High EU defence spending 'perpetuating' economic crisis

Public Service Europe - The years of high European military spending and corrupt arms deals contributed to the debt crisis in countries, such as Greece and Portugal, and continue to weigh heavy on future budgets in all troubled EU member states - warns researcher

Five years into the economic crisis in Europe and there is still an elephant in the room, in Brussels, that few people are talking about. The elephant is the role of military spending in causing and perpetuating the economic crisis. As social infrastructure is being slashed, spending on weapon systems is hardly being reduced.

Perversely, the voices that are protesting the loudest in Brussels are the siren calls of military lobbyists, warning of 'disaster' if any further cuts are made to military spending. But the real disaster has emerged from years of high European military spending and corrupt arms deals. This dynamic contributed substantially to the debt crisis in countries such as Greece and Portugal, and continues to weigh heavy on future budgets in all of the crisis countries.

High levels of military spending in countries now at the epicentre of the euro crisis played a significant role in caus¬ing their debt crises. Greece has been Europe's biggest spender in relative terms for most of the past four decades, spending almost twice as much of its gross domestic product on defence as the European Union average.

Spain's military expenditure increased 29 per cent between 2000 and 2008, due to massive weapon purchases. It now faces huge problems repaying debts. As a former Spanish secretary of state for defence said: "We should not have acquired systems that we are not going to use, for conflict situations that do not exist and - what is worse - with funds that we did not have then and we do not have now."

Even the most recent casualty of the crisis, Cyprus, owes some of its debt troubles to a 50 per cent increase in military spending over the past decade; the majority of which came after 2007. The debts caused by arms sales were often a result of corrupt deals between government officials but are being paid for by ordinary people facing savage cuts in social services.

Investigations of an arms deal signed by Portugal in 2004 to buy two submarines for €1bn, agreed by then-prime minister José Manuel Barroso - now president of the European Commission - have identified more than a dozen suspicious brokerage and consulting agreements that cost Portugal at least €34m.

Up to eight arms deals signed by the Greek government since the late 1990s are being investigated by judicial authorities for possible illegal bribes and kickbacks to state officials and politicians. Military spending cuts, where they did come, have almost entirely fallen on people – reductions in personnel, lower wages and pensions; rather than on arms purchases.

While countries like Germany have insisted on harsh cuts of social budgets by crisis countries to pay back debts, they have been less supportive of cuts that would threaten arms sales. France is currently arranging a lease deal with Greece for two of Europe's most expensive frigates. As an aide to former Greek prime minister George Papandreou noted: "No one is saying 'buy our warships or we won't bail you out' but the clear implication is that they will be more supportive if we do."

Many research studies show that investment in the military is the least effective way to create jobs, regardless of the other costs of military spending. At a time of desperate need for investment in job creation, supporting the military cannot be justified given how many more jobs such money would create in areas such as health and public transport.

Despite the cost of high military spending, military leaders continue to push a distorted notion that defence cuts threaten the security of Europe's nations. However, at a time when the European Commission's agenda of permanent austerity faces ever-growing challenges, there is one area where Europe could do much more to impose austerity. And that is the arena of military spending and the arms industry.

Abolishing nuclear weapons owned by France and the United Kingdom could save several billions of euros every year and fulfil a major pledge made by these countries under the nuclear non-proliferation treaty to finally eliminate nuclear weapons. Reductions of all EU nations' military spending to Ireland's levels - 0.6 per cent of GDP - would save many more billions. Writing off dirty debts caused by arms deals concluded through bribes, would be a good first step to lay the bill for the crisis with those who helped cause it.

Frank Slijper is a research associate with the Transnational Institute, senior researcher at the Dutch Campaign Against Arms Trade and author of the research report Guns, debt and corruption: military spending and the EU crisis