Well, in the various posts people made a summary of everything.

But i think the issue raised on the Rafale thread was also about the technological part of it. From what i have read and seen in videos about the greek ones:

– The 2000 is less modern in avionics compared to F16MLU. (one can search HAF Mirage in youtube and can see for himself). Today it has also a disavantage in BVR without the MICA (Super530D) against Amraam. Back in 80s-early 90s, it had actually the advantage against the shoot-and-miss Sparrow.

– The 2000-5mk2 is far more advanced compared to the “simple” 2000, for the reasons explained by Scourge. It has inherited some tech pieces from the Rafale development actually and the MICA IR as mini-IRST. The RDY2 and ICMS Mk3 are superior to the corresponding systems of the Block52+.

Both suffer the energy bleed after the first turn, specially in low altitude, that’s why opponents try to fly low when heading towards them.

For that reason in HAF, Mirage2000s are NEVER, ever, sent to interception with underwing tanks, but only with 1 underbelly tank. To facilitate their loitering time autonomy, this is why their readiness base in on the island of Skyros, closer to the border. In this configuration it can deal much easier against heavier loaded F16s even after the 1st turn. Usually F16s try to go to sustained climbs and sustained turns, turns, turns, in order to bleed out the Mirage’s speed.

Amongst young cadet pilots, the F16 is much more popular, because it has the reputation of being easier to fly, you will be trainning with a great variety of weapons and missions (while in HAF if you end in Mirage you will be using only 2 A-A, 1 A-G and 1 A-Sea weapons) and since it’s all cheaper in F16s you know that most likely the F16s will get upgraded first, so you won’t be flying for long in a old aircraft.

Odd, that, since the Netherlands, Germany & Denmark have (or in the case of Denmark, are buying) SM2 missiles on ships with European radars – Smart-L & APAR.

Well, it’s not something official. The press, as long as you get no official news, is throwing various things. In this case it has been said that the Americans would like us to put Aegis with SM2 and are pressuring, for the fact they want a piece of the pie. Another article says that the French don’t even want to talk about it. Unless we get some official data from the navy, all this is “press rumours”.

Things are odd in general when it comes to US armament, because for example, Denmark and Germany, have SM-2. When Greece asked the SM-2 a few years ago to USA, when USA proposed to us to buy the Spruance (?) class which were SM-2 capable, they denied to export us the SM-2 (because Turkey doesn’t have it), so we refused the ships, because the only interesting feature that would justify buying a used ship with big crew requirements , was the SM-2.

USA also protested to France when the French anounced that they were selling us SCALP. USA evoked the non proliferation treaty of strategical missiles, but France didn’t waver. Probably if it was Denmark at the place of Greece, USA wouldn’t have bothered to say anything.

So, unfortunately, what happens to Denmark, isn’t always the same as what happens to Greece. Because USA has no political interests in Denmark region, only commercial.

Or for example, USA would have no problem to sell US material to Germany, Netherlands or Denmark, right? Try seeing if the client is Cyprus and see what happens. 😀 They don’t even allow us to “donate” to Cyprus decomissioned greek M-110 howitzers.

Note: It has not been written that HN actually PREFERS the SM-2, but they were only asking to know what configurations they could have available to examine.

Nothing really new, but a summary of the situation, from the most official greek source to this day.

Question by leader of a minor opposition party to the minister:

– ThussenKrup has expressed her intention to move out of Skaramanga, while it is also refered that will stop paying the workers starting on Nov. 1st 2009. And this while more than 160 workers of the wheel sector of the shipyards are in desperate conditions, since they remain unpaid for 6 months and without payment of leave (meaning the money an employer pays you when he puts you on forced leave from work).

Since the position of Thyssen can only be seen as blunt blackmail against the greek state, which “gave away” the shipyards with big “dowry” in 2002 to german interests.

Since after the blackmail of Thyssen the fate of the submarine contracts are unknown and most importantly , it is unknown the fate of the Shipyards and of its workers,

the ministers are asked:

1) What do they intend to do to force Thyssen to respect her conventional obbligations for smooth continuation of the operation of the shipyards, with the full employment for all workers and and the payment of the owed sums of money to the workers of the “wheel” section?

2) Do they intend to proceed to regrouping and assume public control of the Shipyards as to deter the transfer to new private interests, which will continue their devaluation and possibly give them the “final blow”?

Reply of the MoD in the Parliament to question about Skaramanga made by the president of a minor opposition party. (copy of the Parliament’s original transcript).

– Mr. President, as you know, the Skaramanga shipyards, but also the shipbuilding sector in our country is of particular importance, not only for the industry and employment, but also for the Armed Forces, since the Navy is the main client of the shipyards.
I will also remind that in the shipyards right now 2 programs of major importance for the Navy are being made: the big program of the construction of 4 submarines, of which the 1st one has been built by ThyssenKrupp, by HDW, which is a daughter company of hers and 3 more built here and waiting for the sea trials to begin at Skaramanga, while with another contract, the upgrade of an older submarine has been completed and remains the upgrade or the construction of 2 more from scratch.

In the middle of the pre-electoral period, the Skaramanga shipyards, that is the exclusive share holder and in conseguence the mother company ThyssenKrupp proceeded to denounce the contracts for the new and the old submarines. And this was done, both by the Shipyards and by HDW herself, that is, at the end, always ThyssenKrupp, which builds submarines.

So, we received in our hands this pressuring, this blackmailing situation as soon as we formed our goverment and took our duties.
We called the representative of the company, Mr. Atzpodien and we made him clear that what primarily interests us, is to honour the agreement for the privatization of the Shipyards of 2002, which predicts specific terms concerning the way of retaining the shares and functioning of the shipyards up until the end of 2011 at least, but of course our interest is to make sure that this (the functioning of the shipyards) is ensured to happen in the long run, with stability and duration, without setting blackmailing questions and creating faits accomplis.
In conseguence, we declared that any threat for declaring halting of payments or starting procedure of bankruptcy for the Shipyards, is unacceptable.

At the same time, we agreed in substance with ThyssenKrupp for a formula (scheme) for the smooth and favourable for the greek State completion of the 2 contracts for the submarines. Because our goal is to receive, in a timetable which is also acceptable for the MoD, all the submarines, with the exception of course of the first, problematic, submarine, which carries the name “Papanikolis”, built in Kiel and the technical characteristics of which do not satisfy the greek goverment, but may possibly satisfy other countries.

Of course, after this, the procedure of surprises or faits accomplis continued. Because of that, we called Mr. Atzpodien again and finally agreed in a formula which safeguards not only the execution of the contracts for the submarines, with a way favourable for the State and the MoD and as conseguence for the public interest, but also for the future of the Shipyards.

So, it was agreed, to appoint an international evaluating House, towards which, Thyssen will submit proposals for consorciums, for company formulas, trustworthy, with financial and business depth, which could be the successors of Thyssen as the main or even the only shareholder, with the aim to ensure the functioning of the shipyards, the posts of the workers and the future of the shipbuilding sector as such.

As a conseguence, the pressure is released as far as time is concerned. We have ahead of us, a reasonable amount of time to complete this procedure. In the meantime, the works that concern the submarines will continue. The sea trials will begin. The workers will be paid. The Shipyards will operate smoothly and the MoD will continue with payments, but with an extremely cautious manner, so that the other side can’t create faits accomplis, which cannot be undone, if this becomes later necessary for the protection of the interests of the greek state.
I think that we have handled the issue with swiftness, producing results and with transparency. We protect the posts of the workers and the future of the shipyards, but also the procurement programs of the Navy, which are of great importance.

Thank you very much.

http://www.enkripto.com/2009/11/blog-post_3699.html

Also, according to defencenet:

– The “time window” for finding new owner, will be at best 3 months. This is how much Thyssen is willing to wait.
– Interestingly, the French haven’t signed the MoU with Tavoularis last week, they remain agreed oraly only. Tavularis is still in the game, but currently doesn’t seem he is any closer to getting the Shipyards.
– There is a rumour from “abroads” that the French either as DCNS or as Thales, could be buying off the entire ThyssenKrupp. This rumour has not been confimed by any official source. If it turned to be true though, Skaramanga would pass directly to the French and would become Tavularis’ competitor. 😀

http://www.defencenet.gr/defence/index.php?option=com_content&task=view&id=9531&Itemid=139

I think i won’t post again until something spectacular happens, because this is getting like a soap opera. :p

Sounds like a smart man.

Yes, smart he is. Too smart for his own good actually. He was candidate to become his party leader, but the fact that he was too clever and ambitious made the other party members have an inferiority complex against him and the fact that he is very fat made him unpopular with the media. That’s Greece unfortunately. Where mediocrity reigns.

Anyway, the bad thing is, that smart or no smart, his party policy is to cut defence expenditures, so that won’t change. I think the only way we will have any deterrence in the future is if we buy really smart buys, that will allow not to win a war, but to simply be able to damage Turkey’s infrastructure. It is obvious that neither of the 2 big parties are ready to conserve the money for defence and find the money they need for welfare where they should find it. Greece is entering a period of appeasement policy and i suspect sooner or later we will give in to some turkish claims. In the 80s where the economy was much weaker ,we had arrived to hit a 7% of GDP for military budget. Currently we are lower than 3,5% (as a matter of fact we may be lower than 3% right now) and every politician still complains about it… And even the previous’ gov declared goal was to bring them down to 1 %.

Because, why bother finding the money for welfare from tax evasion or public sector inefficiency and overspending, when you can find them ready , at no political cost, from the defence budget? That’s the brilliant mentality of the greek politicians.

This for example are the data about 2006 VAT tax evasion.

http://img251.imageshack.us/img251/5321/45240957.jpg

First column: VAT that should have been collected (in mln euros).
Second columb: VAT effectively collected (in mln euros).
Third column: Losses from VAT non collected.
Fourth column: the non collected VAT as percentage of the total. We are the champions! 30% not collected.

In Greece’s case, the VAT not collected by the state, is 6,5 bln euros (How many Papanikolis can you buy with that!). Which is practically the amount of the entire defence budget for 1 year. Why isn’t it collected? Because of the inefficiency of the state’s controlling mechanisms, collecting mechanisms and verification procedures. Everything is done too slowly.

The real greek GDP, by modest estimates is calculated to +20% of the official one. Some arrive to to say it’s almost double as that.

That’s why i call Greece a country with poor economy, but not so poor citizens… Will any goverment do something about it? Probably only if she is FORCED to do so (by the EU). Which is also why the greek economy didn’t and won’t go bankrupt anytime soon. If a goverment HAS to, she can find money to “save” the economy at the last minute. The money is there. They just don’t want to collect it, to avoid political cost. It’s a sick mentality, but that’s how it is… The greek politicians could write a book with title “The Art of living at the edge of your economic limits”. They ‘re really experts on that. Actually they might as well give that book to Mr. Atzpodien, because the Germans aren’t used to living at the edge, they much more honest with the economics, so as soon as they run into trouble they can’t handle. While ours , when they are being told “you live at the brink”, they reply “yes, what’s news about it, we ‘ve been doing it for the past 30 years in worse conditions”…

They will probably start doing something about it when they drain all they can from the defence budget. But by then the global crisis will be over, the economy will return to positive growth and they will return to their old practices…

I agree the leaked MoU is pressure tactics, but pulling that kind of stunt while in 3-way negotiations with Gov/MoD & Elefsis is a joke. If they don’t like Tavoularis’ price offer, they don’t accept it, and the government is already interceding to make all parties happy. Thyssen *IS* seriously in trouble, financially: It’s no coincidence why they sign JV with UAE sheikhs NOW and not 5 years ago.

If Tavoularis doesn’t have the money to make Thyssen happy, and the price can’t be lowered any more, the government should either extend a loan to Elefsis with terms that ensure they get payed back, or buy back the shipyards either in full, or half with Tavoularis. … It seems strange if Greece buys them back completely for the EU fine to still be in place, though…

I agree, however as i said, it is obvious that there’s more happening here than we know. All this activity in the last 20 days is insane. First they open legal battle a few days before the elections. Then they rush to speak with the new gov and Tavularis, while in the meantime the sign MoU with someone else. Tavularis learns about it and stops negotiations. The goverment is upset so they meet again.

Giving loan to Elefsis could maybe seen as breaking competition laws from EU (which is what the original fine is about). But the vice minister of defence has already hinted that the greek state may step in and buy a share of the shipyards as part of a bigger consortium. Tavularis could jump in there too. Yes, the fine returning to the state would be very ironic. 🙂

Here’s the declarations of the MoD after last evening’s meeting with Mr. Atzpodien:

” Minister Mr. Pambukis and i received at the PM’s office the executive President of Thyssen Mr. Atzpodien in continuation of our meeting of Oct. 20.

During today’s meeting, a commonly accepted framework was shaped for the steps to take , in order to complete the scheme that has been agreed for the submarines and to find a viable solution for the Skaramanga shipyards.

The german part, will assume the responsibility to seek and propose responsible and trustworthy solutions for the Shipyards, solutions with financial and business depth. There will be formed a list of proposals which will be evaluated by a foreign House (evaluating Company), which will be chosen by the greek goverment.

In the meantime, the functioning of the shipyards will continue smoothly and the sea trials of the 3 submarines will begin as soon as possible.

The goal of the goverment is to complete as soon as possible the submarine programs and to find the more trustworthy and reliable solution for the future of the shipyards.

Until this happens, both the goverment and Thyssen, will operate in good faith, so to achieve this goal, which is a common goal”.

http://www.defencenet.gr/defence/index.php?option=com_content&task=view&id=9499&Itemid=40

Or to translate the above to more simple words:

– Vendil is going down the drain apparently (which means that the goverment DOES have veto over the sale).

– Confirms that Papanikolis is going to remain to the Germans (Farewall Papanikolis or should i say good riddance).

– They made a compromise as to let a foreign evaluating House to say whether the new owner is a good one or not, which i imagine is a relief for Thyssen.

– The shipyards in the meantime will continue to run, which is a relief for the workers.

Yes, the MoD is smart and obviously knows his legal stuff well enough as not to fall into the first Thyssen bluff.

The days of the old socialist goverment of 2002 where we would do colonialism-like contracts and receive everything like good boys seem to be over.

The MoD also said that he will make the arms procurements law to incorporate the latest EU directive on the matter, to improve transparency and reliability. Which given his background , is the best thing he can offer to the ministry.

In Greece, there are too many intermediaries, lobbying like mad inside the greek Pentagon and outside. From retired army officers to military magazines. If he manages to neutralize all that, it will be great.

Even for people not directly involved , just by reading military magazines for a few months, it becomes shockingly obvious that each one of them, is heavily praising certain companies and shamelessly trashing its competitors or the greek state itself , to the point that you feel that they insult your intelligence if they *think* that you are incapable of understanding that.

Anyway, let’s see for how long the new episode of the saga continues before the next “surprise move”…

P.S: I REALLY don’t understand why the Germans agree so promptly to keep the Papanikolis with this goverment, while they were attacking for years the previous goverment and arrived to the point to denounce the contracts. This alone tells that there is much more going on in the background than the simple story that we know. And it’s probably tied with the negotiations with the shipyards and/or the frigates. I can’t find another explanation. When the previous gov was saying “we don’t want the Papanikolis”, the Germans were going ballistics and wouldn’t talk. This goverment says the same, and they send Atzpodien and find agreement… Weird things… Same goes for the subs. When they denounced the contracts, the 3 U214s were “frozen” in their deliveries from Thyssen. Now a few days later they agree to start sea trials?

One surely positive thing out of this, is that the new MoD is professor of Constitutional Law, so he knows his legal stuff and announced modifications to the ways the arms procurements will be done, which include that all future arms contracts, will be in greek language, will be subordinated to greek laws and responsible for disputes will be greek courts.

Short brief about the latest news:

– In a short newspaper article, a few days ago, Tavularis confirmed that he was in negotiations with Thyssen, but he sais he won’t comment while he is doing business.

– Then yesterday, the newspapers pubblished news about the surprise new player, greek businessman, ex manager of Skaramanga (1999-2003), owner of a company called Veldin. He signed MoU with Thyssen for taking ownership of the shipyards. In short, Veldinl Real Estate would pay to Thyssen 180 mln euros and inherit all technical obbligations from Thyssen about the Skaramanga shipyards. The MoU is very badly scanned, but at least it’s enough to understand it’s true:

http://img88.imageshack.us/img88/7095/20684967.png

According to defencenet, this news caused on Tuesday the interruptions of negotiations with Tavularis.

– The workers syndicate don’t like this businessman and seems the goverment doesn’t like him either, because although he is ex manager of the shipyards, his company itself has nothing to do with shipbuilding and there are concerns that he isn’t a “trustworthy” owner. Although some newspaper articles disagree on what’s the view about this. According to one article: 1) the MoD is in favour of “letting the market take care of the shipyards, 2) the minister who supervises arms procurements is in favour of Tavularis, 3) the vice-minister of Defence spoke about a possible consorcium scheme which could include Tavularis.

The MoD made this morning statements, that he was expecting a detailed german proposal after their last meeting and he won’t accept fait accomplis from the german side fait accomplis. He threatened that he may veto the sale of the shipyards, if the goverment isn’t satisfied with the warrancies that the new owner can give for the welfare of the shipyards and workers. This, because according to the 2002 contract when the greek state sold the shipyards to HDW, there is a clause which states that if HDW was to sell the shipyards within the next 10 years, the greek state must also agree on the new owner.

– Result: There’s a new meeting this evening between the MoD and some other ministers and Thyssen’s Mr. Atzpodien at the PM’s office (in the absence of the PM).

– About the Papanikolis. It seems Thyssen is keeping him alright. This was pubblished today in a greek blog.

1) Papanikolis summer photo:

http://1.bp.blogspot.com/_IHr-jLQd3rI/SvGDreD8sAI/AAAAAAAACdA/h1F0MqnjYrA/s1600-h/pap2.jpg

2) Papanikolis today:

http://1.bp.blogspot.com/_IHr-jLQd3rI/SvGCJQWYiEI/AAAAAAAACc4/DJCfP9N_no4/s1600-h/pap.jpg

Where’s the difference one may ask! The name “Papanikolis” on the conning tower is now replaced by “NB 361”.

– This was what the MoD said today in press conference a few hours before meeting with Atzpodien:

“It is easy to find a solution for the subs, but first we must find a solution for the ownership status of the shipyards with financial and business depth. Our goal isn’t to dispute with the constructing company, but to solve the issue”.

And “We are trying to close the shipyards issue as fast as possible, because apart the submarines, there are also many open issues of shipbuilding policy, including the renewal of the Navy fleet”.

He also confirmed that the new goverment will continue direct negotiations with the French about the FREMM that the previous goverment started last May.

http://www.defencenet.gr/defence/index.php?option=com_content&task=view&id=9492&Itemid=139

I think it’s obvious that this goes beyond the simple matter of the subs, this has political and wider economical repercussions, there is one side trying to force the other into getting better terms and so on. One thing is for sure, the 1st concern of the gov is the shipyards, not the subs.

This solution sounds like a reasonable one for both sides, all things considered.

Keep in mind that there is nothing official yet, except for the comments of the MoD and the burst of mobility over the matter as soon as the new goverment took oath.

I usually avoid posting news about things that aren’t verified to at least 2 press articles. The comments of the MoD about the possibility of a commonly accepted solution is verified. Defencenet’s opinion is just her opinion quoting anonymous officials.

We shall see. The thing is, all military magazines in Greece, have an affiliation. Just before the elections another magazine was supporting the Germans on this, but oddly enough, in its last article, it repeated twice that Thyssen is open to negotiations It’s also anti-russian. Defencenet on the other side is supporting usually EADS and the Russians. Another minor magazine always supports the french. If you think about it, the most selling magazine in Greece sells about 6000 issues per month and it’s not purely military (has also generic material about flight and space). Defencenet comes a close second. There are other minor ones that sell maybe 1000 issues each. As you may well suspect, keeping the business profitable with so low circulation, isn’t easy. So if you read them it’s obvious that they support some “players”.

What i keep for certain about this news is:

– The new MoD sees a “light at the end of the tunnel”. The previous one didn’t.

– The Germans seem to be making an “attack of friendship” as we say in Greece towards the new goverment (i can’t believe that for the new goverment suddenly 160 Leo2A4 are available the next day they come to power while for the previous one 0 were available).

– I think it is obvious that Thyssen doesn’t want to go to the ICC if she can help it, that’s why Mr. Atzpodien rushed to the MoD’s office just 2 days after the new MoD made his program statements. I mean, if you are sick of the greek goverments and you think the only issue is that they don’t have money, you just go to the Court and if you have a legal position of steel, you will sweep the floor and make the greek goverment pay all with interests plus damages.

– It is obvious that the greek goverment doesn’t want the worker’s syndicate to be fired and have it protestign outside the parliament, specially since it has traditional ties with that syndicate.

I think a reasonable observer could agree there was more to the conflict than just what Thyssen mentioned in it’s “giving up on contract” press release. Even if Greece had paid 100% of contract (i.e. for Papa) the EU fine re: Skaramanga would clearly impact Thyssen’s account books/profitibability. (It sounds even more the case that the 209 issue was a marginal side issue)

I think the issue was also clearly political. The relations with the previous goverment, after the exchange of accusations was obviously not good. My doubts about the greek position aren’t about whether the Papanikolis was problematic when the Germans were saying it was perfectly fine. I am convinced that Papanikolis wasn’t “fine” at least up to the point that our Navy said that it wasn’t. If not for anything else, because i saw the video-documentary in greek tv with the retired greek admiral , who had nothing coming to his gain by lying. He won’t get promoted, he won’t get a salary to his pention, nothing. My doubt about the legality of the greek gov’s position comes from the moment that the Navy says that the Papanikolis is now within parameters. But that’s about all what’s the contract saying. If you don’t know the contract, one can only do “reasonable thoughts”. On the other hand, i am not sure as how the program of the U209 was tied to the U214 program and whether Thyssen had the right to freeze deliveries of all subs…

It could be as simple as Thyssen wanted a Frigate contract (or just MONEY) to justify their loss stemming from the EU fine but the previous government didn’t see why they should bend over to help Thyssen’s own problem… Though like you say, how does a change of government affect that? What is Elefsis’ relationship with PASOK? It seems like the deal is basically consolidating Greek shipbuilding under Elefsis, who was previously ‘competing’ against Thyssen/Skara, so the deal is basically getting Thyssen out of a marginal situation (given their EU debt) and turning the entire ‘pie’ over to Elefsis (w/ DCN). The previous government could simply have been approaching the issue on a contract-by-contract basis, while Thyssen was thinking about the ‘big picture’, i.e. with their debt from the EU fines and losing to FREMM, they were looking at a big write-off (of their investment) which was unacceptable to them (of course).

When the HDW bought the Skaramanga, it was expecting to get a “stable program” of contracts from the greek navy, starting with the U214. The Elefsis shipyards, have inferior capacity of shipbuilding for military ships. If i remember correctly, they can’t build a frigate class ship on their own, unless they expand the shipyards themselves. So , HDW was logically thinking, that she would get the U214/U209 program, the program of midlife upgrade of MEKO200 frigates and the new frigate program. Elefsis on the other side, was getting the “smaller ships” programs, like the Super Vitas , upgrade of Combattante class FACs and some patrol boats for the navy. IMHO, when the row about the Papanikolis started, this had as political conseguence, together with Sarkozy’s support to Greece in FYROM issue, to practically hand the frigate to the French, with virtually no official competition. If you ask me, this was a purely political way of the previous goverment to slap back Thyssen. Because even if you do want to give a contract to someone, usually you do accept offers from everyone just to bring price down. On the contrary the previous goverment simply last spring started negotiations with DCNS for the configuration of the frigates.

Tavularis, who has the Elefsis shipyards is said to have old ties with PASOK. They say that during PASOK’s last goverment he was “favoured” and expanded greatly with them. Apart Elefsis, he bought Neorion shipyards at the island of Syros (it’s civillian shipyard, not military).

Tavularis getting Skaramanga, solves his own problem of how to build the FREMMs in Greece, without having to expand Elefsis. My only doubt about this scenario, is that he becomes owner of a monopoly in Greece and there is EU legislation against monopolies… I am not sure if they have some formula to bypass this…

Otherwise, i see the whole deal as a plausible scenario. The Germans shake off their shoulders the EU fine, deliver the already built subs, build 2 more U209s (possibly in Germany), Tavularis pays the EU fine, but on the other hand solves his problem about the FREMMs and becomes monopoly in greek shipyards, which means that all future navy contracts (and civiallian ships) go to him without sweating, Thyssen sells the Papanikolis to someone else (if it’s perfectly fine i am sure some other buyer who wants U214 will gladly pay the full price for it) , the greek goverment solves the issue with the workers keeping their posts, Tavularis with which they have ties is happy and gets the FREMM contracts…

BTW, what is Greek Navy’s projected needs, say for the next ~10 years?

I wish i knew. The new goverment said that they will review all procurement needs from scratch and -of course- they will do cuts.

You see, the conservative goverment was saying that unless the new goverment continues with the measures the conservatives announced in summer, the budget deficit at the end of the year would be at 8%. The socialists got to power and of course they didn’t apply the measures of the conservatives but they actually also made tax cuts and salary raises because they say in this way the market will be warmed up and get out of the crisis earlier. Which means that the deficit will be at 12% and they calculate they will bring it down to 1 digit figure in 2010 and then bring it down to under 3% in the next years. I hope the EU makes them act faster. I am tired of the never ending prorogations. The money exist, it’s just that they don’t want to pay the political cost to take them. Well, sorry fellas, you must… Unfortunately they may go away with this “loose program” again because many other EU countries are also in breach of the stability pact so it’s possible EU rules will be loosened for all.

The problem in Greece, is that we don’t have capable politicians. And the other problem is that they don’t care about defence anymore, they see it just as a burdon, a pool of money from where to take from and throw it to welfare, instead of finding the money by a more just tax collecting mechanism, cutting the public sector overspending etc…

You see, the greek PM that was saying “we will not give away a single inch of greek soil” and proved that in the 1987 crisis, is dead. Nowdays we have the politicians who say “war can’t possibly be a way of solving things”. It shouldn’t be, but sometimes it’s either war or selling out your rights and surrendering without firing a shot. This is the paranoia in greek politics. If war can’t possibly be a solution, then it’s simple. Abolish the draft and maintain a 10.000 force of professionists and get over it. Either you have a threat or you don’t. Saying that you keep the draft and a sizeable force for your country’s size because you have a threat , but from the other size complaining that you give much money to defence and that war can’t be a solution, so you cut down expenses, is a paradox. Either you have a threat or you don’t. If you don’t have a threat, then you should follow Ireland’s example and that’s it.

My only hope about this goverment’s record in military procurements, is that the current MoD is a very intelligent man, university professor of Jurisprudence, who is the best hope for that ministry in getting something done right. He is not the guy that has the military at heart (very few do , specially amongst the socialists), but he is serious about his work. His program statements were good. If they don’t let him completely dry at funds, he has chances to do something good. There are huge funds in his ministry that are not well spend (overpriced material, intermediaries, bad use of facilities that cause overspending). He said he wants to correct that and slim things down. If he manages that, he could even come up with more money for true military expenditures than before.

When the new gov will make a revision of the 5 year procurement plan, we will know again, what the Navy’s (and not only) “needs” will be…

Your appraisal of a likely “political new contract” seems the realistic outcome…
Thyssen would probably be happy enough if the prototype was inducted/ paid for, to maybe even agree to cover a certain amount of additional maintenance it will need (fuel cell, non-commonality with production models) which may be ‘justifiable’ enough for the Navy to accept it…

It is also likely that the socialist goverment will be more “understanding”, because it’s the same party which signed the contract initially back in 2000. If the clauses prove not to protect well the greek state, the socialist party will also be blamed, because the socialist MoD that signed the contract, has in the past defended his position saying that the contract is strong and safeguards greek interests, which is why the Germans didn’t try to break it earlier. It is also well known, that the socialist party is basically controlling the majority of the worker’s syndicate of the Skaramanga shipyards. So, if the workers get sacked, the new goverment is going to take the heat from her own syndicate , which is something they wouldn’t want. The syndicate there is an old and “famous” one , even if small. They are capable of doing much fuss in the press and for a socialist party seeing your own syndicate members attack you is bad for your image. You know “we are socialists, we care about the poor, we have social conscioussness, etc”.

The only other thing I’m thinking about this whole issue is in regards to the fact that Thyssen is now “cancelling the contracts”, yet is holding on to about 80% of the total contract amount… In other words, given an annuled contract, how would Greece get it’s money back?

I ‘ve no idea… Maybe they hope into an ICC ruling in their favour which will blame the greek ministry for breaching the contract first and thus costraining it to accept the deal or losing its money alltogether?

Well… why not get a court to seize assets of HMS equal to the paid value? (production assets, at least some completed 214s), leaving Thyssen with the paper company and any assets in excess of this value, though with EU fine as well). With the production assets, go ahead (or threaten to) sign a contract with DCNS for local construction of Marlins/Andrasta.

I suspect that this is about court juristiction. In international contracts, the 2 parties agree on which court will be competent in case of a dispute. I assume that in the contract the 2 parties have agreed that the ICC will be place to solve the dispute.

See example here (Thyssen vs Maaden):

“The arbitral tribunal applied the CISG on the grounds that: the parties had chosen French law as applicable law and the Convention was in force in France at the time the contract was concluded”
http://cisgw3.law.pace.edu/cases/936653i1.html

In the above case, there was actually also an appeal where Thyssen managed to overturn a part of the previous decision, regarding the way the interests she had to pay were to be calculated. I don’t know if an appeal is possible for the U214 case too.

Your political settlement scenario seems more likely though…

It’s a speculation of mine, but i dot think that at least is an open option. If the Germans were really determined to go to ICC arbitration and that’s the end of it, they would have already closed the shipyards the same day they denounced the contracts. No reason keeping open a business that doesn’t produce anything if you intend to fight this at court. Unless you wait to see if you can reshuffle the cards with the new goverment and avoid the ICC alltogether.

Over-all, of course these types of problems are par-for-course with developing a new product, the only difference here being that Greece is the export customer and isn’t really benefitting from overall 214 production for other customers, which is normally the only rationale there is to eat costs for prototype ‘problems’ like this.

Yes. Personally i wouldn’t have signed to take the prototype too (i would have signed to buy 4 subs AFTER the prototype), but that’s too much to ask from a greek politician. Anyway, in a greek defence forum, there have been the opinions of an ex U209 officer and someone working at Skaramanga (or so they claim to be, but they seem legitimate). The issue is also political. The relations deteriorated rapidly soon after the test of Papanikolis started. The ret. officer writes for example “Everyone knows about the inclination, but fewer know about the “heavy submarine”. As soon as Papanikolis went to dive, it was so heavy that risked to dive “permanently”. Should i talk about the leak of sea water in the circuit of hydraulic oil, the incapacity of powering the entire comms compartment with electric power, the periscope vibrations at low speeds, the frying of the battle management console screens, the acoustic signature… Ok, let’s say it’s natural to have some problems since it didn’t exist as previous project. What created the “ice” between Greeks and Germans was the attitude of the Germans. I won’t refer to contracts, clauses and similar juridical disputes, as this is a subject i ignore. The Germans during the modifications were behaving like if they were addressing officers of a 3rd world country, in a few words they were offending our intelligence. For example, in order to correct the inclination, they thought of adding ballast (weight) to an already heavy to dive submarine. When the Greeks pointed out that this would cause safety issues, they were flat out ignoring us arrogantly. Then they returned from the sea trial with the tail between the legs and tried to find another solution. All this is witnessed by greek officers that were aboard the sub as observers (the Germans permitted up to 5 aboard each time). Their behaviour continued in all the duration of sea trials. Some things were corrected. For example the radio room powering problem was corrected after total re-routing of the power cables, something that took almost a month, while others remained (inclination, periscope vibration,leaks) with the Germans simply saying “you sign now the delivery and we will fix them later”. Simply the problem arised when the Navy Director of Arms Procurements, who for our good fortune was before that, head of the committee watching the construction of Papanikolis in Germany and ex submarine captain, refused to sign. From that point on, the rest of the comicotragic events we all know started…

I never said that the subs are to be thrown in the garbage bin. But when you know that we have paid a load of money for them, you demand to be delivered exactly as you were asked them to be. If you don’t do so, then you are risking of being characterized as 3rd world country in deed. As far as the german authorities’ assurances are concerned, can anyone tell me when was the last time that the AIP was activated? Have they completed the station of hydrogen and oxygen refuelling at Salamis naval base? This is something we have paid for and goes together with the program. At the date that Papanikolis was supposed to be delivered, these works hadn’t even started, the excavation for deepening the seabed next to the dock for the hosting of the subs, started with almost 1 year of delay, i was there seeing that. I don’t have anything against the Germans but in the specific project they treated us like 3rd world subhumans that were incapable of undestanding what was happening to us. So it is natural for the Navy today to be suspicious.”

This is on the other hand is a brief summary of the one working at Skaramanga, which shows how Papanikolis became the “guinea pig” so that the next ones wouldn’t suffer the same “patch fixes”. Some issues were addressed since the beginning and others while the construction was underway.

“I don’t know what happened in Germany, but i know very well what happened to the 3 ones which were subsequently made in Greece.

The inclination problem was solved with internal modifications and no need for ballast I can’t give more details for obvious reasons.
The problem of periscope vibrations at low speeds is solved, at high speeds there are vibrations still, but moderate ones.
The water leaking was solved and as a matter of fact the solution came from people at Skaramanga with use of different airtight flanges (change of material).
The acoustic signature issue has been solved with a modified propeller. The propeller that was showed in the photo in the newspaper is no use, it has changed.

We never had any problem in the powering of the radio room or the satcoms.”

Now, a similar “ice” has grown also between the shipyards and the goverment and the bureau of arms procurement, since the time that the Germans insisted that the subs were ready and was pressuring to accept them while the Navy was saying that they weren’t ready. Then the “ice” increased when Thyssen started to threaten sacking the workers which was seen as blackmail in Greece and when Thyssen started making pubblic campaign accusing the goverment of not wanting to pay because of lack of money.

Not that the greek economy was ever healthy, however, i find it hard to believe that the problem of the greek goverment is that it couldn’t afford 350 mln in 4 years to pay the Papanikolis, which is a drop in the ocean, compared to the today economic crisis, where the deficit of this year’s budget is at 6% , translated in 7,5 bln euros and as the minister of economics said , if the new gov doesn’t apply his summer announced measures in time, by the end of the year it will be at 8% and still we haven’t gone bankrupt yet as some were certain. Specially when other new contracts continued to be signed from 2005 onwards. ΕDIT. Τhe real problem in Greece throughout time, is epxenditure of pubblic sector in futile or inefficient ways (cost of bureaucracy equal to 7% of GDP for example) and the huge tax evasion, which no goverment wants to touch fearing political cost. So the only ones who are not evading taxes are those who live on a salary and thus can’t hide their income. Otherwise, the minister of economy himself calculated that the real GDP of Greece is +20% compared to the official one, if one takes into account non declared income. My hope is that due to the stability pact the EU will one day force a greek goverment to do something about it… Because otherwise we have the 2 main parties with 2 leaders who compete on who is the most incompetent.

There is also a political problem with accepting the sub itself, i think, exactly because of its “notorious” name. The opposition could easily try to attack the goverment for accepting a “defective, used and patched up” submarine and if trouble was to arise with its operation or even worse an accident should occur, it would be a total disaster.

Anyway, according to a newspaper article the entire delay of the program is due to the delay of the Papanikolis. Contract signed in 2000. The first sea trial conducted in May 2005, 2 months after the expiration of the delivery timetable. And then the problems of the sub started with the Germans saying the sub was ready to be delivered and the greek navy denying delivery. On October 2008 the german BWB informed the greek authorities that according to its opinion, the sub was satisfying the contract parameters. A few months later the greek navy Chief admitted that the sub is now within parameters but the Navy won’t accept it (for reasons i have written before in this forum) and instead it will plan to build a new U214 to go back to the original number of 4.

Anyway, this is a photo of Papanikolis in 26 August 2009, apparently under repairs in Kiel. It’s probably the most patched up and repaired “brand new” submarine in the world:
http://img268.imageshack.us/img268/9642/268x.jpg

EDIT: So I take it Thyssen doesn’t have any real problems with the 209 upgrade program,
but tying it to the Papanikolis issue increases the pressure on Greece by completely depriving it of a modern sub fleet…?

No, the issue is similar (economic difference), with the difference that only 1 sub is ready. Of the 524 mln, 168 concern the U209 program. This was another contract, of 2002 (cost 890 mln euros). How the U214 and U209 were connected is unclear to common mortals because of contraddictory press articles.

In 2009 there were rumours of a pending agreement between the shipyards and the greek bureau of arms procurements in scraping the upgrade of the 2 U209 and instead building 2 new U209 AIP.

This because the 1 one took too much time to finish and mid life upgrade becomes “obsolete” for the other 2. The 1st was supposed to finish in 2007, instead was set to water in 2009. One article says that the agreement to leave alone the upgrade of the 2 U209 was done after agreeing in paying 108 more mln to the shipyards. The shipyards once paid, insisted out of the blue to take the Papanikolis too otherwise they wouldn’t go on with the building of the new subs.

Another article though, claims that the Germans agreed to build 2 new U209 with the conditions to 1) be paid 108 more mlns and 2) to accept the Papanikolis. This is a bit weird, since the greek Navy chief had announced that even though the sub is now within parameters, the Navy won’t accept it. But, can’t rule out the possibility completely. The only common fact is that it appears that in summer 2009 a last payment of 108 mln euros was made, but nothing changed of course.

Anyway, in an elections period in Greece it’s hardly the right time to understand who’s telling the truth, because all media are supporting a certain political party and write accordingly. Personally i had managed to keep track of what’s happening up to the point that our Navy Chief made his announcement. With the subsequent articles, i was of the idea that the problem was almost solved with Thyssen selling the Papanikolis to the Poles or the german navy, the greek navy getting the other 3 and ordering a 4th new , getting the 1 upgraded U209 and building 2 new U209. Instead none of this happened.

Now, either there will be a political solution with the new goverment and some compromise will be found or the issue will end up to ICC and someone will pay the other with interests.

One will have to wait and see what the new socialist MoD will say on the issue. I also think that if Thyssen decides to close the shipyards at Skaramanga, it will mean that no political solution was found with the new goverment and the story will end up to the ICC.