Defence Procurement and Industrial Base in Greece
The ongoing tensions in the Aegean and Eastern Mediterranean demonstrate emphatically the need for solidifying certain aspects of Greece’s defence operational capabilities as well as the need for strengthening the domestic defence industrial base.
The announcements of the Greek Prime Minister in Thessaloniki regarding the new defence procurement programme and the restructuring of the domestic defence industry are positive and in the right direction.
What remains is the timely and methodical implementation of these announcements. A necessary condition for a successful outcome is the design of a robust industrial strategy, which will meet Greece’s security and defence priorities, with an emphasis on new “smart technologies”, supported by an appropriate legal framework. The Government has prepared a draft Bill for the reform of the legal framework of defence acquisitions, which is currently under consultation.
A key parameter of the new legal framework will remain of course the European Directive on defence and security procurement (DSPD) 2009/81/EC as well as the rules and general principles of primary EU Law. At this point, a clarification is in order (to avoid past misconceptions). It is wrong to treat the European legal defence procurement framework as an obstacle, which hinders the strengthening and development of the domestic defence industrial base. Instead, it is important to concentrate and emphasise the mechanisms of the wider EU framework that can assist the “extrovert” development of the domestic defence industry.
More specifically all the actors involved, political leadership and industry alike, need to learn from the best practices in other Member States whose defence industrial base consists mainly of small and medium-sized enterprises that do not have direct access to the supply chains of the European and International defence prime contractors. They manage to navigate successfully within the same legal framework based on a robust defence industrial strategy, which also understands the development of the domestic defence industrial base as a lever for strengthening the competitiveness of the European Defence Technological and Industrial Base as a whole. The EU Commission’s recent decision to close the infringement proceedings against the Netherlands (in connection with certain programmes of industrial participation – discussed in an earlier post here) demonstrates this clearly.
With this in mind, it is suggested that the Greek Government, in coordination with the other relevant actors, develop a policy framework along the following lines:
The reform of the National legislative/regulatory framework in order to facilitate the development of the domestic defence industrial base making the most of the mechanisms and opportunities provided by the European Union acquis.
The development of a comprehensive and robust defence industrial strategy informed by European and international best practices and standards, which will be regularly updated, include the mapping of the domestic defence industry by reference to the defence and security considerations of the country, and set short term, medium-term and long-term goals for its implementation.
The utilisation of industrial participation mechanisms that would create opportunities for the domestic defence industry to engage meaningfully in the global supply chains of defence prime contractors; the identification of key areas for domestic capabilities in the areas of maintenance and follow-on support during the life cycle of the defence systems (often around 30-40 years) in order to minimise security of supply risks in times of need.
The training of the domestic defence SMEs to understand fully the collaboration opportunities created by the Permanent Structured Cooperation Framework (PESCO) and the European Defence Fund (EDF), the new framework, which provides co-financing by EU funds for the promotion of R&D/Industrial collaboration in the area of security and defence. The goal of such training would be the development of a more outward looking approach of domestic industrial actors.
Connection of the domestic industrial base with universities and research centres.
The present juncture provides a unique opportunity to restart the Greek defence industrial base and set it firmly as a key pillar for the defence, security and technological development of the country. This opportunity should not be missed. All the relevant actors, political leadership, industry, universities and research centres must seize the moment, learning from the mistakes and missed opportunities of the past.
Their actions should also be informed by the knowledge of what inaction would mean for the future of the country.
(The present piece is based on an op-ed, which I co-authored with Tasos Rozolis, Chairman of the Association of Greek Defence and Security Material Manufacturers (SEKPY), and CEO at AKMON S.A.