Old Enemy (Turkey) May Help Greece Trim Its Budget Deficit

[pampango]

http://www.businessweek.com/news/2010-05-14/old-enemy-may-help-greece-trim-its-budget-deficit-update3-.html

Fear of Turkey’s army led Greece to become the European Union’s biggest military spender as a share of the economy in the past decade. Now, détente between the neighbors offers Prime Minister George Papandreou a route to squeeze extra savings from his country’s army.

Turkish premier Recep Tayyip Erdogan, during a visit to Athens today, said the neighbors and strategic rivals should work to cut military spending. Matching cuts from Turkey would help Greece make the reduction in military expenditures it pledged in return for $139 billion of International Monetary Fund and European Union loans to stave off a debt default.

Greece has spent 50 billion euros ($62 billion) on the military in the past decade, with the budget rising each year since 2003 as the army added fighter jets, submarines and tanks. They are mostly for defense against Turkey: the two NATO members came close to war over territorial rights in the Aegean Sea in 1996. While ties have improved, pilots regularly engage in mock dogfights above its waters. A Greek pilot was killed in 2006 after colliding with a Turkish plane.

Greek military spending was 3.6 percent of gross domestic product in 2008, the EU’s highest, and the country with a population of 11 million was the world’s fifth-biggest weapons importer between 2005 and 2009, according to the Stockholm International Peace Research Institute.

“The conflict with Turkey has been overwhelmingly the thing that’s been keeping Greek military spending as a share of GDP and the arms purchases high” since the Cold War ended, said Sam Perlo-Freeman, head of SPIRI’s military expenditure project. “In the rest of Europe it’s been for the most part completely flat or declining over the last 10 years.”

[nradisic]

1. It's the defense budget stupid!

Here too!