Leadership: Greece Takes A Bath

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July 11, 2013: The Greek defense budget is taking a major beating because of the economic crises the country has been suffering for the last few years. The latest cuts are the most severe so far, with some 40 percent of headquarters personnel and facilities going away. Some 20 percent of admirals and generals will be retired and not replaced. Two corps headquarters are shutting down and up to a quarter of units are being disbanded, including about half of air force combat units. A lot of these cuts are long overdue because they mainly eliminate unneeded operations that exist mainly because of corruption in the military. 

All this is the result of over a decade of Greece spending a lot of borrowed money it could not afford to repay. Greece had increased military spending 51 percent between 2002 and 2009. Eventually, this scam ran out of borrowers and the Greek government was forced to dramatically slash spending. This hit the military particularly hard. For decades Greece spent more on defense than most other European nations because of the imagined possibility of another war with Turkey. The last such conflict was in the 1920s, and memories are long regarding such matters. The Turks were less concerned about this and thought the Greeks were slightly mad to think there would be another war with Turkey. Once forced to confront the reality of the situation, many Greeks agreed that the defense cuts were not going to do any real damage. Until two years ago Greece spent 2.6 percent of GDP on defense, compared to 1.6 percent for the rest of Europe. That came to over $10 billion a year. Now it is headed for less than half that. Cuts had to be made because the money was simply not there to support the old system.

It turns out that such sharp cuts won’t be as damaging as first thought. That’s because corruption was as rampant in the military as it was in the rest of Greek society. As military leaders were ordered to find ways to do more with less, some brought up (quietly at first) the many forms of political corruption that increased the cost of running the military without doing anything for maintaining combat power. Plundering the military budget is an ancient tradition worldwide and Greeks have written accounts of it going back thousands of years. A lot of the waste was easily fixed, as it often involves buying goods or services at inflated prices. Many unneeded units (especially headquarters) were established mainly to provide jobs. Whether politicians will be willing to give up these benefits remains to be seen. But with the troops taking hefty cuts in pay and benefits, the less heavily armed politicians might be persuaded to let go.

 


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