european union’s defense in time of austerity: challenges ... · criterion to defence budgets,...

Paperpresentedatthe11thPan–EuropeanConferenceonInternationalRelationsBarcelona,13th–16thSeptember2017

Workinprogress.Pleasedonotquotewithoutcontactingtheauthors.

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EuropeanUnion’sDefenseinTimeofAusterity:ChallengesforSouthernEurope

NunoSeverianoTeixeira&AnaSantosPinto([email protected])

IPRI|NOVAUniversityofLisbon,Portugal

The global economic and financial crisis, which began in 2008, had significant impact onEuropeancountriesandresultedinasubstantialdecreaseindefencebudgets,inthefollowingyears, particularly in Southern Europe countries. This article begins to analyse, in acomparativeperspective,thepoliticaloptionsandtheausteritymeasures’impactinSouthernEuropean countries (Portugal, Spain, Italy and Greece) defence policies, between 2008 and2014, and its potential consequences to European Union’s Common Security and DefencePolicy(CSDP).TakingintoaccountthecurrentdebateonthefuturedevelopmentsofCSDP,itisintended to discuss the potentialities and constraints of the Permanent StructuredCooperation (PESCO) mechanism, provided in the Lisbon Treaty, as well as sub-regionaldefence cooperation solutions, as the Nordic Defence Cooperation (NORDEFCO), and itspossibleapplicabilitytoothersub-regions,suchasSouthernEurope.

Key-words:EuropeanUnion;Defence;Security;CSDP;Crisis

This reserch paper was supported by Portuguese National Funds through the Fundação para aCiênciaeaTecnologia(FCT)intheframeworkoftheproject«UID/CPO/04627/2013».

The global economic and financial crisis, which broke out in 2008, had a significant

impactonEuropeancountriesand,consequently,onitsfiscalandbudgetarydecisions

inthevariouspublicpolicyareas.SecurityandDefencewerenoexception.Despitethe

factthattheinternationalsecuritycontextcontinuestorequireaproperresponsetoa

set of transnational and sub-national risks and threats, between 2008 and 2014 the

majorityofEuropeanstatesdecidedtoadapttheirDefencebudgetstoanenvironment

ofeconomiccrisis,namelybyapplyingausteritymeasurestoitsdefencestructures.



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With decreasing resources but the same (or even growing) needs, all European

countrieswereforcedtothinkonhowtoobtainbetterresultsatanylevelofspending

– personnel, investment and operations/maintenance – and reducing the impact of

major expenditure cuts. This trend has been pursued at two levels: at the national

level,most European countries startedaprocessof adjustments and reformswithin

the defence structure aiming at more efficient organizational arrangements; at the

regional level, through the promotion of a better cooperation between countries,

namelyregardingcommonprojects(includingforcegenerationandinvestment),both

inNATOandEuropeanUnion(EU).

The Atlantic Alliance began, in the late 2000s, a broad debate on a new way to

reconcile a modern generation of military forces, a concept called 'smart defence',

with the aimof encouraging theAllies to promote cooperation in thedevelopment,

acquisitionandmaintenanceofmilitarycapabilities.AttheNATOSummitinChicagoin

May 2012, the concept of 'smart defence' was formally adopted to pursue the

objectivesof 'NATOForces2020'.For theotherhand, since2008, theUnitedStates’

Administrations have been stressing the need for all Allies to meet the 2% GDP

criteriontodefencebudgets,havingthisissueassumedgreaterdiscursiveacuitywith

theTrumpAdministration.

WithintheEuropeanUnioncontext,SecurityandDefenceissuesrecentlyreturnedto

the high-level political agenda. In December 2013, the EU’s Heads of State and

Government agreed, under the motto 'defence matters'1, to: i) support the

establishmentofanEUE-GovernmentPolicyFrameworkin2014andanEUMaritime

SafetyStrategy;ii)tocreatecriticalcapacitiesandtofillcriticalgapsthroughconcrete

projectscarriedoutbytheMemberStateswiththesupportoftheEuropeanDefence

Agency (EDA); iii) and to promote a more integrated, sustainable, innovative and

competitive Industrial and Technological Defence Base (BITDE), as well as increased

1 The slogan "European defense matters" was confirmed in the narrative of the Europeaninstitutions by then European Council President, Herman Van Rompuy, in a speech given at theEuropean Defense Agency's (EDA) Annual Conference, (see Van Rompuy, 2013) and wassubsequently adopted in the EuropeanCouncil conclusions of 19December 2013 (see EuropeanCouncil,2013:2).



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investment in defence research and technology (R&T), through close cooperation

between the European Commission (responsible for Horizon 2020), EDA and the

Member States (European Council, 2013). Following this political commitment, a

reviewoftheprogressachievedattheEuropeanCouncilmeetingon25and26June

2015wascarriedout.Atthattime,theEU’sHeadsofStateandGovernmentrequested

the High Representativeof the Union for Foreign Affairs and Security Policy to

continue with the strategic reflection process regarding the elaboration of a

comprehensive EU strategy in the field of foreign and security policy. This process

wouldculminatewiththepresentationoftheEuropeanUnionGlobalStrategy,inJune

2016.

On the topic of civilian and military capabilities development and industry

strengtheningtheEuropeanCounciladvisedMemberStatesto"provideforasufficient

level of defence expenditure and the need to use resources most effectively"

(European Council, 2015: 6), as well as the EU to ensure adequate funding "for

preparatory actions for research” in the area of the Common Security and Defence

Policy (CSDP), "paving the way for an eventual future research and technology

program in the field of defence" (European Council, 2015: 6). Added to these

commitments is the encouragement of more and more systematic European

cooperationinthefieldofdefence,inparticularbypromotingtheconceptof“pooling

andsharing”2withintheframeworkoftheEuropeanDefenceAgency(EDA)3.

These developments reveal a positive trend at the technical level, with the

identificationandtimingofareasforaction,althoughthesameisnothappening–at

leastatthesamespeed–atthepoliticallevel,whereMemberStatesremainreluctant

inmakingmajorprogresses.

2AccordingtotheEuropeanDefenseAgency(EDA),theconceptof'poolingandsharing'referstoinitiativesandprojectstopoolandsharemilitarycapabilitiesbetweenEUMemberStates(seeEDA,s.d-a).3 These guidelineshavebeen reflected in the latest developments in EuropeanDefense, namelythe creation of the European Defense Fund and the political debate on the designing of aPermanentStructuredCooperation(PESCO).Sincethisarticleisbasedonaongoinginvestigation,itisnotyetpossibletoproduceasufficientlyconsolidatedanalysisonthissubject



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Withregardtodefencebudgets,totalmilitaryexpenditures inEuropein2014–year

thatmarks the ‘beginningof theend’of theeconomicand financial crisis–was391

billion dollars. An amount that remained virtually unchanged, in real terms, when

comparedto2010,whenitstoodat394billiondollars(SIPRI,2015:sn).

Fromacomparativepointofview, it shouldbenoted that two-thirdsofCentraland

Western Europe countries have decreased theirmilitary expenditure between 2008

and2014.Atnationallevel,defencebudgetdevelopmentsintheEuropeancontinent

canbedividedintothreegroups,whichcorrespondtothreemajortrends.

Thefirstisconcernedtocountriesthathaveincreasedmilitaryexpendituresasaresult

ofmaintainingafavourableeconomicenvironment.This isthecaseofPoland,which

between2008and2014increaseditsmilitaryexpenditureby12%,seekingtoexpand

the number of deployable forces and to become a more active participant in

internationalmissions,inparticularwithinNATO.Inthesameperiod,othercountries

also increasedthefundsavailable indefencebudgets,suchasTurkey(33%),Norway

(15%)andSweden(9%)(seeSIPRI,2012,SIPRI,2015).

AsecondtrendconcernstothethreemajordefencespendersinWesternEurope–the

UnitedKingdom,FranceandGermany– thathavemade small reductions inmilitary

spendingbetween2008and2014,ineachcasebylessthan5%inrealterms.However,

internal changes in defence public policy guidelines had been made. In 2010, the

United Kingdom presented its Strategic Defence and Security Review (SDSR) (UK

Cabinet Office, 2010) and planned to reduce its defence budget by 7.5% over four

years,although inpractice thecutsmayhavebeendeeper.Germanyplannedtocut

around10%initsmilitaryexpenditureuntil2015,comparedto2011(GermanMinistry

ofDefence,2011).AndFrance,whichpresented itsWhitePaperonDefence in2013

(Ministère de la Défense de la Republique Française, 2013), planned to maintain

roughlyconstantspendinginrealterms.

Finally, a third trend corresponds to the Southern European countries, which have

madethe largestcutsandsignificantlyreducedtheirdefencebudgetsbetween2008



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and2014,withparticularlargedecreasesinGreece(-42%),Spain(-19.6%)andItaly(-

15.8%)(IISS,2014,p.63).

Although the budgetary constraints, the added value of EU-28 member-states,

between2008and2014,was still oneof the largestdefence spending in theworld.

EvenifmostEuropeancountriesspent–priortotheeconomiccrisis–lessthan2%of

theirGDPondefence4.

DefencespendinginSouthernEurope

In the context of the so called ‘Euro crisis’, the Southern European countries were

amongthemosthardlyaffected.They faced, first, serioussovereignproblems in the

wake of the banking crisis and a long period of economic recessions. Like Ireland,

Portugal and Greecewere forced to ask for international financial assistance. Spain

and Italy were not formally obliged to apply for it, but all these four Southern

European countries faced very similar problems: high deficits, rising debts anddeep

economic recessions. To fulfil the terms of the bailouts, or simply to restore the

markets’ confidence, all these countries took fiscal consolidationpolicies as the first

priorityandapprovedharshausteritymeasures.Theseausterityprogramshaveheavily

affectednotonlytheWelfareState,butalsofunctionsofsovereigntyincluding,above

all,Defence.

Since 2008,military expenditures show a significant decrease in southern European

countries,wherethecutsreachedthehighestlevelsinEurope.Thistrendhadobvious

effects on themost important sectors of theDefenceMinistries and Armed Forces:

personnel,investment5anddeployment.

4We should recall that all NATOmembers are committed in spending, at least, 2% of their GDP inmilitary expenditure. This commitment was further strengthened at the NATO summit in Wales inSeptember2014wheretheAlliesdeclaredtheirintention"toavoidanydeclineindefensespending"(cf.NATO,2014)5 The investment topic, in national budgets for theDefense, includesnotonly equipment acquisitionandResearch&Development,butalsomodernizationprocessesforequipmentalreadyinuse.



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Table1-DefenseexpendituresinthecountriesofSouthernEurope(constantprices,

millionsofdollars)

2006 2007 2008 2009 2010 2011 2012 2013 2014

Greece 7607 8533 10574 10641 8164 7129 5915 6022 5318*

Italy 33408 35962* 41244* 38301* 36032 38130 33733 33892 30909

Portugal 4067 4366 4812 4950 4719 4904 4137 4783 4201*

Spain 14434 16724 18686 16943 14743 13983 13912 12607 12732

Source:SIPRI2015.*ValuesestimatedbySIPRI.

Despitethisgeneraltrend,itshouldbenotedthatthepoliticalandbudgetaryoptions

inthedifferentSouthernEuropeancountrieshavenotbeenhomogeneous.Amongthe

reasonsthatcanjustifyitistheweightthatthedefenceindustrieshaveinthenational

economiesofItalyandSpain,comparedwithPortugalandGreece.TheItaliandefence

industrysectorthefourthlargestinEuropeandthefifthmostsignificantintheworld

(SIPRI,2012:248),withFinmeccanica6–thelargestdefencecompanyinthecountry–

having a total of 21,292 million dollars of average annual sales and about 64,000

workers (SIPRI, 2013). The defence industrial base in Spain is the tenth on a global

scaleandthesixthontheEuropeanlevel(SIPRI,2012:248),withemphasisonthefact

thatthecountryhashostedtheEADS7consortium.

Inthiscontext,anysignificantcutindefenceinvestmentprojectsinItalyorSpainwill

havedirecteffectsontheirnationaleconomiesand,consequently,willaggravatethe

internaleconomiccrisisenvironment.AlthoughallSouthernEuropeancountrieshave6AccordingtotheSIPRITop100forthearmamentindustry(SIPRI,2017),sixoftheworld's100largestdefense companies are found in Italy: Finmeccanica, Agusta Westland, Selex, Alenia Aeronatica,FincantieriandIVECO.7 The designation EADS (European Aeronautic Defense and Space Company) was maintained untilDecember 2013. After this date, and following an internal reorganization, the group assumed thedesignation Airbus (until then company subsidiary of EADS) and created Airbus Defense and Space,focusedonaerospace,defenseandmilitaryaviation.



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made generalized cuts in military spending, the defence industry’s relevance in

nationaleconomiesmayexplainwhythegovernmentsofSpainandItalypreferredto

reduce,infirstinstance,thepersonnelandoperation/maintenancebudgetdimensions

and,afterwards,only insomeinvestmentprograms.PortugalandGreecehavemade

significantcutsacrossalldimensionsofdefencebudgets.

The same reason canalsoexplainwhy these countrieshavedifferent approaches to

international cooperation on defence industries’ initiatives. Italy and Spain can use

their industrial base to participate and lead transnational cooperation projects,

whether within the framework of the EU or NATO, while Portugal and Greece are

limited to potential niches of expertise. These differences, which support political

decision-making in a context of budgetary constraints, can also be important in

shapingeachcountry'sinternationalsecurityanddefencestrategies.

Portugal

Since2005,and throughout theeconomicand financial crisis’period,Portugalhada

relatively stable defence expenditure, ranging from 4,039million dollars in 2005 to

4,200 million dollars in 2014 (SIPRI, 2015).8 Between 2008 and 2011, military

expendituresgrew,albeitmildly,toanaverageofabout4.85billiondollars.Sincethen,

however, and with the country on strong fiscal containment measures, military

spendinghasdeclinedbyabout11%overtheperiod2011to2014(seeTable1).

8Methodological note: considering the available information that could be supportedby a national/annualcomparativeanalysis,coveringallthecountriesofSouthernEurope,itwasdecidedtousethreedifferent sources, each with different methodological criteria: as regards the budgetary dimension/defense costs, itwasused thedata collectedbySIPRI andNATO,which include informationbetween2008and2014;thedatacollectedbytheEuropeanDefenseAgency(EDA),whichincludesinformationbetween 2008 and 2014 (see EDA, s.d. - b) was used for the investment and number of militarypersonneloftheArmedForces;inrelationtothenumberofmilitarypersonnelininternationalmissions,itwasused thedataavailable inTheMilitaryBalance,which includes informationbetween2008and2014,areused (see IISS,2014:493-500). It is considered that, in thisway, the criteriaunderlying thecomparativeanalysisareguaranteed,sinceforeachindicatorthesamesourcesareused,aswellasthepluralityofavailableresources(stateandnon-governmental).



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Thesecutshadimmediateconsequencesaspartoftheprocessofstate’spolicyreform

inthedefensesector(Teixeira,2013)andthePortuguesegovernmentlaunchedanew

reformforDefenseandArmedForcescalled'Defesa2020'.

Regardingpersonnel, in2003,whenPortugalmovedfromaconscriptionsystemtoa

professionalizedsystem,thehumanresourcesof thePortugueseArmedForceswere

substantially reduced. In 2008, there were around 38,000 military personnel in the

threebranchesoftheArmedForces(seeTable2),accountingforabout72%ofmilitary

expenditures(NATO,2010:8).By2013,thenumberoftroopsinthePortugueseArmed

Forceshadbeenreducedtoaround33,000(seeTable2),representing80%ofdefence

costs(NATO,2015:8).

In order to optimize the budgetary structure in the defence sector, and taking into

accountthedefined levelofambition, thecurrentreform('Defesa2020')pointstoa

total of 30 to 32 thousandmilitary personnel, including those in the reserve and in

serviceeffectiveness(MinistériodaDefesaNacional,sd:3).

Asregards investment, therewasalsoadecrease: from344millioneuros in2008to

296millioneurosin2010(seeTable2).Thisreductionmeansadropof14%to11%of

totalmilitaryspending(EDA,2011:9;EDA2012:17).Thistendencytendstoworse.In

the following years, so that theMinistry ofDefense couldmeet both thebudgetary

targetsandthecommitmentsmadewithsuppliers,itwasforcedtofindasolutionto

the ongoing equipment modernization programs: negotiate the postponement of

paymentstosuppliers;freezeorsuspendsomeprograms,someofwhicharealready

under way, such as NH90 helicopters or PANDUR armoured vehicles. It should be

notedthat, in2013,theamountavailablefor investment indefencewasaround260

millioneuros(seeTable2),whichrepresented10%oftotalmilitaryexpenditure(EDA,

2015:28).

Finally, cuts also had negative effects at the operational level, namely in the

participationofthePortugueseArmedForcesininternationalmissions.Despiteslight



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fluctuations, there is a downward trend in the projection of Outstanding National

Forces,similartowhathappensinothercountriesinSouthEurope.In2008,Portugal

had a total of around 700 military personnel in international missions. reduced to

around 550 in 2010 (see Table 2). Already in 2012, with the withdrawal of UNIFIL

(Lebanon)anda reductionof around50% in ISAF (Afghanistan), itwasoffsetby the

presence of the Portuguese Navy at EUNAVFOR Atalanta. In 2013 the Portuguese

presenceininternationalmilitaryforceswasaround350(IISS,2014:130).

Table2–PortugalSelectedDefenceIndicators

2006 2007 2008 2009 2010 2011 2012 2013 2014

NumberinArmedForces 37577 40855 37346 39568 38927 35254 33446 32947

30302

Investment(million€) 157 289 344 364 296 305 255 260

345

Mil.Pers.inInt.Missions 822 696 692 680 549 836 468 349

247

Source:Informationgatheredbytheauthors;cf,footnote8.

Spain



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AmongallcountriesofSouthernEurope,Spainistheonethatshowsalargerandmore

abruptreductionofthemilitaryexpenditures. Itshouldbepointedoutthatbetween

2000 and 2008, under a period of economic growth, Spain developed a policy of

internationalstandingandincreased,exponentially,itsmilitaryspendinginabout29%,

being one of the biggest inWestern Europe. The economic crisis, however, had an

immediate impact on the defence expenditure, and between 2008 and 2011 the

expense decreased about 19.6%, whichmeans 1% of the Spain’s GDP (SIPRI, 2012:

178).

Since 2008 these cuts had strong consequences on theMinistry ofDefence and the

ArmedForces.Theseconsequenceswere,firstofall,onpersonnel:thereductionstarts

by thecivilianpersonnelof theMinistryofDefenceandArmedForcesbranchesand

thenextendstothemilitary.Thepersonnelexpenditureshaveagrowingweightinthe

Defence budget,which represented, in 2014, 67%of the totalmilitary expenditures

(NATO,2015,p.8).

In2008thetotalnumberinArmedForcesreached137,800troopsandin2012fallen

to124,561.Thisreductiontrendcontinuesinthefollowingyears,openinganon-going

debate on reducing manpower, in accordance with the necessary adjustments

regardingthechangesintheforcestructure(IISS,2013,p.95).

Secondly, the cuts have consequences on investment. Spain launched, in 2000, an

ambitiousmilitarymodernizationprogramwith19newequipmentprograms for the

threebranchesof theArmedForces. Since thebeginningof the crisis, however, the

cuts imposed a downward trend in investment, which in 2008was of 2,850million

eurosand,in2011,wasalreadyabout750millioneuros,recoveringin2012.Thecuts

haveimposedheavyrestrictionsoncompliancewiththemodernizationprogramsand

its financial commitments, amounting to 26 billion euros (SIPRI, 2012, p.78). The

solution found by the Spanish Ministry of Defence was, on the one hand, to

restructure debts to arms suppliers and, on the other, to freeze or delay some

programs(Typhoonaircraft;A400Mtransportaircraft)(IISS,2013,p.95).



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Finally, the spending cutshave consequenceson themilitaryoperationaldimension,

with a reduction of the overseas deployment and the commitment of the Spanish

Armed Forces in international peacekeeping missions, either in NATO, EU and UN

framework.Spainreachedamaximumof3,400militarydeployedin2006;in2008had

about 3,000 troops abroad and, in 2012, had about 2,700 military in international

missions. This trend continued with the withdrawal of the contingent in UNIFIL

(Lebanon) and the planned withdrawal from ISAF (Afghanistan). In 2013, Spain

recorded1270militarypersonnelininternationalmissions(IISS,2014:141)

Table3–SpainSelectedDefenceIndicators

2006 2007 2008 2009 2010 2011 2012 2013 2014

Number in

ArmedForces 127000 132400 137800 136000 129723 126924 124561 121805

121848

Investment

(million€) 2544 2644 2851 2208 1427 753 2532 1229

1333

Mil. Pers. in

Int.Missions 3400 2762 3026 2378 2660 3088 2765 1269

1042

Source:Informationgatheredbytheauthors;cf,footnote8.

Italy

TheeconomicandfinancialcrisishadadirectimpactontheItaliandefencebudget.It

is estimated thatmilitary expenditures fell by 16% in real terms between 2008 and

2011,with themost significant cuts occurring in the operations/maintenance items,

recruitmentrestrictions,and freezingorpostponingprocurementprograms. In2008,

Italyhadadefencebudgetofsome41244billiondollars(correspondingtoabout1.8%

of GDP); already in 2010 this budget was of 36,032 billion dollars, maintaining the



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corresponding percentage of GDP. By 2014 the Italian defence budget had been

reducedto30.909billiondollars,correspondingto1.5%ofGDP(SIPRI,2015).

Regarding personnel, the Italian Armed Forces, which had 307 000 troops in 2006,

increasedfromaround187000in2008toaround190113in2011(seeTable4).Itcan

be considered thatoneof themost critical issues in the Italiandefence structure is,

precisely,thepersonnelcosts,whichin2008represented70%ofdefenceexpenditure

(NATO, 2010: 8) and in 2011 amounted to 75 % of these costs (NATO, 2015: 8).

However, in 2012, the Italian Government promoted a process of rationalization of

militaryexpenditure,which includedanadditionalcutofsome30,000troopsforthe

nextdecade. In2013,theItalianmilitaryhadatotalof182064troops(seeTable4),

representingacutof40%overthefiguresfor2006,whilemaintaininga75%personnel

costsinthetotalcontextofmilitaryexpenditures(NATO,2015:8).

Inwhatconcernstoinvestment,thereformoftheDefencestructure,proposedbythe

ItalianGovernment, included the postponement of some of the planned equipment

acquisitionprograms.Oneexampleisthereductionof131to90ofF-35aircraftunder

a transatlantic cooperation program (Bloomberg, 2012). In 2008, Italy's defence

investmentamountedto3,303millioneuros,fallingto2,546millioneurosin2011(see

Table4),whichrepresentedadecreaseofaround23%.

Finally, regarding international missions, Italy has tried to keep the commitments

made between 2008 and 2012, corresponding to an average of 6,700 military

personnelinpeaceoperations(seeTable4),whichhasbeenreducedtoaround4,700

in2013(IISS,2014:113).

Table4–ItalySelectedDefenceIndicators



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2006 2007 2008 2009 2010 2011 2012 2013 2014

Number in

Armed

Forces

307000 195268 186956 192186 191231 190113 184318 182064 183465

Investment

(million€)2351 2936 3302 2545 3140 2546 1828 2512 2058

Mil. Pers. in

Int.

Missions

6748 7951 5047 7884 6790 7744 6512 4723 3832

Greece

Over the last few decades Greece had the highest share of GDP allocated to the

defencebudgetamongEUMemberStates,alwaysabove2%(SIPRI,2015).In2008,it

hadadefenceexpenditureofaround10,500billiondollars,and in2011thisamount

hadbeenreducedto7,129billiondollars(seeTable1),whichrepresentsadecreaseof

about30%.

Given the importance attached to the defence budget, the particular geostrategic

context of the country contributes greatly. With longstanding tensions with Turkey

(althoughrelationsbetweenthetwocountrieshaveimprovedinrecentyears),Greece

occupies a strategic position in the Mediterranean - with an extensive Exclusive

EconomicZone(EEZ)andtheneedtocontrolhundredsofislandsandporousborders,

particularly sensitive to organized crime and illegal immigration - and the need to

promotestabilityintheBalkans,theBlackSeaandtheEasternMediterranean.



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Greece's defence budget in 2014 was estimated to be 5,318 billion dollars (SIPRI,

2015),areductionofabout50%comparedto2008figures,asaresultoftheausterity

planimplementedinthecontextoftheeconomicandfinancialcrisis.

With regard to personnel, the Greek Armed Forces are in the process of being

restructured.Thedefinitionofthecutstobeimplementedbeganwiththeapprovalin

2003 of a new force structure for 2005-2020, with a reduction to 142,000 military

personnel, inparticular intheArmy.However,thedefinitionoftheforcestructure is

reviewedeveryfiveyearsandadditionalcutshavebeendefined,withthenumberof

troops in 2008 being 133,775 military personnel and, in 2013, 108,874 military

personnel (see Table 5). On average, between 2010 and 2014, 73% of the defence

budgetwasdedicatedtostaffcosts(NATO,2015:8). Inaddition,civilianandmilitary

personnel in the service of the Armed Forces accounted for 2.4% of the total

workforce in the country in 2014 (NATO, 2015: 10), and the expenditure for each

militaryagainstthetotalGreekeconomyisthehighestintheEUcomparativepicture.

In terms of investment, between 2003 and 2007, Greece was among the world's

largestimportersofarmaments,followingChina,IndiaandtheUnitedArabEmirates.

The acquisition of newequipment byGreecewas particularly high compared to the

otherEUMemberStates (around30%of thetotaldefensebudget),withFranceand

Germanybeingthemainsuppliers.TheArmamentAcquisitionPlanfor2011-2015saw

areductionofabout70%,comparedwiththeprojected2006-2020(SIPRI,2012:176)

outlook,thoughrevised.Thus,GreecemovesfromadefenseinvestmentofEUR2140

millionin2008toEUR482millionin2013(seeTable5),whichrepresentsareduction

ofalmost80%intheamountavailable.

Withregardtointernationalmissions,thenumberofmilitarydetachmentsabroadwas

alsoreducedfrom2427personnelin2008to1134in2013(seeTable5).Itshouldbe

noted that the largestGreekmilitary continent is stationed inCyprus, ina total that

decreased from 1500 military until 2011 to the current 950 (IISS, 2014: 106). In

addition,Greecehasbeenreducingthenumberoftroopsindetachednationalforces,

notablyinISAF(Afghanistan,from157in2008to3in2013),EUFOR(Bosniaand2007



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to25 in2012),KFOR (Kosovo, from744military in2008 to120 in2013)andUNIFIL

(Lebanon,from192militaryin2008to57in2013).

Table5–GreeceSelectedDefenceIndicators

2006 2007 2008 2009 2010 2011 2012 2013 2014

Number in

Armed

Forces

138994 134759 133775 133385 124266 116970 109070 108874 113517

Investment

(million€)1500 1707 2140 2133 1148 300 327 482 321

Mil. Pers. in

Int.Missions3141 2313 2427 1985 2065 1920 1320 1134 613

Accordingtothisbriefanalysis,between2008and2014therehasbeenageneralcut

in defence spending in the South European countries, in a trend resulting from the

internationaleconomiccrisisenvironmentandtheapplicationofaseriesofausterity

measures by the governments. This decrease had implications not only in terms of

humanresources,butalsoreflectedinadeclineininvestment–withconsequencesfor

themodernizationandacquisitionofnewequipmentandcapabilities–andthedecline

intheparticipationoftheseStatesininternationalmilitarymissions.

Given that the trend identified will not change significantly in the short term, it is

possible to anticipate consequences at two levels. At the national level, through a

more parsimonious definition of security and defence priorities, considering the

identificationofstrategicobjectivesandinitiativesofinternationalcooperation,either

intermsofgenerationofforcesorinvestmentprojects.Attheinternationallevel,they

limit the willingness of the countries of South Europe to make international



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commitments in the organizations inwhich they participate (namelyUN, NATO and

EU),withobvious consequences for their roleasproducersof international security.

This latter option will have more serious consequences when considering the

challengesandthreatsidentifiedonthesouthernshoresoftheMediterranean,aswell

as organized crime and trafficking of various kinds, notably in North Africa and the

Sahel, or through terrorism and extreme violence, as perpetrated by the self-

proclaimed'IslamicState'.

EUDefencePolicyandChallengestoSouthEuropeanCountries

Despitethenationalspecificities, thefourSouthernEuropeancountriesweresubject

ofausteritypoliciesanddemonstratesimilartrendsintheDefencepublicpolicysector.

Thefirsttrendisthatofdecreasingmilitaryspending.WiththeexceptionofPortugal,

wherethereisaslightdecrease,allthecountriesofSouthernEuropehavesignificantly

reducedtheirmilitaryexpenditureinrealtermsbetween2008and2014(seeTable1).

Thesecondisbasedonageneralreductionincivilianandmilitarypersonnel.Inspite

of the international trend towards a reduction in the number of personnel – as a

result,amongotherreasons,oftechnologicaldevelopments,aswellasmodernization

and adjustments in the structures of forces and hiring of private companies – this

trend is particularly visible in the countries of Southern Europe and it results, it is

understood,fromthecontextofeconomiccrisis.

The third trend is the decline in investment, procurement, and research &

development. All Southern European countries have frozen or suspended some of

theirmodernizationprograms,despitedifferencesbetweencountrieswheredefence

industrieshaveamajor impactonnationaleconomies (ItalyandSpain) and the rest

(PortugalandGreece).



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Finally, the reduction of military personnel in international missions. All of the

countriesofSouthernEuropehavereducedtheircontingentsininternationalmissions,

with consequences for each one's contribution, in particular within NATO and EU,

whilealsolimitingtheirroleasinternationalsecurityproviders.

The economic crisis, austerity, the reduction of military expenditures and political

priorityattributedtothedefencehadsignificantconsequencesatmember-statesand

EUlevel.

At the national level, and namely in Southern European countries, there we can

perceive a persistent promotion of structural reforms in Defence and in the Armed

Forcessector,aimingmaintainthesamelevelofambition,withanoptimizationofthe

resources. This would mean an improvement in the ratio between support and

operationalproductlines,arationalizationofavailableresourcesandamorebalanced

budget structure, by reducing staff costs and increasing funding for investment,

researchanddevelopmentandoperationandmaintenance.

At the European level,with theoverall decreaseof defence expenditures, European

Defencecooperationhas,sinceveryrecently,beenseenasthebetterwaytoimprove

capabilities in any level of spending, particularly regarding investment and force

generation. In termsof investment, thepathchosenby theEUmember-states since

2010, at the Ghent framework, was ‘pooling and sharing’ (cf. Biscop & Coelmont,

2011). This process is based on bilateral or multilateral initiatives among member-

states, but outside the decision-making processes in CSDP framework, as defined in

theLisbonTreaty,namelythe‘permanentstructuredcooperation’(PESCO)(Article42

(6)oftheTreatyonEuropeanUnion).

ThePESCOsolution,inpoliticaldiscussionintheEUCouncilsinceMay2017,seemsto

beasolutiontostrengthentheEuropeanUnion'sdefencedimensionandtopromote

greater political commitment, stronger ties and a more equitable distribution of

responsibilitiesbetweenalltheMemberStatesoftheEuropeanUnion.



18

Another option would be the adoption of sub-regional cooperationmechanisms on

security and defence. Based on the cooperation example developed by Nordic

countries, other EU member-states, particularly those in Southern Europe, could

promote policy discussions on matters such as the joint acquisition of defence

equipment,investmentandresearchpartnershipsanddevelopment,strengtheningof

jointtrainingactionsorevencarryingoutcommonmilitarymissions.Thiswouldresult

inthecreationof'mini-defenceunions'(Ojanen,2014)whichcouldalsopromote,ona

sub-regionalbasis,thestrengtheningoftheDefenceEurope.



19

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