front for whatever the US wants. (which much like the UK is unprincipled and has betrayed long time NATO ally and friend Greece)

    “This (US) government considers talk of Macedonian “nation”, Macedonian “Fatherland”, or Macedonia “national consciousness” to be unjustified demagoguery representing no ethnic nor political reality, and sees in its present revival a possible cloak for aggressive intentions against Greece” – US State Department Dec, 1944 (Foreign Relations Vol. VIII Washington D.C. Circular Airgram – 868.014/26)

  12. If you don’t like defense industry, before ranting about Greece (population 11M and zero threat to invade anyone) why not start by first focusing on the US… which spends nearly 1/2 of the global industry on military, and invades countries for imaginary WMDs while meanwhile having thousands of nuclear weapons.
    Greek hating hypocrite.

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