Lockheed wants to torpedo the French Frigates in Greece

The United States has the firm intention of not letting the Greek market escape its control, despite the Letter of Intent signed by the Greek Minister of Defense about Naval Group Defense and Intervention Frigates a few weeks ago. Thus, the American group Lockheed proposed to Athens, unsolicited, an offer for 4 MMSC frigates, close to those chosen by Saudi Arabia to the detriment of the FREMM, for a budget of €2 billion, i.e. a more than competitive price for four vessels of this tonnage.

This is not the first time that the United States has tried to sabotage discussions between Paris and Athens. Already, a year ago, Washington had pushed the Australian offer for 2 second-hand Adelaide class frigates with the Greek authorities. Ultimately, it turned out that Canberra's offer did not understand SM2 missiles, and that an additional order for these missiles from Raytheon would have cost more than the acquisition of the two ships themselves. Subsequently, and still with the aim of distancing the Hellenic Navy and the National Navy, the American plenipotentiary authorities in Greece began to publicly discuss the sale of second-hand Ticonderoga cruisers to provide the desired anti-aircraft firepower. by the Greek military authorities.

OH Perry Adelaide Defense Analysis | Military Naval Construction | Defense Contracts and Calls for Tenders
The United States had already tried to derail negotiations between Paris and Athens with second-hand Australian Adelaide frigates

Furthermore, the United States has no shortage of arguments to put forward. Thus, when signing the contract to upgrade 80 F16s to Block 70 Viper standard, a contract signed for an amount of $1,6 billion (€1,4 billion), Washington very insidiously accompanied this offer with aid of 600 million from the fund for the modernization of European armed forces. In fact, rather than $1,6 billion, the modernization will have cost the Greek taxpayer only $1 billion, €850 million, barely more than €10 million per device. It is to be expected that the offer concerning the MMSC frigates will be accompanied by similar aid, likely to bring the price of 4 MMSC to a price close to that of the 2 French FDI, without however any notion of industrial sharing .

The American approach is, in fact, only the application of the “positive valuation defense” doctrine to exports of defense equipment produced on national soil. Indeed, in the United States, the budgetary return on Defense industrial investment amounts to around 80% excluding exports, for around twenty jobs created/secured per million annual euros invested. By granting a deferred discount of 40%, as in the case of the F16 modernization contract, the State's budgetary revenues therefore remain in excess of 80%-40% = 40% of the contract amount. American generosity, in this case, is not, since it is simply a question of securing investments with a positive budgetary value in the 2 years to come.

Greek FDI Defense Analysis | Military Naval Construction | Defense Contracts and Calls for Tenders
The IDFs proposed by Naval Group have a military potential far superior to Lockheed's MMSCs, in all areas

France would, in this respect, be particularly well placed to apply this type of model, because the country has the best budgetary return, along with Germany, of all Western arms exporters, due to the very high level of social and tax revenues applied to salaries, the high level of compensation and social support for returning to work, and the low exposure of the French Defense industrial and technological base to imports. Thus, in France, one million euros invested each year in the Defense industry generates or secures 27 jobs excluding exports, and each BITD job generates on average €52.000 in revenue and budgetary savings per year. In fact, €1 million invested generates, in France, €1,4 million in budget balance at state level.

With such a budgetary coefficient, France could propose aid for Defense equipment equivalent to 50% of the contract amount, while conceding 25 to 30% of industrial transfers with customers, and maintaining a budgetary return of around 50% of the total contract amount. In the case of Greece, such a model would allow the Hellenic authorities to recover 65% of their investments in French defense equipment, while creating 45 jobs per annual M€ invested in local industry. Remember that unemployment still affects nearly 20% of the working population in the country. This model had been the subject ofan in-depth study ahead of the legislative elections in Greece, which saw the New Democracy Party come to power. It made it possible, in the long term, to recapitalize the Greek forces, whether the navy, the air force and the land forces, without it being necessary to modify the rates of levies or taxation in the country. and without altering the plan to return to the country's budgetary and social balance, while taking into consideration the reductions in charges promised by New Democracy.

Mirage2000 5 of the Hellenic Air Force Defense Analysis | Military Naval Construction | Defense Contracts and Calls for Tenders
The modernization of the Greek Mirage 2000-5 could also represent an interesting file for the French BITD

Greece can represent, for France, a strong ally for the construction of the Europe of Defense as imagined by the French authorities, especially since, as President Macron emphasized today, the NATO has shown itself incapable of reacting to Turkish decisions in recent months. Without innovation in the field of budget marketing, French offers could well find themselves downgraded compared to the United States. In this matter, the solution cannot come from Athens, but only from Paris, which must show its capacity to respond to Washington's attempts at manipulation beyond simple postural indignation.

Update 11/11: the Greek site at the origin of the information published a message according to which the price proposed by Lockheed would not be $2 but $4 billion for the 4 frigates, putting the ship at €900 million, compared to 650 for the IDF.

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