The Most Revolutionary Act

Britain's Secretary of State for Defence Philip Hammond

In an effort to reduce its debt burden, Britain plans to cut its defense force by 20% by 2020. In announcing the UK’s plans to cut 102,000 to 82,000 military personnel, Secretary of State for Defence Philip Hammon signaled his intention to withdraw all British troops from Afghanistan by the end of 2014, despite noises Obama is making about extending the occupation. Exorbitant military spending is responsible for a considerable chunk of western debt, and I’m thrilled to see America’s closest ally setting such a sensible example. Obviously no one relishes the prospect of laying off 20,000 troops – especially in an economy that’s already shrinking. However by making major defense cuts, the British government relieves pressure to make further public service cuts. All military spending has a nasty habit of magnifying itself. You can’t deploy troops without investing billions of dollars in jets, drones, helicopters, tanks, humvees and bases, and the vast amount of increasingly expensive oil necessary to run them.

Britain Announces $97 Billion of Quantitative Easing

The defense cuts will go a long way towards financing the new round of quantitative easing (combating a shrinking economy by injecting £50 billion or $97.15 billion of additional money into it) the Bank of England announced yesterday. The goal: to provide a cash infusion to increase business expansion and jobs creation. This seems a far more humane and financially prudent way to increase jobs than sending more young men and women to die in the Middle East

“New” Labour Favors Bloated Defense Budgets

The two main critics of Britain’s impending defense cuts are its top military brass and – in the tradition of George W Bush’s favorite pet poodle Tony Blair – the Labour Party. In my view Labour has made an extremely short-sided decision to come down on the side of extravagant military budgets. A more strategic move would have been to let the Conservatives take all the flack from the generals (and presumably from the Obama administration – Hillary will have a cow) for being “soft on terrorism.” All the Labour Party accomplishes in continuing to support bloated military budgets is to solidify the link in voters’ minds between Labour and the lengthy, pointless and unwinnable wars in Iraq and Afghanistan.

Bloated Military Budgets and Greek Debt

It’s a real pity Greece didn’t take a page out of Powers’ book when their debt problems first started. Over the last decade, Greece has spent a much larger proportion of GDP on defense than most other European Union (EU) nations. Economists claim that if Athens had cut defense spending to levels similar to other EU states, they could have saved around €150 billion – which is more than its last bailout.

Prominent economist Angelos Phillippides points out that Germany became an economic powerhouse mainly because it had no military budget for 62 years. Greece, in contrast, spent 7% of its GDP on defense when other European countries spent an average 2.2%. If you were to add up 5% compounded from 1946 to today, there would be no debt at all.

Germany: the Country Profiting most from Greek Weapons Purchases

Dimitris Papadimoulis, an MP with the Coalition of the Radical Left party, claims that Germany – which campaigns the loudest for Greek austerity cuts – is also the country that benefits the most from Greek arms purchases. In fact Greece is Germany’s biggest European arms purchaser, buying 15% of Germany’s total arms exports. This includes over €2 billion for submarines Greece doesn’t need and which have proven to be faulty. Papadimoulis complains that Greece still owes €1 billion on the submarines. This is three times the amount Germany pressured Athens to make in additional pension cuts to secure its latest EU aid package.

A Trail of Bribery and Fraud

According to the Guardian, speculation is rife that international aid was dependent on Greece following through on agreements to buy more military hardware from Germany and France. Katerina Tsoukala, a Brussels based security expert, talks about the veil of secrecy and corruption that surrounds Greece’s military procurements. She has reason to believe they have spent far more on defense expenditures than official records reveal. In April, former defense minister Akis Tsochadzopoulos was jailed pending trial on charges of accepting an €8 million bribe from Ferrostaal, the German company that helped oversee the scandal-marred sale of four Class 214 submarines to the Greek navy. To date, Athens has taken delivery of only one of the subs, after the other vessels were found to have technical glitches.

It appears that Greece bases their military contracting process on the US model, where “bribery” takes the form of campaign contributions and free trips and helicopter rides. The $100+ billion of US defense contractor payments that mysteriously vanish every year make Greece’s problems with weapons procurement fraud seem incredibly puny.