German 'hypocrisy' over Greek military spending has critics up in arms
A few months before submarines became the talk of Athens, Yiannis Panagopoulos, who heads the Greek trade union confederation (GSEE), found himself sitting opposite Angela Merkel at a private meeting the German chancellor had called of European trade unionists in Berlin.
When it came to his turn to address the leader, he instinctively popped the question that many in Greece have wanted to ask. "After running through all the reasons why austerity wasn't working in my country I brought up the issue of defence expenditure. Was it right, I asked, that our government makes so many weapons purchases from Germany when it obviously couldn't afford such deals and was slashing wages and pensions?"
Merkel's reaction was instant. "She immediately said: 'But we never asked you to spend so much of your GDP on defence,'" Panagopoulos recalled. "And then she mentioned the issue of outstanding payments on submarines she said Germany had been owed for over a decade."
Greek profligacy may be blamed for triggering the debt crisis that now threatens to tear the eurozone apart, but if there is one area where Berlin is less excoriating of state largesse it is in Athens's extravagant taste for arms.
http://www.guardian.co.uk/world/2012/apr/19/greece-military-spending-debt-crisis
For the benefit of anyone who'd not picked up on this before Greece was not allowed to cut its defense budget under the terms of the most recent bailout. 
= new reply since forum marked as read
Greece's austerity doesn't extend to its arms budget http://www.guardian.co.uk/commentisfree/2012/mar/21/greece-austerity-measures-military-spending
Greece Spends Bailout Cash On European Military Purchases http://www.zerohedge.com/news/greece-spends-bailout-cash-european-military-purchases
Greece needs to stop its military spending or there will be no country there to defend.
Apparently, the Merkozy twins have insisted that Greece honour its existing arms contracts and even sign new ones. When Greece announced in September that it would not take delivery of four submarines built by German company, ThyssenKrupp, alleging technical faults, this led to accusations that Athens is effectively defaulting on a €520m contract. They also cancelled tenders for a flight of maritime aircraft worth up to €250m. No wonder Merkozy are calling for an unelected EU official to be in charge of Greece’s budgets. http://atkinsonsmallblog.dailymail.co.uk/2012/01/greece-needs-to-stop-its-military-spending-or-there-will-be-no-country-there-to-defend.html
It may that €400m isn't significant a in terms of thier overall military budget - just a token gesture. I assume the "Merkozy twins" refers to her the frog. Maybe I overstated the situation and they were simply restrained. 
