Greece: Defense Spending and the Financial Crisis
Greece and Turkey held a minisummit in Athens on May 14, during which Greece proposed a mutual cut in defense spending of 25 percent. Reining in defense spending is of great interest to Athens in the wake of the financial crisis that has strongly buffeted Greece of late, but this dilemma does not lend itself to any obvious solution.
Greece spends more on defense as a percentage of gross domestic product (GDP) than any other EU member including the United Kingdom, which maintains a global defense reach, and Poland, which sees itself as needing to be ready to hold out against the vastly superior Russian army. This was true both before the 2008 crisis began, when Greece’s budget deficit stood at 6 percent of GDP, and after recent austerity measures were put in place to bring spending under control.
Greece’s outsized defense spending is a product of its deep insecurities with respect to its much larger (in terms of territory, population and economy) neighbor and historic rival, Turkey. In just one measure of the result of these fears, Greece has a larger — and qualitatively superior — air force than Germany. Air power is an extremely important part of Greek defense strategy because land-route invasions into Greece are paltry, and air superiority over the Aegean is crucial to maintaining communication and transportation links between different islands and points on the mainland.
Historically, Greece has managed to survive by securing an outside sponsor. Such sponsors have sought to bottle up their regional rivals by taking advantage of Greece’s strategic location. Indeed, the modern Greek state owes its independence to the support of the United Kingdom, which sought to use Greece as a means to balance the unraveling Ottoman Turkey with the rise of Imperial Russia in the early 19th century. Most recently, the United States and NATO backed Greece as a part of the Western bid to keep the Soviet Union bottled up in the Black Sea and Yugoslavia bottled up in the Balkans.
With the disappearance of regional power Yugoslavia and the Soviet superpower, however, such support has ended. This left Greece with only its two economic mainstays — shipping and tourism — neither of which has sufficed to plug the spending gap caused not only by defense but also social spending. Greece managed the difference with borrowed money, contributing to the debt nightmare and current financial crisis. Not surprisingly, Athens is therefore eager to persuade Turkey to join it in defense cuts.
The likelihood of significant Turkish defense cuts is low, however. Turkey is expanding its geopolitical prowess, which means that it has to consider the Caucasus, Black Sea and the Middle East in terms of general security concerns. But Ankara has outgrown its security concern with Greece, which explains why it is trying to use conciliatory gestures to reassure Athens that it no longer sees Greece as a challenger. Greece may have to accept such gestures as the best deal it can get, though this will not necessarily be palatable for either its public or its military.