By the Blouin News Business staff

Portugal to sell off Army properties in modernization bid

by in Europe.


Portuguese and American defense ministers review Portuguese soldiers at a fort outside of Lisbon, January 15, 2013. AFP/AFP/Getty Images

Portuguese and U.S. defense ministers review Portuguese soldiers at a fort in Lisbon, 1/15/2013. AFP/AFP/Getty Images

Portugal’s army said on Tuesday that it will be selling or renting 60 properties, including barracks, forts, airfields, and hospitals, to help pay for its modernization program. Portugal, one of the poorest countries in the E.U. and among the hardest-hit by the euro crisis, received a $107 billion bailout from the E.U. and IMF in 2011. The country formally finished a painful three-year economic austerity program in May 2014, but it still faces major economic challenges as it seeks to cut expenses further while reviving growth under the watchful eye of the European Union.

Portugal’s military programming law was approved on January 22, and covers the next twelve years. It aims to increase efficiency in both cost and structure, aiming for a smaller, better-equipped military that is flexible and can quickly deploy forces to participate in NATO and UN peacekeeping operations. The government is continuing to downsize its military forces by cutting 10% of personnel, on top of previous reductions in their salaries and pensions (along with those of all civil servants in the public sector) during the austerity program.

Portugal hopes to gain $195 million over the next seven years from the sales and rentals of these military properties. A full list has not been published yet, but at least a dozen forts and barracks and three military hospitals are up for sale. Some of the buildings have historical value dating back centuries, and could become museums or tourist attractions. Private companies may be able to make better use of the hospitals and airfields since they could draw on a broader clientele.

What this case vividly shows is that European defense spending is like in the age of austerity.  As an E.U. and NATO member, Portugal’s military strength is largely irrelevant compared to its economic viability. It plays a bit role in NATO operations, which is welcome but certainly not essential or irreplaceable. Meanwhile, like the rest of Europe, Portugal remains under the U.S. security umbrella, eliminating the need for most conventional military forces and equipment. As the U.S. reduces nonessential military bases in Europe, the host governments’ concerns are not about greater security risks but rather the economic effects. The U.S. will be withdrawing two thirds of its personnel from the Lajes air base in the Azores, a Portuguese island chain in the Atlantic, and Lisbon is upset by the impending harm to the economic livelihood of its citizens living there.

By contrast, Portugal’s economy, despite being smaller and poorer than most in Europe, is so interconnected with the E.U. and eurozone economies that it must be kept afloat in order to prevent an economic ripple-effect catastrophe. Missing its deficit reduction targets is a greater threat to Portugal’s national security than selling off some medieval forts.