Greece defence market: Expenditure on military equipment to reach $9.6bn between 2013-18
Future of the Greek Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018 - a new market research report on companiesandmarkets.com
PR-Inside.com: 2014-04-03 04:57:02
Greece is one of the largest importers of arms in Europe and, of all the EU nations, allocates a high percentage of its GDP for defence purposes, making it one of the most sought after markets for foreign OEMs. Despite the weakness of its financial sector, both the country´s minimal domestic defence capabilities and the threat of the Turkish military have driven Greece to continue to invest in defense, with particular focus on fighter jets, submarines, missile systems and armored vehicles. The country primarily imports arms from EU nations and the US, and is assisting in the development of the domestic industry by sub-contracting deals achieved through defence offset obligations.Over the forecast period, the Greek Ministry of Defence (MoD) is estimated to allocate a cumulative of US$9.6 billion for the procurement of military equipment. In 2013, the country invested US$2.6 billion on homeland security (HLS), as part of its alignment with the international guidelines regarding the introduction of the biometric identification of citizens and travelers. Consequently, Greece is expected to make significant acquisitions in order to implement biometric profiling. The forecast period opportunities for foreign OEMs include the provision of fighter jets, jet trainers, armored vehicles, missile systems and maritime patrol aircraft.Greece is involved in a long standing territorial dispute with Turkey, over the Cyprus region and a maritime boundary in the Gulf of Aegean. The Air Forces conduct drills in each other´s airspace and the situation has twice nearly escalated in to an armed conflict. A significant differentiating factor in the arms race between these two countries is that Turkey is in an economically stronger position than Greece, and is therefore able to fund an increased level of acquisitions. In contrast, Greece has a small economy with very high budget deficits, which has resulted in the country´s high level of GDP allocation for defence and this method affects other essential sectors. However, the bailout terms outlined by the IMF and the EU following the country´s financial crisis will force Greece to reduce defence expenditure allocations. While this policy appears logical in the effective reduction of deficit, the simultaneous maintenance of military balance and the successful management of a reduced budget will be a key challenge for the country over the forecast period.Greece and Turkey are involved in a long-standing territorial dispute in the Cyprus region, and are also engaged in a sovereignty rights issue in the Gulf of Aegean. On two occasions during the 1970s, the countries came close to an armed conflict and, consequently their military procurements are much in line with one another. Turkish aircraft often conduct mock drills in the disputed air space over the Gulf of Aegean, which results in Greek forces shadowing the Turkish jets. Historically, Greece´s high levels of weapons procurement have solely been driven by its perception of Turkey as its primary external threat. This perception has also driven the country to maintain one of the highest GDP defence expenditure percentages. The two countries have improved trade and diplomatic relations in recent years; however, both continue to make significant arms imports.Greek arms imports accounted for 4.9% of global arms transferred in 2009, and the country was the largest importer of defence systems in the European and Central Asian region. During 2010-2012, the debt crisis and restrictions imposed by the EU impacted the country´s defence imports. High defence imports in 2009 were fuelled by both the license to purchase four German Type-214 submarines worth US$2.5 billion, to be assembled in Greek shipyards, and the purchase of F-16C Block-50/52 fighter jets from the US, worth US$2 billion.
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