Greece keen on unsustainable arms spending despite dwindling finances
Defense expenditure to gross domestic product (GDP) of the country rose to 3.76% as of 2022 – up from 2.45% in 2019 – when the conservative New Democracy (ND) government took over from the leftist SYRIZA-PS.
This figure is higher than even the US.
What is noteworthy is that over 45% percent of Athens’s massive defense budget is allocated to new weapon purchases.
France reaping big benefits
France, a traditional arms supplier to Athens, has benefited the most from Greece’s accelerated drive for armament, according to the arms transfers database by the Stockholm International Peace Research Institute.
As such, Paris secured big-ticket deals, including 24 Rafale warplanes and FDI frigates, along with developed missiles and electronic warfare systems.
The cost of these two deals is estimated to be around $6 billion.
Washington, to which Athens provided access to numerous military facilities through the update of the Mutual Defense Cooperation Agreement in 2019 and 2021, has recently expedited the transfer of the vast amount of weapons.
In September, the US also delivered the first pair of the country’s 83 F-16, which will be updated to Viper configuration, as part of a deal worth $1.5 billion.
What is more, according to the US Department of State, Greece also expressed keen interest in joining the F-35 Joint Strike-Fighter program, as well as future procurements of MQ-9 Unmanned Aerial Systems, AH-64E Apaches, as well as upgrades to their M-270 MLRS and Patriot systems.
Israel training pilots
Israel is another major beneficiary of the boost in Greek defense spending. Apart from training pilots for the Greek Air Force as part of a $1.7 billion deal, it also inked deals for supplying an unspecified number of Spike-NLOS missiles for $370 million and leasing four Heron UAVs.
During the same period, Germany agreed to sell 44 DM2A4 heavy torpedoes at the cost of $110 million for Greek submarines and the UK sold 2 Vita-type fast attack crafts for $300 million.
The Greek Statistical Authority confirms the worsening state of Greek public finances. Accordingly, the Greek government’s nominal debt, as of 2022 Q1, exceeded $357 billion.
The country also posted a record 12% annual inflation, the highest in the last three decades.
While natural gas prices in Greece have hit a record high with a 332% annual increase, air transport saw a 58.7% rise, followed by electricity at 30.5%.
According to recent stats, over 28% of the Greek population lives at risk of poverty or social exclusion, while almost 30% experiences material deprivation.