Turkish submarine program in place, Greece to sell one

While senior Turkish and Greek officials have voiced a wish to reduce their countries' defense spending, Ankara's major Navy modernization programs, including a multibillion-dollar deal to buy new submarines, remain in place.

The initiative to reduce military spending took off last month when Turkish state minister for EU affairs, Egemen Bağış, suggested the two neighbors cut defense spending.

"Greece doesn’t need new tanks or missiles or submarines or fighter planes; neither does Turkey. It’s time to cut military expenditure throughout the world, but especially between Turkey and Greece," he said in an interview with the Financial Times. "Neither Greece nor Turkey needs German nor French submarines."

The Athens government is presently experiencing a punishing financial crisis, while Ankara was only partly affected by the 2008 and 2009 global economic crisis. The combined Turkish and Greek defense spending in 2008 was 18.4 billion euros, according to NATO (6.9 billion euros for Greece, or 2.8 percent of its gross domestic product, or GDP; and 11.9 billion euros for Turkey, or 1.8 percent of its GDP).

Confidence-building measures

But nearly 15 years after the two former foes almost went to war over a sovereignty dispute in the Aegean, they have agreed on a fresh set of confidence-building measures, including strengthening contacts between their militaries.

Foreign Minister Ahmet Davutoğlu and acting Greek Foreign Minister Dimitris Droutsas earlier this month agreed in talks here on a number of confidence-building measures. "These measures will help bring our countries, peoples and armies closer," Droutsas said. "We should allocate our budgets not to arms, but health, education and welfare," Davutoğlu said at a joint news conference on April 8.

The latest measures include joint training programs at Greek and Turkish facilities within the framework of NATO's 22-member Peace for Partnership program. The contacts would also include visits by each other's chiefs of staff to give lectures at military academies, conduct joint research and visit staff colleges.

But there are still problems facing mutual disarmament. Turkey and Greece have territorial disputes in the Aegean and diverging views over Cyprus. The territorial disputes include differences on the sizes of territorial waters, airspace and continental shelf. The two neighbors' navy modernization programs are mostly designed to counter potential threats from each other.

Rival submarine deals

While some political obstacles remain in place, Turkey's defense modernization programs, including major Navy deals, are continuing as planned.

The Turkish Navy will buy six modern submarines, built by Germany's HDW shipyards and Turkish partners. The U-214 type submarines will cost nearly 2 billion euros under a contract signed last summer.

Turkey to buy submarines at reduced price

Turkey's Navy will buy six modern submarines to be built by Germany's HDW shipyards at a price nearly 20 percent lower than what the Germans had originally offered, procurement officials said.

The Defense Industry Executive Committee, Turkey's top decision-making body on defense procurement, selected HDW over its French and Spanish rivals in the summer of 2008. At the time, the program's expected cost was announced to be nearly 2.5 billion euros.

After yearlong price and work-sharing negotiations between the Undersecretariat for Defense Industries, Turkey's procurement agency, and the German company, a final contract was signed in July.

No price was specified in the public announcements for the contract at the time, but Hürriyet Daily News & Economic Review found out that the cost of the program was around 1.96 billion euros, which is nearly 500 million euros lower than the original price.

Turkish officials said they were also content with the work-sharing arrangement, which enabled Turkey's local companies’ involvement in the deal, although no details were clear.

The Kiel-based HDW, a subsidiary of the German conglomerate ThyssenKrupp, will now build six modern U-214 type submarines with Turkish partners.

The submarine program will be Turkey’s second-largest defense modernization project following a planned $11 billion deal to buy at least 100 next-generation F-35 Joint Strike Fighter Lightning II aircraft for the Air Force. Ankara hopes the new, non-nuclear U-214 submarines will start operating in 2015.

Situation in Greece

While HDW cleared the way for the Turkish program, its similar efforts for Greece have recently faltered. HDW and its Greek subsidiary, Hellenic Shipyards, in late September canceled their submarine programs with the Greek government, citing Athens’ 524 million euros outstanding debt to the companies.

In 2006, HDW and Hellenic Shipyards delivered the first of four Class 214 submarines to Greece. But, Athens did not accept the vessel, citing technical failures. It is not clear at this point how the dispute can be resolved.

Source : hurriyetdailynews.