Greek Defense Expenditure Highest Among EU Nations

Greece and Turkey not only share a long-standing territorial dispute involving Cyprus, but are also engaged in a maritime border dispute in the Gulf of Aegean. The situation has nearly escalated to an armed conflict twice, and is historically the driving factor behind Greek defense procurements. The country's lack of domestic defense capabilities and the extensive capabilities of the Turkish military have driven Greece to procure sophisticated defense systems from foreign OEMs in order to strengthen the country's strategic assets and protect critical infrastructure. During 2005-2010, Greece accounted for 4% of global arms imports, making it the fifth-largest arms importer globally. As a percentage of GDP, the country is expected to reduce its defense expenditure over the forecast period, from the 2010 level of 2.8%, to 1.9% by 2016. The total defense expenditure for the forecast period is projected to increase, and in accordance with its commitment to the protection of civilians and critical infrastructure, Greece is expected to allocate an average per capita defense expenditure of that equals the highest in Europe. Over the forecast period arms procurement is forecast to correspond to 28% of the country's total defense expenditure. The remaining 72% is forecast to be invested in the training of the Hellenic Armed Forces, the MRO activities of existing defense systems and the salaries and pensions of military personnel. The Greek Defense Industry to 2016 provides detailed analysis of the current industry size and growth expectations from 2011 to 2016, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides detailed understanding of emerging opportunities in specific areas. Comment related to the graph: As a percentage of GDP, Greek defense expenditure is the highest among EU nations. In 2004, defense expenditure as a percentage of GDP stood at 2.3% and maintained a higher level than the EU recommended 2%. Despite increasing general budget deficits and a GDP contraction in 2009, the country allocated 2.8% of GDP for defense expenditure in the same year. In early 2010, Greece entered a debt crisis and was assisted by both the International Monetary Fund (IMF) and the European Union (EU). According to the conditions of this assistance Greece is required to reduce its budget deficit over the forecast period and as such is expected to decrease its defense allocation to 1.9% of GDP by 2016.

Source: ASDReports - Market Research
Date: Dec 21, 2011