Turkey can now play an important role in mitigating the factors that led to the economic recession in Greece. Most analysts believe the primary reason behind Greece's severe economic crisis was its heavy military spending to contain the threat posed by Turkey. Turkish Foreign Minister Ahmet Davutoğlu, speaking after a meeting with Greek Alternate Foreign Minister Dimitris Droutsas last week, said there would be no need for arms spending if the two neighbors work to build a "common future."
Greece, the country with the highest military expenditure to gross domestic product (GDP) ratio in Europe, has in a sense become a victim of its arms race with Turkey. In 2000 Turkey devoted $16.4 billion to its military spending, while that figure was $8.7 billion for Greece in the same year. In 2003 Turkey's military spending stood at $13.4 billion, compared to $8.5 million in Greece. Per capita defense spending in Turkey was around $164 on average in the 2000s, while this number never went below $709 in Greece.
Turkey's military spending gradually declined and fell to $11.6 billion in 2008, while Greece's military expenditures consistently increased, reaching $9.7 billion in the same year. Speaking about Greece's military spending and its connection to the financial crisis, International Crisis Group (ICG) Turkey analyst Hugh Pope said reports of large German sales of armaments to both Turkey and Greece illustrate a phenomenon -- which he says is most likely just coincidental -- that the German policy of excluding Turkey from the EU has contributed to tensions between Turkey and Greece, from which the German arms industry has then profited.
“Although the January trip to Turkey by German Foreign Minister Guido Westerwelle has done much to improve the climate, past statements by German politicians have left the impression that Germany opposes Turkey's EU membership, which frustrates Turkey and feeds tensions between Turkey and Greece,” Pope stressed.
An additional paradox is that Germany is also doing its best to help Greece emerge from the financial crisis as its partner in the EU, while one of the contributing reasons for that crisis is the fact that Greece's per capita military spending is higher than the average of NATO member countries. According to Pope, fear of Turkey is one of the main reasons why Greece spends large amounts on its military.
According to the Deutschlandfunk radio station, Greece buys 31 percent of its arms from Germany. This is a high figure considering that Greece ranks fifth among arms buyers in the world.
Speaking in an interview with The New York Times in Brussels in late March, Turkey's chief negotiator for EU talks, Egemen Bağış, said that to help Greece escape its “economic disaster” and reduce regional tensions, Ankara would reciprocate if the Greeks froze or cut defense procurement. “One of the reasons for the economic crisis in Greece is because of their attempt to compete with Turkey in terms of defense expenditures,” Bağış said.
“Even those countries that are trying to help Greece at this time of difficulty are offering to sell them new military equipment,” he added. “Greece doesn't need new tanks or missiles or submarines or fighter planes, neither does Turkey. It's time to cut military expenditure throughout the world, but especially between Turkey and Greece. Neither Greece nor Turkey needs German or French submarines,” Bağış said in the interview.
Last December, when the EU told Athens that it should reduce its arms expenditures to get its budget deficit under control, Greek officials responded by saying they could only start such a significant reduction only after a period of three years had elapsed due to tension with Turkey in the Aegean Sea. Athens also says it cannot abandon the previous government's order for six French FREMM multipurpose frigates worth 2.5 billion euros, despite its budget woes.
“The Greek prime minister was clear in stating that he regards the continental shelf as the issue to be discussed with Erdoğan. No other issue can be taken up at a high political level at this moment in time. The Greek government would, of course, welcome an agreement by the two sides on issues such as the dogfights in the Aegean, which are costly in human and economic terms. However, substantial progress on such an issue cannot be expected in the current conjuncture characterized by political instability in Turkey and the economic crisis in Greece,” Dimitris Tsarouhas, assistant professor of European politics at Bilkent University, said while speaking with Sunday's Zaman.
Noting that the Greek government has announced a defense budget of 6 billion euros for 2010 (it was 6.6 billion euros in the previous year), part of the cuts in response to the crisis, Sam Perlo-Freeman, a senior researcher of the Military Expenditure and Arms Production Programme at the Stockholm International Peace Research Institute (SIPRI), said Greek military expenditure, according to SIPRI estimates, is by far the highest as a share of GDP of all European Union countries.
“This is unquestionably due to the continuing tensions with Turkey over Cyprus and the Aegean,” Perlo-Freeman said. The expert noted that generally, statistical studies have failed to find a direct connection between changes in Greek and Turkish military spending -- a typical “arms race” pattern – and that, for example, between 1999-2008, Turkish military spending was generally going down, while Greece's was generally going up. But the high relative level of Greek spending certainly relates to Turkey. “Improved relations with Turkey could therefore be expected to lead to a reduction in Greek military spending,” Perlo-Freeman stated.
Commenting on the benefits of military spending, Perlo-Freeman said it may create economic benefits if it is necessary to provide the level of security needed for investment -- but if the source of insecurity is removed, through cooperation with Turkey, for example, then there is no longer any potential economic benefit from military spending.