''Greek defense industry, past missteps and future development prospects''
The subject of this article is, so to speak, an enigma that the Greek state has not solved for most of its modern history. Historically, numerous development attempts have been made regarding the defense industry project. The first step was the establishment of the PYRKAL company, the "oldest" of the military industries, in 1874, specializing in the production of ammunition and explosives for the armed forces. Other attempts followed, accompanied by successes and failures respectively, ushering in the current faltering state of the said industrial sector.
The defense industry, under normal circumstances, is intended to meet military needs and the state must elevate it to a sector of strategic importance. Without a structured military industry, the country is unable to safeguard its national security and maintain its geopolitical influence. The first organized founding movements were manifested in the early post-war era, with the establishment of small private production units, in parallel with American aid under the Marshall Plan. Following the Turkish invasion of Cyprus in 1974, the state expressed a strong will to develop a domestic defense industry. Therefore, in the second half of the 70s, a wave of founding flourishing was observed with the companies EAB and ELB, while EAS was also strengthened with the merger of smaller industries such as PYRKAL and EVO. In the following decade, state subsidies increased and significant armament contracts were signed to the point that the Hellenic Defence Industry Association (HADA) came to participate in European and NATO programs. This was followed by the nationalization of PYRKAL and, together with the aforementioned smaller companies, they became the core of the state defense industries. At first, the state supported production with stable equipment orders, but the negative side of the matter was the partisanization of the administration with the expected consequence of opacity and arbitrariness.
The 80s, characterized for the most part by the PASOK government (Prime Minister Andreas Papandreou), marked the Greek defense industry with a wave of massive nationalizations, placing this particular industrial field at the center of production and economic development. At the same time, there was an increase in equipment spending and extensive hiring in now public enterprises with the aim of reducing unemployment. However, the measures taken by the PASOK government also caused major negative impacts. The management of industrial units by the state in itself would be arbitrary to consider a wrong strategy. However, structural weaknesses were caused by the politicization of industrial management as well as the largely meritocratic recruitment of personnel based on customer criteria. Consequently, party rule replaced administrative efficiency, thus forming an ineffective administration. Businesses were utilized as tools of social policy and not as competitive productive entities. Additionally, long-term planning and strategy were absent. Specifically, there was never an organized plan for technological innovation and thorough export activity that would function as a source of profit. Another strong oxymoron was that the country's defense needs were covered mainly by imports despite the existence of state-owned industries. The companies did not take care to cultivate an export culture and as a result did not conclude memoranda of cooperation with foreign corporate groups with a common purpose. The orders for materials were sent exclusively by the Greek state, resulting in a limitation of the quantity of sales and production. Also, long-term public funding has unfortunately been ineffective. Also, the existing structures were not utilized for the manufacture of innovative equipment tools and the main flaw was that no initiatives were taken to collaborate with university institutions and strengthen the research sector. Additionally, entrepreneurial freedom was annihilated within the context of partisan hiring and the absence of technocratic criteria. The control was suffocating, but the state did not have valid knowledge of the exact needs of the army, with the consequent impact of the lack of cooperative interconnection with the armed forces. As a consequence of the above, opacity prevailed, in some cases there were over-hiring, causing a disproportionate number of employees and production. Then came the collapse of competitive capacity, followed by the debt burden that led to the obstruction of incentives for the development of private initiatives in the aforementioned sector. In conclusion, despite the initially well-intentioned supportive policy on the part of the state, the latter ultimately succeeded in undermining the defense industry rather than pushing it towards substantial development and healthy operation. Then, the period of memoranda and the ten-year economic crisis essentially brought about the collapse of our country's military industry.
In the context of the new European armament ambitions, influential players in the sector have strongly requested their willingness to participate in the aforementioned programs (ReArm Europe) with the aim of returning 30% of the industrial work. Greece's participation would offer a golden opportunity for recovery in our clinically dead, defense industry, eliminating at least partially the effects of past strategic and political mistakes. Proposals have been submitted for the production of exportable equipment so that the profits and scope of the industry can be increased by breaking the historical domestic limitation. For the first time, the possibility of development possibilities is discernible on the horizon. In fact, proposals have been expressed for the establishment of a competent authority to supervise the sector under the legal entity of a deputy ministry or General Secretariat. The problem that remains is the low contribution of the defense industry to GDP (0,7%) as well as the reduced participation of Greek companies in recent armament programs (2-3%). Nevertheless, the optimistic point of the case is the evident willingness of the existing industrial groups to meet the requirements of the programs as they already produce components for battle tanks and frigates. In addition, the interconnection and cooperation of university institutions with industries in the sector as well as military schools would be vitally helpful, so that in the first case the research sector could be developed and in the second, there would be accurate information for the defense industries on the armament needs of the armed forces. Also, such a collaborative initiative will contribute to strengthening know-how if emphasis is given to the scientific side of the issue, the economy since production will increase through export activity as well as the defense capability of the Greek army since the related industrial work will be covered by 30% by Greek corporate groups. In conclusion, our country's participation in the SAFE mechanism can significantly strengthen our defense industry as it is committed to providing financial support to EU member states that are interested in investing in their defense.
In conclusion, a country like Greece is condemned by its geopolitical reality to sometimes face existential risks. As a result, it spends a disproportionate amount to support its armed forces, compared to the level of its economy. By following the right strategic steps, it could transform the defense business into a heavy industry with a double obvious benefit. On the one hand, internal economic development, the fight against unemployment and the modernization of our army, through the production of state-of-the-art weapons. On the other hand, through exports, Greece would experience a revenue surplus.
Πηγές: