Abstract
Former Yugoslav Republic of Macedonia (FYR Macedonia) in November said it was
bringing a case
against Greece to the International Court of Justice
(ICJ), accusing it of breaking a 1995 UN agreement
when it vetoed FYR
Macedonia’s application to join the North Atlantic Treaty Organisations
(NATO) in
April 2008. Greece and FYR Macedonia have an ongoing dispute
over the latter’s constitutional name.
Greece says its neighbour
cannot call itself the Republic of Macedonia, its preferred name, because
that
would imply a territorial claim over Greece’s northern province
of Macedonia. The 1995 UN agreement
was designed to provide an interim
solution. In exchange for FYR Macedonia agreeing to change its flag
and
constitution and being represented under the name ‘Former Yugoslav
Republic of Macedonia’,
Greece pledged not to stop it from joining
international bodies. The April 2008 NATO veto was in direct
contradiction
of that agreement, FRY Macedonia said in its appeal to the ICJ. Greece’s
immediate
reaction was to say FYR Macedonia had itself ‘previously
and blatantly violated a series of basic articleobligations
listed in this
agreement, as well as the fundamental principle of good-neighbourly
relations’.
Legal experts say the court case could take three years
and an eventual ICJ ruling might be difficult to
enforce. Since Greece
used its NATO veto, tensions between the two countries increased, with a
series of
trade and border disputes. The legal action might, it was also
feared, further complicate substantive
negotiations to resolve the name
issue.
The Greek defence industry’s good relationship with the US,
plus NATO and EU membership, should
ensure that it continues to benefit
from a significant number of subcontracts and plays an important role in
exporting arms to the Middle East and emerging European countries. There
appear to be no immediate
threats on the positive path that Greece, a
long-term member of Europe, is steering. Although limited by
the ruling
party’s precarious parliamentary majority and a more difficult
international climate,
Government reforms have supported consumer and
business confidence, and the economy is expected to
continue growing in
2009.
In early December 2007, Greece agreed to buy 415 BMP-3 fighting
vehicles from Russia, worth an
estimated EUR1.7bn (US$2.5bn). Defence
spending in Greece runs at around 3% of GDP, one of the
highest levels in
the EU, partly because of a policy to keep an arms balance with Turkey. Greece
has a
10-year defence procurement plan worth a total of EUR27bn in
2006-2015, including the purchase of
fighter planes. Russian-built Sukhoi
SU35s are being considered among other models to meet the
country’s
need for 30 fourth-generation fighter jets in a contract worth EUR4bn.
Greece’s relations with
Russia have improved in recent years, with a
joint oil pipeline project launched in 2007. Former Russian
president
Vladimir Putin visited Greece three times in 2006-2007.
Greece’s
military expenditure has remained at a steady level over recent years, but
decreased over 2005.
Growth will be limited by Greece’s ongoing EU
obligation to bring its budget deficit down to under the
3% GDP limit
applied to eurozone countries. The Greek defence industry continues to be
involved in the
manufacture and export of ammunition of all classes. Its
imports, although slow over the last year or two,
are expected to recover
over the next couple of years. However, the arms trade continues to be
affected by
cuts to the defence budget.
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