ECONOMY

Armaments sector under review

The government is preparing changes in legal framework for the arms industry, with priority given to revision of legislation regarding arms procurements, and renegotiation of deficient contracts that caused an excessive burden on the state budget in recent years, Defense Minister Spilios Spiliotopoulos said yesterday. Addressing an event at the Athens Business Club 2004 on the Greek defense industry and its prospects, he said the government will also seek strategic partnerships with experienced foreign companies. Spiliotopoulos underlined the need for structural changes and initiatives to tap comparative advantages of the domestic arms industry, and dealing with shrinking demand for armaments globally. He noted that modern planning and execution of military operations require full utilization of digital technology. «The digitalization of the fields of operations offers significant benefits, functions as a multiplier of military force and enables armed forces to conduct a network-centered war,» Spiliotopoulos said. Given the changes in technology and consequent sharp rise in the cost of weapons systems, he said there is an urgent need for the integration of armaments policies. He said that should include broad business partnerships, mergers and joint production schemes, leading to the standardization of weapons systems, military infrastructure and operational planning. He noted that beyond bolstering national security, the defense industry creates jobs and puts cutting-edge technology in the service of economic development. Changes in the international environment and homogenization from participation in alliances make necessary the amendment and modernization of weapons procurement tenders, with a view to equitable participation of domestic and foreign manufacturers, he said. He announced the creation of an arms manufacturers register, from which companies violating the law at any point of their participation in tenders, including implementation of orders, will be struck off. Also, priority will be given to arms purchases that include transfer of technology, there will be long-term planning of defense equipment orders, and state defense industries will operate on the basis of private economic criteria. Spiliotopoulos said the government desires opening arms procurements, without preferences and exclusions, to attract more participants and promote healthy competition. Speaking at the same event, Deputy Defense Minister Vassilis Michaloliakos said the ministry seeks to reduce defense spending without affecting operational capability of the Greek armed forces, but this will depend on the development of Greek-Turkish relations. He said the new government’s appointment of a high-ranking judge to head the ministry’s economic planning department is an additional guarantee for transparency. He noted that the spending of billions of euros on arms procurements in recent years yielded minimal benefits to the Greek defense industry due to the lack of transparency. He said prospects are upbeat and depend on the degree of the country’s participation in the restructuring of the European defense industry, and the tapping of opportunities emerging in domestic and foreign armaments programs.