In complete transparency… A defense budget, a little, preserved
(BRUSSELS2) On Sunday afternoon, the European Commission released - which it had never done before - the document distributed to negotiators on the Greek debt. This text is interesting because it contains the latest proposals agreed between the three institutions (European Commission, European Central Bank and International Monetary Fund). Proposals which take into account the proposals of the Greek authorities of 8, 14, 22 and 25 June 2015 as well as negotiations at political and technical level throughout the week says the Commission.
Debt financing was well in the discussion
« Discussions on this text were in progress with the Greek authorities until Friday evening in view of the Eurogroup on June 27. regret the Commission. “The understanding of each of the parties involved was that this Eurogroup meeting should (correctly) reach an overall agreement for Greece, which would have included not only the measures to be jointly agreed, but would also have addressed future financing needs and the sustainability of Greek debt. Jean-Claude Juncker will also come to explain himself to the press on Monday at 12:45 p.m. in Brussels.
A further cut in the defense budget
In this document (Download here), there are details of the various measures proposed, to which the Greek government had to commit, in order to benefit from an extension of the support program, such as the increase in VAT on catering from 6,5% to 23% in one fell swoop! These include a reduction in the defense budget envelope of 400 million euros, « with a set of targeted actions, including downsizing and public procurement ". That is a cut of about 10% of the budget, which may seem significant.
Stabilizing the defense budget or resuming the reduction, two options
The Greek government simply accepted a reduction of 200 million euros, thus making it possible to return to the figure for previous years (2,2% of GDP in 2013 or 2014), and stabilize the budget at around 4 billion euros. Download the Proposition June 22 Greek
The Greek defense budget - even sharply reduced during the crisis - has held up quite well, to say the least. It thus rose from nearly €6 billion in 2010 to €4,5 billion (in constant prices - 2010), i.e. a drop from 2,8% of GDP to 2,2% (in constant prices - 2010). A figure to be compared to 3,9% of GDP on average in the years 1995-1999.
Comment: one may wonder whether an effort could not be made within NATO and its member states. Because if the Greek army is preserved, it is also (and above all) in the face of the Turkish threat. Also an ally. Should we not provide, as is done over the Baltic territories, joint assistance in the surveillance of Greek waters and airspace? This would thus make a more drastic reduction in the defense budget more legitimate.
(Nicolas Gros-Verheyde)
