Alexandros Tarkas: Commission impedes Greek armaments programs – Some see German proding

The Commission is making an unprecedented intervention in Greece’s national security policy, sending a written request to Athens to submit data on the investment-industrial part of the Air Force and Navy programs, before launching proceedings in the European Court of Justice.

The letter, written a fortnight ago by the European Commission’s Directorate-General for Defense Industry, focuses on the compensatory benefit programs of upgrading F-16 fighters and Belh@rra frigate industrial partnerships.

However, according to credible sources in Brussels, the letter is only the beginning of a series of interventions in Greek armaments programs, in the midst of the escalating crisis with Turkey. In this context, all the initiatives in the field of defense procurement and investments are already being examined, undermining the planning of the PM’s office and the Ministry of National Defense, in two other chapters:

• First, regarding the transfer of ownership of the Elefsina Shipyards, for which the government does not wish to announce a public tender, relying on the support of the DFC American investment firm. The Greek side had requested, in mid-September, from the CEO of DFC, Adam Boiler, to complete the procedures by October 31, 2020, without a relevant response.

• Second, regarding the possibility of direct assignment and signing of a transnational agreement with the USA for the supply of four new frigates and the modernization of older surface units of the Greek Fleet. The specific suggestion of the General Staff of the Navy de facto overturns the public announcement of the Prime Minister Kyriakos Mitsotakis for the announcement of an international tender for the supply of frigates that would attract the interest of at least five countries.

Within the “limits” of the Treaties

According to the same sources, the Commission, at this stage, wishes to receive information on all aspects of the agreement of the Ministry of Defense with Lockheed Martin for the upgrade of 84 F-16 fighters (LOA GR-D-SNY program). The total cost of the program is $ 1.58 billion, including, in addition to the work in state-owned HAI, the participation of Greek private companies and Lockheed Martin’s contribution to the development of industrial programs. The Commission’s letter, however, uses the term “compensatory benefits” which have been abolished under a 2009 European Directive and a 2011 Greek law, without taking into account that the current government has adapted to the new conditions.

Decisions on modernization and consequent industrial “benefits” were taken within the limits of Article 346 of the EU Operational Treaty. This article allows the Member States to take measures to protect their essential national interests in defense procurement overlooking certain provisions concerning competition.

At the same time, a special impression is caused by the criticism and the initiation of a preliminary procedure by the Commission against Greece with reference to a “selected supplier” of two Belh@rra frigates, naming the French Naval Group. The Commission ignores the fact that the Greek government did not finally sign a contract with the Naval Group, essentially proceeding with a judgment – of older – government intentions.

Legal violations

Because, as it is publicly known, Kyriakos Mitsotakis canceled, at the beginning of September, the twin plan for the supply of Belh@rra and the signing of an agreement of “Strategic Cooperation on Security Issues” with France, which also provided for a mutual assistance clause. That is why it is not possible to ask the Greek government to give explanations after so many weeks for a non-existent contract.

Besides, the Naval Group itself cooperated directly with Greek private companies without the involvement of the Ministries of National Defense and Finance. It is unclear whether the Commission will “replace”, in another letter, the Naval Group with Dassault, which will supply Rafale fighter jets to the Air Force, probably through the French government.

Of course, apart from the purely legal development of the case, the body that initiated the peculiar process against Greece, burdening the government’s relations with the EU and its negotiations with major companies in the international defense industry, is a crucial issue.

The Commission is known to investigate possible legal breaches by its Member States either ex officio or following complaints from legal entities and natural persons. The letter does not disclose whether there was a complaint or not. It is perhaps strange that for Lockheed Martin reference is made to “information available to the Commission”, without specifying its origin, while for Naval Group the wording “publicly available information” is adopted.