Countries encouraged profligate spending on arms that Athens could not afford, say critics...
Over much of the last decade, Greece - which has a population of 11 million people - has been one of the top five arms importers in the world. Most of the vastly expensive weapons, including submarines, tanks and combat aircraft, were made in Germany, France and the US.
The arms purchases were beyond Greece's capacity to absorb, even before the financial crisis struck in 2009. Several hundred Leopard battle tanks were bought from Germany, but there was no money to pay for ammunition for their guns. Even in 2010, when the extent of the financial disaster was apparent, Greece bought 223 howitzers and a submarine from Germany at a cost of ?403m.
In the new bailout agreement, Greece will pledge to reduce its defence spending by some ?400m. Eurozone leaders have hitherto been notably more tolerant of Greece's arms expenditure - though this is twice the size of the Nato average as a proportion of GDP - than it has of excessive spending on health or pensions.
"It is easily forgotten when Greece is criticised that there has been not very subtle pressure from France to buy six frigates," says Thanos Dokos, the director general of the Hellenic Foundation for European and Foreign Policy.
He adds that Greece was unwise to be the first purchaser of new weapons systems, such as German submarines, that still had technical glitches.
There is now a serious disparity between the limited resources of the Greek state and its very expensive weapons.
Simos Kedikoglou, an MP of the New Democracy party, says that "pilots of F-16 [combat aircraft] are paid ?1,200-a-month salary while they fly aircraft worth ?60-70 million."
Exercises are now being cancelled to save small sums of money.
Greece also has the world's largest merchant marine, but its navy is cutting back on its anti-piracy patrols to protect vessels in the Indian Ocean.
The justification for Greece's large army - 156,000 men compared to 250,000 in the German army - is the perceived threat from Turkey, which requires the Greeks to keep some form of military parity with a nation with seven times as many people.
Mr Dokos says that fear of being labelled unpatriotic has prevented the opposition in parliament from seeking a in defence expenditure. There has never been a debate in parliament about how far a Turkish threat really exists.
Many contracts signed at the height of Greece's spending spree cannot now be cancelled because of penalty clauses and such money that is left will be spent on maintenance.