ATHENS (Reuters) – Greece is ready to spend part of its cash reserves to support its armed forces starting this year, the country’s finance minister said on Monday, after years of tightening defense spending.
During its decade-long debt crisis that erupted in late 2009, Greece slashed defense spending in three international bailouts that have helped it stay afloat. Greece came out of its third bailout in August 2018.
In an interview with Alpha TV, Finance Minister Christos Staikouras said his mandate included “supporting the preventive force of the armed forces”.
He made the comments as tensions between Greece and NATO’s Turkey escalated over energy resources in the Eastern Mediterranean region.
“We, the Ministry of Finance, will do everything possible to support government decisions in this area,” Staikouras said.
He said the government’s strategy is not just about arms purchases and will run for the next few years starting in 2020, without providing a figure on how much money could be invested or any other details.
“It depends on the orders of government and the Ministry of Defense on certain priorities,” he said.
Greece has created a € 34 billion ($ 40.6 billion) cash reserve from unused bailout funds and money raised in the markets. The country has been eagerly awaiting an economic recovery this year but the coronavirus pandemic has upset its expectations and the government is now seeing its economy contract by up to 10%.
Report by Renée Maltezou; Editing by Lisa Shumaker