March 23, 2010: For the last four years, Greece and German submarine builder ThyssenKrupp have been arguing over the quality of German work on the first of four Type 214 boats sold to Greece. The Greeks have now agreed to the original deal, and declared the quality issues resolved.

Four years ago, the first Type 214 arrived from Germany, and the Greeks quickly declared that the boat suffered from 400 defects. The other three 214s were being built in Greece, and the first one of those was about ready for launch.

When the Germans first heard of the complaints, they thought it was politics. A new Greek government has just been installed, and it was common for the new officials to try and make the previous gang look bad. The Germans also expected that the Greeks were using this defect list to renegotiate the contract, and pay less than they had agreed to.

The Germans eventually concluded that nearly all the 400 defects were bogus. For example, the Greeks asserted that the 1,700 ton, 214 class boats, when traveling on the surface, the rolled excessively in bad weather. This could be disastrous, as the waters off Greece, in the Winter, are quite rough. But they are equally rough off the coast of Germany.

The Greeks also asserted that the air-independent propulsion (AIP) system did not work as promised. The output power, they insisted, was less than specified, and the fuel cells overheated, and must be shut down, after several hours of operation. This could happen operating in the warmer Mediterranean. The Germans designed, and used, their AIP system in the cooler waters of the North Sea, but they also took into account tropical conditions, as other users of their subs also operated in warm waters with no problems.

The Greeks insisted that the propellers were noisy, and that the periscope vibrated when the boat was traveling faster than five kilometers an hour. The Greeks claimed there were leaks, and some equipment didn't work, or work as specified. The Germans took the claims seriously at first, and hustled to investigate, and fix them. After all, while the Type 214 boats are similar to earlier Type 212 and Type 209 models, there are a number of new design elements on the 214s.

The Germans eventually found that all the claims were false or exaggerated. In response, the Germans sued for breach of contract. The Greeks responded by refusing to accept the sub, which remained tied up in Germany. Then the Germans threatened to withdraw technical help for the Greek shipyard that was building the other three boats, and go to court to prevent the Greeks from using any of the German technology. Meanwhile, the three boats constructed in the Greek shipyard are largely finished, but not complete. Two years ago, the Greeks offered to settle the dispute, but they didn't have the cash to make the required payments.

The new deal with have the Greeks accept the first sub, and then sell it. The Greeks still won't admit that their defect list was a fraud. The Germans will resume assisting the Greek shipyard, and withdraw its lawsuits. Greece will make required payments. It's believed that Greece's current financial problems (spending more than they promised the European Union that they would) was a major factor in this settlement. This debt problem has forced the government to cut way back on spending. That, plus the German threat to, in effect, shut down the Greek shipyard, and throw 1,400 people out of work, forced the government to back down on the crises it had created.