Background
The submarine scandal relates to the purchase of four submarines from the German companies HDW and FERROSTAAL in a deal signed 14 years ago. The former Minister of Defense, Akis Tsochatzopoulos who oversaw the purchase has been convicted of money laundering over the case and is currently imprisoned having received the maximum 20 year sentence. FERROSTAAL has agreed to pay a fine of 140 million euros over the bribery of Greek officials.
 
ThyssenKrupp Marine bought the shipyard which was responsible for building the submarines in 2002 and subsequently sold on a large shareholding to Abu Dhabi Mar. 15 years after the original order the four Class 214 submarines were finally turned over to the Greek Navy in March 2014. However all four are still in the Skaramangas shipyard in Piraeus and require further modifications before they can be deployed.
 
According to the Telegraph story, Greece has filed a 200-page complaint with the ICC International Court of Arbitration maintaining that the country’s international position was undermined due to the failure to supply the submarines on time.
 
“The issue is so sensitive that we could claim even higher economic compensation from the Arabs and the Germans because the submarines are connected with the geostrategic role of the country, its place within NATO, and the fact that the country is awaiting the finalisation of the Exclusive Economic Zone which has brought several investors who want to invest in its natural resources,” a ‘well-placed source’ was quoted as saying in the telegraph report.
 
In an early sea trial one of the submarines was found to be defective, listing heavily in certain conditions. The Navy is expected to rehire workers who were dismissed from the shipyard in April 2012  with wages reduced by 35% in order to complete the final modifications of the submarines. However it is unclear when this will occur.
 
The UK newspaper also notes that the total cost of the submarines to the Greek state has reached at least 3 billion euros – three times the amount the EU has demanded that Greece cut from its budget by reducing workers’ pensions as part of the country’s bailout programmes.
 
The four submarines have become a symbol of the corruption and wasteful spending on arms procurement deals that contributed significantly to Greece’s deficits. Details of the huge bribes paid by Northern European companies to Greek politicians and military officials are continually emerging from ongoing criminal trials in Greece. One key witness – Antonis Kantas, the former number 2 defense procurement official testified in December that he had received ‘more bribes than he could remember.’
 
“The country was Europe’s largest importer of weapons, spending four percent of GDP on armaments. It had 1,300 tanks – more than twice as many as Britain,” according to the Telegraph report.
 
The main benefactor of this largesse were German and Northern European arms companies. But while the Northern European governments have rarely missed an opportunity to castigate Greece for its profligacy and excessive state spending on pensions and public sector salaries it has been far more muted when discussing Greece’s military spending. The role that German companies and politicians played in the free-for-all has also been largely ignored.
 
ThyssenKrupp declined to comment on the case telling the Telegraph that it had not seen details of the claim.