Greece is the fifth-largest defense importer globally

Wednesday 21 December 2011, Amsterdam

Greece is the fifth-largest defense importer globally
Greece’s total defense expenditure, which valued US$9.26 bn in 2008, decreased at a CAGR of -9.4% during the review period (2008-2012). The country was the fifth-largest global importer of defense systems during 2007–2011, creating lucrative market opportunities for foreign OEMs. On a cumulative basis, the country is forecast to spend a total of US$30.56 bn over the forecast period (2013-2017) on defense and related areas and in the same period, the allocation of funding for the acquisition of military hardware and technology is projected to value US$13.2 bn. Greece’s domestic defense sector has evolved in the fields of assembly and MRO and caters exclusively to the requirements of the Hellenic Armed Forces (reference graph ).

In 2011, Greece allocated 2.0% of its GDP to defense expenditure, a figure that represents the highest GDP allocation among EU members. In addition, the country is the largest importer of arms in the EU region. Defense procurements are structured into five year programs, and frequently the allocated budget for a future five year program is used to pay the debts incurred during the current program, a method that results in escalating defense budget deficits. Greece is currently concentrating on the reduction of defense allocation as a percentage of GDP, in order to reach the recommended EU level of 2%.

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 to armed conflicts. Consequently, the two nations engage in near identical military procurements, and Greece’s position as the largest arms importer in the EU, representing 17% of arms transferred, is seconded by Turkey, accounting for 10%. A significant differentiating factor in the arms race between the 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 defense and this method affects other essential sectors.

In 2004, Greece exported used ships and missiles to Georgia, and as part of EU support initiatives, provided used armored vehicles to Iraq. However, the country has not exported any defense systems during the last seven years. The country’s defense industry primarily manufactures in order to cater to the domestic demand of the Hellenic Armed Forces. As a result of defense expenditure reductions as a consequence of the country’s financial crisis, the defense export market is expected to remain limited over the forecast period due a lack of investment.

The Greek Defense Industry: Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017

The Greek Defense Industry: Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017

Publish date : August 2012
Report code : ASDR-9310
Pages : 130 contact: S. Koomen / ASDMedia BV - Veemkade 356 - 1019HD Amsterdam - The Netherlands
P : +31(0)20 486 1286 - F : +31(0)20 486 0216

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