Qatar eyes Greek defense companies

03/01/2013

Greek premier is looking for big investments, Qatar is looking for deals.

By Andy Dabilis for Southeast European Times in Athens -- 03/01/13

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Greece Prime Minister Antonis Samaras is expected to visit Qatar this month. [AFP]

As Greek Prime Minister Antonis Samaras readies a rescheduled visit to Qatar to woo investment for his cash-strapped country, his hosts are already showing interest in acquiring troubled Greek defense companies as part of a long-delayed massive privatisation.

Samaras was to visit the Gulf State in November, but had to put it off to deal with his country's crushing economic crisis and attend a critical meeting of Eurozone finance ministers. The EU-IMF-ECB Troika, which is putting up 239 billion euros in two bailouts to prop up the Greek economy, has been pushing the government to accelerate the pace of privatizations that have been set aside while Greece imposed austerity measures.

Among the industries on the block are the struggling Hellenic Defense Systems and Hellenic Vehicle Industry.

Hellenic Defense Systems was formed in 2004 by the merger of Greek Power & Cartridge Company, which has made ammunition for 140 years and counts NATO as a customer.

Hellenic Arms Industry makes infantry weapons, mortars, weapon and missile systems, gun powder and aircraft payloads. The Hellenic Vehicle Industry makes armored fighting vehicles but has been unable to secure a government contract because of a lack of funding for defense purchases.

"Qatar is interested in a series of privatisations regarding the Greek defense industry," Greece Defense Minister Panos Panagiotopoulos said in a statement after meeting with Qatar's Crown Prince Sheikh Tamim bin Hamad al-Thani in Doha. He said Qatari officials believe that by the time Samaras visits, expected sometime late in January, that, "The conditions will then be ripe for specific proposals and investment plans in our country."

John Nomikos, defense analyst and the head of the Research Institute for European and American Studies in Athens, welcomed the idea of Qatari investment. "The Qatar government officers are very serious and follow the rules when they co-operate with foreign governments," he told SETimes.

The defense companies could be a plum for Qatar, which is also looking at other investment opportunities during Greece's economic crisis. The Troika wants Greece to privatise state enterprises and properties in hopes of raising 11 billion euros by the end of 2016, below its previous privatisation revenue target for 19 billion euros by 2015.

Critics argue that the country would be selling its enterprises and lands far too cheaply as investors know the government is trying to raise revenues to write down 325 billion euros in debt.

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Other investment areas to be discussed by Samaras include real estate deals such as the Elliniko project and a 620-hectare-acre former international airport site on Athens' southern coast. Qatar Holding, the investment arm of Qatar's sovereign wealth fund, is participating in the tender process of the project, a spokesman said.

Qatar has quietly been investing more in Greece. The royal family last summer acquired Oxia Island, near Ithaca in the Ionian Sea, and Qatar Airways said it would use Athens' International Airport for direct flights to and from New York, the only carrier to do so.

"Over the past few years, there has been a lot of talk regarding potential investments by Qatar in Greece either in energy, tourism, banking or construction sector. For the time being none of those has become a reality for a variety of reasons," including competition, bureaucracy and political conflicts, Ioannis Michelatos, who heads the Athens-based Institute for Security and Defence Analysis, told SETimes.

"The improvement of the macro-economic climate in Greece, combined with the volatile situation in the Middle East, has put this country firmly in the investment plans of Qatar, rendering the planned visit by the Greek prime minister to the Gulf state very interesting indeed," he said.

This content was commissioned for SETimes.com.
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