GREECE ANNOUNCES 15 PERCENT CUT IN MILITARY

UNCLAS ATHENS 001574 SIPDIS E.O. 12958: N/A TAGS: PGOV PREL MASS PARM GR SUBJECT: GREECE ANNOUNCES 15 PERCENT CUT IN MILITARY SPENDING IN 2009 ¶1. (U) In a November 14 statement before Parliament, Prime Minister Karamanlis announced he would reduce military spending by 15 percent in the 2009 state budget in a bid to save money. While the revised budget has not yet been sent to Parliament, Karamanlis indicated the funds would instead be used to fund (unspecified) social programs in response to the growing concern about the impact of the global economic crisis on the Greek population. Karamanlis stated that Greece's defense expenditures now amounted to less than 3 percentage points of GDP (6-10 billion dollars estimated). He also noted that the defense expenditures of Greece's neighbors approach 5 percentage points of GDP, a fact he said could not be ignored. Karamanlis did not specifically address whether the cut would be applied equally across all defense programs or whether specific defense programs would be targeted. ¶2. (SBU) Many observers expect Greece to make a major fighter aircraft acquisition during the first half of 2009. Though no decisions have been made, according to the local Aviation Lockhead Martin representative, this reduction in the defense budget could favor the purchase of additional F-16s. The Hellenic Air Force (HAF) has an operational near term requirement for 30-40 fighter aircraft. It is the view of the local Lockheed Martin representative that the F-16 is the most likely candidate for the interim/near term solution from an operational and cost effective point of view. European weapons such as the Eurofighter and the Rafale will be difficult to justify and support, given that Greece would incur substantial costs associated with operating a new model of fighter aircraft. ¶3. (U) In a debate in Parliament, Radical Left Coalition (SYRIZA) Parliamentary leader Alavanos suggested that defense spending should be cut by 50 percent. Karamanlis rebuffed this suggestion stating as long as Greece faces a potential threat from Turkey, it would be unable to cut back farther. Leading opposition PASOK party representatives stated that they support the proposed decrease in the defense budget. SPECKHARD