Greece considers offset reform following wave of penalties

The Greek government has indicated that it is to reform elements of its offsets legislation in order to remedy a series of internal failings which have culminated in a spate of penalties, imposed by Athens, against foreign arms suppliers.

Athens has applied penalties to approximately 70 offset agreements with US primes, as well as a number of top contractors in France and wider Europe over the past nine months in connection with arms deals spanning several years, according to a US industry official.

Speaking to Jane's on 10 May, on the condition of anonymity, the figure said that the imposition of the penalties occurred "in the absence of action by the Greek government on requests for arbitration or renegotiation of the contracts by the supplier companies".

Jane's has learned that much of the blame has been laid at the door of the General Directorate for Defense Investment and Armaments (GDDIA), the Hellenic Ministry of National Defence's (HMoND's) procurement arm.

According to the US source, the offsets contracts affected fell into three categories: "Some companies were awaiting MoD approval of offsets projects; some offsets contracts needed to be amended; and some obligations had actually been completed, and the companies had asked for recognition of this."

He added: "The Greek MoD - specifically the GDDIA - procrastinated." The result was that "the 70 or so offset agreements which have expired over the last two years moved into the penalty phase".