India’s army chief warns over defence-Letter Leaked

India’s top military chief has warned that the country’s tanks have run out of ammunition and its air defences are obsolete despite increases in budget defence spending, leaving it vulnerable to any external threats. The warning was made earlier this month in a leaked letter, published by a national newspaper, from General VK Singh, the chief of army staff to prime minister Manmohan Singh. The leak will come as an embarrassment to Delhi as it prepares to welcome heads of state for a summit of Brics countries starting on Thursday. In the letter, the general said the country’s tank fleet was “devoid of critical ammunition to defeat enemy tanks” and warned that air defence was “97 per cent obsolete”. He also outlined “woefully” ill-equipped special forces and “large scale voids” in surveillance in a region where India faces two “inimical neighbours” and a potent terror threat. These warnings, on the eve of the arrival of Chinese president Hu Jintao in the Indian capital, reinforce views held by some former national security advisers and other senior commanders that India is not preparing sufficiently for the rising military might of a more assertive China. The letter surfaced only days after India was declared by the Stockholm International Peace Research Institute as the world’s biggest importer of arms, surpassing neighbouring China. The think-tank estimates that India accounted for 10 per cent of global arms imports between 2007 and 2011. India, the world’s largest democracy, has an annual defence budget of $40bn, and is in negotiation with France’s Dassault for the supply of 123 jet fighters, worth about $20bn. A.K. Antony, the defence minister, confirmed the existence of the letter in parliament on Wednesday amid calls from the government’s allies for the army chief to be sacked. “The government is determined to do all that is needed to continue to assure the safety and security of India,” said Mr Antony, a trusted ally of Congress party president Sonia Gandhi. The parliamentary opposition, which has drubbed Mr Singh’s government for high-profile corruption scandals over the past two years, described the letter as “extremely disturbing concerning defence preparedness”. Gen Singh has become a highly controversial figure in recent weeks, and is widely viewed as an antagonist to the ruling party after a bitter row over his retirement. Gen Singh took the defence ministry to the Supreme Court in February after claiming he was a year younger than military records showed. He lost the case. This week, Gen Singh said Mr Antony had failed to follow up on the general’s earlier disclosure that he had been offered a $2.8m bribe to buy faulty trucks for the army. “Fiscal allocations [for the military] by themselves tell a partial story,” said Uday Bhaskar, a Delhi-based defence analyst. “Creating appropriate military capacity requires a certain degree of political commitment and institutional integrity that appear elusive in the Indian context.” “Decision-making remains paralysed since the major political parties have chosen to attack one another over corruption and transgression issues. As a result, India’s military capacity has glaring gaps.” Maroof Raza, a defence analyst, said India’s defence forces were falling victim to a confrontation with the nation’s bureaucracy. “The growing trust deficit between the army chief and the ministry of defence has led to a situation where the government and bureaucracy have decided to not let anything move,” he said. “Ours is a shocking state of affairs.”

German effort to save euro zone comes at a cost

In the course of Europe’s economic crisis, Germany has pushed its neighbors into a new fiscal treaty, demanded that other governments take tough austerity measures, forced losses on private investors who hold Greek bonds and helped shove uncooperative politicians out of office. For demanding that other nations accept that painful medicine, Berlin has paid a price of its own: potentially $600 billion in loans, guarantees and other payments to help keep the euro zone intact. Germany is Europe’s economic engine and the political power at the heart of the 17-member euro region. Without its checkbook, the experiment in a common currency would be doomed, but Germany has too much riding on it to see it fail. The single currency has provided Germany with a ready export market free of shifting exchange rates and other risks. Much of what Germany has offered is in the form of loan guarantees that may never cost the country a nickel and that so far have had little effect on its government budget or credit rating. But if the guarantees ever come due, they could turn Germany into one of Europe’s biggest debtors — and compromise the region’s economic health. The cost could approach perhaps 20 percent of Germany’s annual economic output. German central bank head Jens Weidmann spoke of the risks on Wednesday, saying that efforts to stop the crisis with a “wall of money” were akin to the biblical Tower of Babel. It “will never reach heaven. If we continue to make it higher and higher, we will, in fact, run into more worldly constraints — both financial and political ones,” he said in a speech in London. The final tally of Germany’s commitments should become clear in the next few days when euro-area finance ministers meet to increase the size of the region’s bailout fund. Most euro-zone nations contribute to the fund. But the biggest burden rests squarely on Germany, whose annual economic output of roughly $3 trillion represents about a quarter of the euro region’s total. At the meeting, regional leaders are likely to complete the establishment of the crisis-fighting system that they began in the spring of 2010. They are likely to increase the size of the fund by a minimum of around $250 billion, to more than $1 trillion. Throughout the crisis, Germany has been resistant to bailouts and subsidies. Its opposition repeatedly pushed the region to the brink of disaster — including what Greek officials say was a near default in May 2010 before Germany agreed to an initial bailout. “It has not been cheap to get the consent of Germany,” said Carlo Bastasin, a visiting fellow at the Brookings Institution. He said the price included the ouster of Greek and Italian leaders who had not taken strong enough action to tackle their nations’ debts and harsh austerity measures, such as deep cuts in public spending, in several countries. “The brinksmanship was a precise strategy — and it worked pretty well in terms of results,” he said. In the debate over the size of the bailout fund, Germany argued for months that no increase was needed — and that it might even be counterproductive if it eased the pressure on governments to improve their finances.