When, in late October, German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed with the-then Greek Prime Minister George Papandreou to grant Greece the €110 billion mega-loan, the latter agreed, in return for the loan, to purchase military supplies from Germany and France, worth €10.5bn.
The purchases made were to be in equal parts between Germany and France. The hardware to be purchased, according to Athens sources close to Antonis Samaras’s New Democracy party included frigate war ships, Leopard tanks from Germany and Rafale combat aircrafts from France.
At that time, George Papandreou was prime minister and (theoretically) had the right to make the commitment on Greece’s behalf, as the prospects were that his party would be staying in power for a further two years at least, and it was sufficient to legitimise the deal by signing the proper agreements.
It should be remembered that three days before the Papandreou government collapsed, following his out-of-the-blue decision to call a referendum to ratify the agreement reached in the 26-27 October EU Summit to rescue Greece, then defence minister Panos Beglitis, announced the immediate retirement of all heads of the Greek armed forces’ GHQ, with no explanation given.
Unofficial leaks at the time gave a vague picture of a possible coup d’état but no official explanation was ever given. The issue was later forgotten as Papandreou announced his referendum decision, was dismissed by the Eurogroup, Loukas Papadimos was appointed prime minister and the defence minister was also changed – the PASOK defence minister was replaced by New Democracy Vice President Dimitris Avramopoulos.
Having no signature from Papandreou or any official commitment from Greece in their hands following the dismissal of Papandreou and the €110bn loan, which constitutes the hard-core of Greece’s rescue plan, having been officially announced by Eurogroup, the purchase order of defence hardware €10.5bn, remains completely in the air.
Indeed, nobody expects that the new government that will result from the forthcoming February election, most probably led by Antonis Samaras, will even consider military-hardware purchases when mass layoffs of civil servants are likely to reach unprecedented levels, pensions will be reduced to below-subsistence levels and various social-security funds will stop paying for medicines.
The signature, which Germany and France are insistently demanding from Samaras as the sine qua noncondition for disbursement of the sixth tranche of the loan to Greece, is the insurance policy for Merkel and Sarkozy that Samaras will fulfil Papandreou’s promise over the military purchases, which was part of the secret deal.
Under the circumstances, it will be difficult to expect Samaras to sign any letter of guarantee the more that the IMF (read US) stays discreetly out of the dispute and does not request any signature from anybody.
The most logical development to expect, if Germany and France insist, will be for Samaras to withdraw his ministers from the Papademos cabinet and continue to provide support for the ‘service’ government, until the 19 February 2012 election.