Let them eat tanks

This isn't going to boost European taxpayers' support for the Greek bailouts...

Dutch media reports that though Greece struggles with a debt of some €350bn and is on track to miss the EU/IMF deficit targets by a couple of billion euros, the country has apparently bought 400 M1A1 Abrams tanks from the US, with upgrades, costing the (European) taxpayer $4.3 million each, in addition to 20 AAV7A1 vehicles, on average costing €1.6 million each. The article notes that another order could soon follow.

If this is accurate (and we've only seen newspapers reports so far), the total bill for this order comes in it €1.3bn - an amount which would take Greece a lot closer to reaching its deficit target this year (currently, it looks set to miss the deficit target for this year by €2.4bn).

Elsevier notes that, in contrast, the Netherlands, whose parliament yesterday approved the second Greek bailout, is currently planning to sell military equipment in a bid to cut spending.

Update 1.30pm: following a tip on twitter that the story was not quite as sensational as was being reported by some media outlets, it turns out that the tanks are probably a "concession" from the US to Greece, so there won't be a "bill" per se for the tanks. However, taxpayers might not be let off the hook. The deal also includes options between simple refurbishment of the tanks - costing Greece tens of millions of dollars - and upgrading them to a higher level of operational capacity, which would involve an even higher corresponding cost, according to Svenska Dagbladet. Furthermore, Greece has also inquired as to the 'price and availability' of 20 AAV7AI Amphibious vehicles, which cost an average of €1.3 million, which could potentially make up the first batch of a total order of 75-100 vehicles.

Even if the total cost of the deal is a lot lower than originally reported because Greece is not buying the tanks outright, as taxpayers around Europe are being asked to provide loan guarantees to cover the potential costs of a Greek default, this type of spending priorities will raise a few eyebrows (and yes, we do understand the geo-politics of that region).