Greece, according to figures released by the North Atlantic Treaty Organization (NATO), spent around 2.4% of its GDP on defence in 2015 and 2016, a 7.2% increase in defence spending over that of 2014 (or some an additional 0.2% of the GDP). Overall in terms of this measure, Greece ranks 2nd out of the 28 NATO members, behind only the US and being one of the few member states that achieves the NATO’s target of 2% of the GDP spending in military expenditure.

For several years, Greece was one of the predominant buyers of defence equipment worldwide, resulting in a sizable capital outflow from the country. Recognising this ascertainment, Greek governments have made significant efforts to develop a strong and viable domestic defence industry. The main objective behind this political decision, was to increase the degree of participation of domestic defence manufacturers, in national defence procurements. Additionally, a strong defence industry could provide a boost to domestic employment and provide added-value to the national economy, by gaining access to advantaged know-how and related technologies.

Under this notion, a significant number of small or medium-sized companies have emerged, the main activities of which range from supplying arms, ammunition and weapon systems, to heavy military vehicles (such as Armoured Personnel Carriers (APCs), fire-fighting vehicles and tank transporters), communications and electronics products (such as mobile portable and base transceivers, radio links, transducer systems, etc.) optical and electro-optical systems (such as night vision aiming sights, night vision observation sights and night vision goggles), to camouflage nets, inflatable military boats, Nuclear Biological and Chemical (NBC) masks and bulletproof vests.

Furthermore, several Greek defence companies are involved in shipbuilding, repairs and modifications of military and commercial ships, as well as Maintenance, Repair and Overhaul (MRO) of specific military and civil aircraft types.
Currently, there are several private entities in Greece that cooperate with the Ministry of Defence and compete for national, as well as international tenders, either as prime contractors, or subcontractors. Additionally, through the implementation of offset programs associated with major defence acquisitions, the Greek defence industry has managed to increase its business volume and capabilities, to participate in large co-production programs and to be integrated in the supply chain of large OEMs (Original Equipment Manufacturers).  

One such company is the Hellenic Aerospace Industry (HAI), which since 1999 has received more than US$300 Million in purchase orders as a fulfilment of Lockheed Martin’s offset obligations in the country. Through such programs, HAI has become a single source supplier of Lockheed Martin for the following F-16 components:

  • F-16 Engine Access Covers
  • F-16 NSI (Normal Shock Inlet) and MCID (Modular Common Inlet Duct) Air Inlets
  • F-16 Aft Fuselage
  • F-16 Forward Engine Access Doors, Fuel Closure Side Panels and F-16 Fuel Tank

Additionally, Lockheed Martin assigned subcontracting work to HAI for the manufacturing of Mid-Fuselage Panels and Forward (100”) and Aft (80”) Fuselage Plugs, which comprise some of the most critical assemblies of the C-130J. Finally, Lockheed Martin also assisted HAI in landing the Common Configuration Implementation Program (CCIP) modification work, for the USAFE (United States Air Force - Europe) F-16s stationed in Europe.

Another Greek company that has managed to be integrated in the supply chain of an OEM through offsets, is METKA. On the 26th of November 2013, METKA signed an industrial co-production agreement with Krauss-Maffei Wegmann (KMW). METKA will supply defined metal structures of the hull and turret for 62 LEOPARD 2 main battle tanks for the Middle East market. The value of the agreement will reach 56.5 Million Euro.

METKA and KMW also cooperated in the production of the LEOPARD 2HEL tanks for the Greek Army. This co-operation started in 2003. It was then that the two companies set the basis of their partnership that included extensive know how transfer and substantial investments on highly sophisticated machinery in METKA’s two factories in the Greek city of Volos. The METKA and KMW cooperation has aided towards the direction of preserving much needed jobs and supporting the transfer of skills and international best practices to Greek nationals, thus enhancing their technological level and improving their potential.

Additionally, it is worth mentioning that there are some Greek defence companies that have managed to develop and manufacture such highly innovative products that were actually adopted by the defence forces of foreign countries. One such company is Theon Sensors. Theon’s products are designed in-house by a team of experienced and qualified engineers, specializing in several related engineering disciplines, such as optical, mechanical, electronics and system design. Theon operates from Athens, but always had an export orientation, as apart from being the main supplier of night vision equipment to the Greek Army, has established an international network of customers and partners. Currently, Theon has more than 50,000 systems in service or under contract in 36 countries around the world, as well as offices in Abu Dhabi and Singapore. Theon Sensors is today one of the Market Leaders in Night Vision Systems for military and security applications.

Another company that has managed to develop its own advanced products, is European Sensor Systems (ESS). ESS commenced its operations in 2012 and is currently a global developer and manufacturer of high quality sensors, based on micro-electronics technologies (MEMS). ESS products are used in sophisticated control and monitoring applications in the industrial, medical, aerospace and consumer good markets, either as stand-alone components, or integrated within other applications/products.

Interoperability Systems International (ISI), is another Greek company that has recorded success in exporting its innovative products. For example, ISI in cooperation with the UTi Group has successfully implemented the integration of Romanian Air Force Legacy Surface-to-Air Missile (SAM) Systems with respective Air Defence Command Centres. The incorporation of such a capability was a requirement resulting from Romania’s NATO membership and the need to integrate its national assets into the greater NATO Air Defence Network.

ISI is also one of the companies that are going to ‘reactivate’ and upgrade Greece’s Lockheed Martin P-3 Orion maritime surveillance aircraft. The respective upgrade involves among other items, the procurement of software and hardware kits for the upgrade/modernization of the P-3 on-board systems. ISI’s Maritime Mission Integration and Managements System (M2IMS) will be integrated in the P-3 Orions, transforming these platforms into the most modern P-3 aircraft in the world. The other two companies participating in the upgrade of the Hellenic P-3s, are Lockheed Martin and HAI, handling however more structural related aspects.

Finally, a special reference should be made to INTRACOM Defense Electronics, a Greek company which participates in a series of international defence system development and production programs. INTRACOM has a significant international activity, as for example in 2014, 98% of its annual turnover was due to export sales in Cyprus, France, Germany, Luxemburg (NSPA - NATO Support and Procurement Agency), Sweden, the UK and the US.