Greece Defence and Security Report Q3 2008

In early June French officials said talks on the sale of Rafale fighter jets, Super Puma helicopters, and Fremm frigates to Greece were 'advancing well', Reuters news agency reported. The French government was said to be discussing the sale of 40 of the fighter planes manufactured by Dassault Aviation, 15 Super Puma helicopters made by Eurocopter, and 10 frigates. Discussions were brought to the fore by an official visit to Greece by President Nicholas Sarkozy. Together with Greek Prime Minister Costas Karamanlis, Sarkozy signed a joint declaration on defence and security. During the visit the French president also spoke of Europe's immigration issue and called for the creation of a 'European border guard system'. He said he was 'very interested' in a 'joint French and Greek system of coast guard patrol boats'.

The Greek defence industry's good relationship with the US, plus NATO and EU membership, should ensure that it continues to benefit from a significant number of subcontracts and plays an important role in the exporting of arms to the Middle East and emerging European countries. There appear to be no immediate threats on the positive path that Greece, a long-term member of Europe, is steering.

Government reforms are boosting consumer and business confidence, and the economy is expected to continue growing in 2008.

In early December 2007, Greece agreed to buy 415 BMP-3 fighting vehicles from Russia, worth an estimated EUR1.7bn (US$2.5bn). Defence spending in Greece runs at around 3% of GDP, one of the highest levels in the EU, partly because of a policy to keep an arms balance with Turkey. Greece has a 10-year defence procurement plan worth a total of EUR27bn in 2006-2015, including the purchase of fighter planes. Russian-built Sukhoi SU35s are being considered among other models to meet the country's need for 30 fourth-generation fighter jets in a contract worth EUR4bn expected to be awarded during 2008. Greece's relations with Russia have improved in recent years, with a joint oil pipeline project launched in 2007. Then Russian President Vladimir Putin visited Greece three times in 2006- 2007.

Greece's military expenditure has remained at a steady level over recent years, but decreased over 2005.

Growth will be limited by Greece's ongoing EU obligation to bring its budget deficit down to under the 3% GDP limit applied to eurozone countries. The Greek defence industry continues to be involved in the manufacture and export of ammunition of all classes. Its imports, although slow over the last year or two, are expected to recover over the next couple of years. However, the arms trade continues to be affected by cuts to the defence budget.