Greece - Country Commercial Guide
Defense
Last published date:

Overview

As the country has rebounded following the financial crisis and pandemic, the Greek government is focusing on defense expenditures after years of underinvestment in this area and prior lack of capability for big-ticket purchases. In 2020 the Greek government launched a modernization program to upgrade and modernize its defense equipment as well as enhance its capabilities, announcing a major defense budget of $6.7 billion to justify procurement of frigates, fighter jets and more. The government also encouraged the privatization of bankrupt state-owned enterprises, forming partnerships with foreign investors to encourage modernization and global standards of management. Such efforts continue today as multiple firms engage the government regarding remaining state-owned assets.  The appetite to privatize such assets for greater efficiency in a post-Ukraine world has become apparent.

Greece’s defense budget totaled $8 billion in 2022. Over the next decade, experts predict a 3.6% growth in defense spending to align with the stronger long-term economic growth forecast. Greece’s spending on armed forces remains robust as it is one of the few NATO members with  defense spending above the Wales Summit threshold pledge of  spending 2% of gross domestic products on defense, and 20% of that on new equipment. Greece is exceeding its Wales Summit pledge, spending 3.7% of its GDP on defense in 2022, with 45.3% allocated to major equipment and modernization. The Hellenic Ministry of Defense is working to restructure and upgrade the country’s armed forces. There have been a number of high-profile deals over the past couple of years including the pending purchase of F-35s (currently awaiting U.S. Congressional approval), the upgrade of F-16s, and the purchase and upgrade of multiple frigates and small surface combatant vessels.

The U.S.-Greece defense and security relationship is particularly strong. The U.S.-Greece Mutual Defense Cooperation Agreement (MDCA), which was updated in 2021, supports U.S. forces operating and expand bilateral military activities in Greece. The enhanced MDCA is aimed at boosting U.S.-Greek interoperability, supporting Greece’s ability to contribute to regional stability, and increasing NATO’s ability to protect its southeastern flank, enabling the expansion of U.S. forces in Greece to support strategic regional objectives.

Greece benefits from Government-to-Government military sales frameworks with the United States, which allows it to secure certain items though Foreign Military Sales or Excess Defense Agreements. The Greek government is prioritizing developing local industry and is seeking to increase local production with strong international partnerships.  Two examples of that partnership, include the continued hosting of U.S. naval forces at Souda Bay and priority access granted to U.S. military forces at the Port of Alexandroupoli in northeastern Greece.

Greece: Military spending, in billions (U.S. dollars)

Military spending in 2021, the last date for which time data was available, totals $8.08 billion. (Graphic: the GlobalEconomy.com) 

Greece - Defense Expenditures 2014-2021
Greece Defense Expenditures 2014-21

Opportunities

The Hellenic Armed Forces are the combined ground, naval, and air forces of Greece. They consist of the Hellenic Army, the Hellenic Navy, and the Hellenic Air Force. The civilian authority overseeing the Hellenic Armed Forces is the Ministry of National Defense. The General Directorate for Defense Investments and Armaments (GDDIA) is responsible for the planning and implementation of decisions on matters of Defense Programs and Contracts Procurement of major or other material Armament Programs, Contracts Offset (offsets), Quality Assurance and Investment Defense and Technological Research. Most of the opportunities at the Hellenic Ministry of Defense will need to be pursued through G2G frameworks based on what is being sold. For published tenders and procurements, please also visit the GDDIA website.

A portion of Greece’s budget will go towards the ongoing modernization programs deemed essential to maintain stability in the Balkan region and in the Aegean.

Greece is in the process of acquiring F-35 fighter jets as it seeks to boost its air defense capabilities.

In January 2021, the Greek MOD awarded a contract to France for the purchase of 18 Rafale fighter aircraft for €2.5bn. Greece also announced the purchase of additional Rafale increasing the total to 24. In December 2019, Greece awarded a contract to U.S. defense firm Lockheed Martin for a major upgrade of its F-16 fighter jet fleet over the next seven years. Upgrade work is expected to be completed by 2027.

Hellenic Air Force (HAF)

Procurement program includes:

  • Unmanned aerial vehicles (UAVs)
  • Spare parts and maintenance

For more information, visit HAF’s website.

Hellenic Navy (HN)

Procurement program includes:

Upgrade and modernization of Maritime Aircraft and Surface Ships

Naval Vessels (Surface Combatants)

MH60 Romeo Maritime helicopters

For more information, visit HN’s website.

Hellenic Army (HA)

Procurement program includes:

  • Hellenic National Vehicle Program
  • Hellenic Light Weapons
  • Unspecified antitank weapons

For more information, visit HA’s website.

Hellenic Coast Guard (HCG)

Procurement program includes:

  • Coast Guard Procurement of Mobile X-Ray Systems
  • HCG Vessels Tenders

For more information, visit HCG’s website.

Firms that make products that must be sold through government frameworks should connect with the U.S. Department of Defense in the United States for guidance on the process: U.S. Department of State . Firms wishing to compete in tenders need a local partner to navigate the bureaucracy and meet eligibility requirements.

Ministry of Climate Change & Civil Protection - Aerial Firefighting procurement

In September 2021, the Greek Prime Minister upgraded the Ministry of Climate Change and Civil Protection to a fully-fledged Ministry and appointed a new Minister. The Ministry was designated to combat all types of climate challenges, and secured funding to make several big-ticket purchases under its AEGIS Program. AEGIS has 1.76 billion Euro of funding focused on 4 pillars. While the Greek side would prefer to make procurements in this space under a government-to-government framework, the U.S. Government does not classify firefighting or climate change as a space that can utilize existing procurement frameworks. Therefore, all procurements in this space are done as direct commercial deals moderated by the Hellenic Republic Asset Development Fund (Taiped). Taiped is doing its best to ensure that tenders are conducted according to regulations while seeking to expedite processes. Nearly 2 years into the process, the first high profile tenders are expected to come out this fall. With the new government being sworn in, there is optimism that things will move forward.

U.S. firms offering disaster resilience solutions and technologies can compete in tenders. The program covers a range of solutions including ISR capabilities, aerial capabilities, and a command-and-control center. Please visit the Ministry of Climate website for more information.

For more information, please contact Defense Industry Specialist Athina Kladis at athina.kladis@trade.gov.

Resources

U.S. firms interested in better understanding the market visit the following industry associations:

Upcoming events:

Aerial Firefighting Europe which will take place on October 17-18, 2023, in Athens, Greece.

The next Athens Defense Show DEFEA will take place in May 2025, in Athens, Greece.