At the meeting of the Government Council for Foreign Affairs and Defense (KYSEA) on 23 March 2026, a decision was taken whose significance will become clear in the coming period. For the first time, the provision was activated that every contract for the purchase of weapons systems by Greece must, as part of the agreement, allocate 25% of the work to domestic production by Greek defense companies. At the same time, Greece is requesting that follow-on support be carried out domestically rather than abroad.
The decision to integrate companies from the Greek defense ecosystem into the production line of the weapons systems the country purchases is not new. It has been under consideration for at least a year, forming part of a central plan led by the Ministry of National Defense, with the SAFE framework and ReArm EU (worth a combined €800 billion) serving as its starting point.
Implementation in Practice
Since 2022, and through a letter from Naval Group (Belharra frigates), Thales (electronic systems), and MBDA (weapons) to the Minister of National Defense, the three companies committed to assigning 15% of work to Greek firms. For the fourth frigate, the contract officially includes a clause stipulating 25% work for Greek defense industries.
In fact, within the coming days, according to To Vima, a meeting will take place at the Ministry of National Defense to ensure that the measurable targets set for the fourth frigate remain within timelines and within the agreed framework. A year ago, Defense Minister Nikos Dendias instructed the General Directorate for Defense Investments and Armaments (GDDIA) to accelerate the process.
The head of GDDIA, Lieutenant General Ioannis Bouras, speaking at an event of the Hellenic Manufacturers of Defense Materiel Associatoin (SEKPY), stressed that “GDDIA has already established a special contract monitoring team, aiming to ensure the implementation of this provision both in the main agreements and in follow-on support and upgrade program.” He added that the provision is also reflected in ongoing negotiations.
For his part, Tasos Rozolis, president of SEKPY, believes that “the critical issue is not only the percentage, but its effective implementation. A clear institutional framework is required, transparency in calculating domestic added value, and control mechanisms ensuring that Greek industry participation is real and not merely formal.”
In this area, the country—according to military sources—is covered, even though there is still no legislation explicitly defining a minimum domestic production percentage as a contractual requirement. The same sources explain that the absence of a formal legal framework does not prevent agreements from being reached, as shown in the case of the fourth Belharra frigate. They were categorical that Greece demands the 25% share in every negotiation, and that this is then included in the contract.
But how can a country with a significant presence in defense procurement markets, yet a relatively limited domestic industrial base, achieve this?
The Hellenic Centre for Defense Innovation (HCDI) could play a role. Its CEO, Pantelis Tzortzakis, noted that in 2025 “more than 400 Greek companies expressed interest in shaping the next day of the country’s defence sector.”
Minister Dendias has long formally requested the participation of Greek entities—including academic institutions and companies—through GDDIA, with the parallel goal of strengthening the domestic defense industry.
HCDI enters the equation as a catalyst encouraging Greek companies to develop and export their own systems, with the Greek state retaining intellectual property (IP) rights and generating long-term profit through sales. A few days ago, it published its 2026 “Project Agenda”: proposed projects under evaluation include technologies such as loitering munitions (NATO Class I) for tactical land operations support, unmanned underwater vehicles (UUVs) for ISR and I&W missions, interceptor drones for countering hostile UAVs, and others.
So we return to the central question: how can Greek defense companies—large and small—benefit from this decision? And will the benefit be significant?
Only last summer, the Defense Minister told Parliament that “the domestic defense industry contributes just 0.6% to GDP, while we spend over 3% on defense.” Earlier, speaking at the DEFEA 2025 Defense and Security Exhibition, he clarified that there are areas where Greek industry could reach even 100% participation, not just 25%, while in other program the percentage will be lower. “But on average, this is our target: 25%,” he stressed.
Negotiations are currently underway between GDDIA and Israeli companies that will participate in the “Achilles Shield” program, a €3 billion project. According to reliable information, the share of domestic company participation could exceed 30%. This would mean revenues of €900 million for Greek firms, as well as technology transfer.
Production Lines
“What is crucial for the country is not to remain stagnant,” observes ONEX president and CEO Panos Xenokostas. “The real goal,” he adds, “must be the gradual transition to a much higher percentage of domestic industrial participation and added value, with production lines for Greece and the wider region.”
Similarly, the executive director of Hellenic Aerospace Industry (HAI), Alexandros Diakopoulos, notes that “through such collaborations, conditions are created for technology transfer and the development of new capabilities. The full operational utilization of the ‘Centaurus’ system, in ongoing operations, is a living example that HAI—and by extension the domestic defense industry—not only wants but can play a leading role whenever conditions require it.”
A complementary but crucial factor in this new policy is ensuring that upgrades and repairs are carried out in Greece. In any case, the stake of domestic industrial participation is of enormous importance for the country. In the Hellenic Unified Long-Term Defense Procurement Program (2025–2037), projected expenditures reach €25–28 billion. If the 25% participation requirement is implemented, this could translate into €6–8 billion in revenues for Greek defense companies over the next 12 years.
It is there that it will become clear whether Greece can join the group of players with a meaningful role in shaping the European defense architecture.
