Greece was able to remain in the eurozone despite the large hit to its economy during the 2010s financial crisis in exchange for hosting more U.S. military bases on its soil, a former Greek defense minister has revealed.
In a critical July 2015 Eurogroup meeting, then-German Chancellor Angela Merkel and Finance Minister Wolfgang Schauble proposed around $90 billion in financial aid if Greece were to exit the eurozone, which Yannis Varoufakis, then-Greek finance minister, accepted, Panos Kammenos said in an exclusive interview with Greek broadcaster Antenna late Wednesday.
"But I strongly opposed the proposal and told (then) Prime Minister Alexis Tsipras to ask for American help," Kammenos said, adding that he also contacted the U.S. secretaries of state and defense to this end.
Kammenos was defense minister during most of 2015.
He proposed to them a package that would include arms deals and allow the U.S. to access more military bases in Greece, including the port of Alexandroupolis and Stefanovikeio base, in return for U.S. help, he related.
"Essentially, we also wanted Greece to take Türkiye's place as a strategic ally of the U.S. in the Mediterranean," he stressed.
Then-U.S. President Barack Obama and then-French President Francois Hollande mediated, and an agreement on the third Economic Adjustment Program for Greece was reached in July 2015, he said.
"The deal was achieved because Greece turned to the U.S. This is a truth that needs to be told," Kammenos added.
The deal was signed in October 2021 and it turned Greece into essentially a military base for NATO and the U.S. It permitted the U.S. military to use Georgula Barracks in its central province of Volos in the Litochoro Training Ground, and army barracks in the northeastern port city of Alexandroupoli apart from the naval base in Souda Bay in Crete which the U.S. has operated since 1969.
Meanwhile, Mitsotakis’ conservative government promised to continue its multi-billion euro defense modernization program during its second term in office on Thursday, setting its sights on acquiring F-35 fighter jets in five years.
“Our priority is to safeguard the country,” Prime Minister Kyriakos Mitsotakis told Parliament at the start of a debate to approve a new government after his conservative New Democracy party won a general election last month.
Athens is acquiring 24 advanced French-built Rafael jets, and upgrading 58 F-16 fighters from its aging fleet. It wants to add 20 F-35s with an option to buy as many as 28 more at a later date – requests that still require final approval from the United States. It has also approached Berlin for an update to its Leopard 2 tank fleet and purchases of Lynx armored vehicles.
Greece has long-standing disputes with neighbor and fellow NATO member Türkiye and is modernizing its military after emerging from a severe financial crisis in 2018.
Despite saying that it has no intention of entering an arms race with Ankara, it has been carrying out an ambitious rearmament program.
It currently has the largest defense budget in the alliance relative to the size of its economy, at 3.54% of gross domestic product in 2022, according to NATO’s annual report published in March. It is one of seven members that spend above the 2% NATO guideline, along with the United States, Lithuania, Poland, the United Kingdom, Estonia and Latvia.
Mitsotakis said the high spending on defense would continue despite tension with Türkiye in recent months. He is due to meet with President Recep Tayyip Erdoğan next week on the sidelines of a NATO summit in Lithuania.
Concluding a three-day debate, the Greek Parliament will hold a vote of confidence Saturday, to back the new Mitsotakis government.
Besides a centurieslong rivalry and energy exploration disputes, territorial claims over the islands in the Aegean have been one of the most prickling issues Türkiye and Greece have locked horns over for years, and it appears no closer to a solution.
Athens has also been building a military presence on the disputed Aegean islands since the 1960s in violation of both the 1923 Treaty of Lausanne and the Paris Treaty of 1947, which awarded the islands to Greece on condition that they are kept demilitarized.
Mitsotakis also lobbied to block the Biden administration’s proposed F-16 fighter jet sales to Türkiye based on the claim that such a sale could create additional instability in the Aegean, a move that drew Ankara’s wrath for “involving third parties in our dispute.”
The country’s burgeoning arms program is designed to counter the protection of Turkish interests in the Eastern Mediterranean. Türkiye has often warned against such moves, offering instead to resolve their disputes through dialogue.
