The defense industry is changing course

OR Greek defense industry is entering a period of extensive transformation, as a new productive ecosystem is developing alongside traditional defense enterprises in which government agencies, large industrial groups, technology companies and start-ups. The European shift towards strengthening strategic autonomy, through of the ReArm Europe projectwhich aspires to mobilize up to 800 billion euros to strengthen the European Union’s defense capability, combined with the Greek government’s commitment to a 25% participation of domestic industry in the new equipment programscreates for the first time the conditions for the country to acquire a stronger production base in a sector where until now imports dominated. According to market estimates, this participation can be translated into projects with a total value of approximately 750 million euros for Greek companies.

The image of the defense industry is no longer limited to the manufacture of weapons systems. A wider technological ecosystem is being formed, in which public bodies, large private companies, specialized defense industries and start-ups developing artificial intelligence applications, autonomous systems, sensors, cyber security solutions, anti-drone technologies and unmanned vehicles coexist. In many cases these are dual-use technologies, which can be used in both military and civilian applications, significantly expanding the prospects of their commercial exploitation.

The contribution of state defense organizations remains decisive. Her case is typical Hellenic Aviation Industry (HLA)which developed the domestic Centaur drone countermeasures systemleveraging electronic warfare technologies to detect, intercept and neutralize enemy drones. The system was designed by Greek engineers of the ODA and was tested in real operational conditions in the Red Sea, in the context of the European operation “Shields”, where, according to the available information, it presented particularly positive results. This development strengthened the interest of foreign countries, while EAB is now proceeding with its systematic production at its facilities in Schimatari, confirming that the Greek industry can develop competitive high-tech systems with export potential.

Mobility, however, is not limited to state-owned industries. The increased dynamics for the sector also leads large Greek groups to strategic partnerships with leading international companies, strengthening the country’s production base. Its cooperation is moving in this direction GEK TERNA with the Rheinmetallwhich aims to support the Greek Armed Forces with new tactical ground systems, upgrade existing assets and provide comprehensive support throughout their life cycle. Germany’s Rheinmetall is at the center of the European defense restructuring, recording sales of 9.9 billion euros in 2025.

Indicative of the shift of Greek industry towards defense is its expansion Metlen’s M Technologies Hub in Volos. The complex, with a total investment of 240 million euros, already has four production units and is expected to expand to six. M Technologies, the defense and technology arm of the group, has evolved over the past 25 years from a manufacturer of metal structures for Leopard tanks to a strategic industrial partner of leading international defense groups. Today it manufactures critical subsystems for the Leopard tanks and the Patriot programwhile through its collaboration with Naval Group will also participate in the construction of submarines for the Dutch navy. The goal is for the defense hub to employ more than 1,000 workers by the end of 2027.

GEK TERNA’s collaboration with Rheinmetall aims to support the Greek Armed Forces with new tactical ground systems.

Meanwhile, a small but critical mass of startups has been developing defense innovations lately that travel from Greece to Malaysia, Japan and Korea.

Such is her case Velos Rotorswhich in recent years has been designing and assembling electric unmanned helicopters for dual use from its headquarters in Xylokastro. These carry everything from human organs for transplantation to lidar sensors to map an area or magnetometers to locate mines. They can even be used for military purposes. Within the next month, as reported by its co-founder, Aris Kolokythaswill also launch a new, more flexible model, which the company has been developing for a year, which is mainly intended for defensive use, such as for mapping and target recognition.

M Technologies manufactures subsystems for Leopard tanks, while through its partnership with Naval Group it will also participate in the construction of submarines.

Her team also brings innovations to the bottom Sotiria Technologywhich develops systems for underwater surveillance of critical infrastructure. The company took its first steps in November 2021 and traveled to Boston after being selected by NATO to participate in the program “Diana».

The closed “club” of companies that develop defense technologies also includes Delian Alliance Industriesa company founded by Greeks who worked in large technology companies, such as Apple, Palantir and Facebook. The Greek startup took its first steps by developing surveillance towers equipped with thermal cameras and radar, with the aim of being vigilant guards to detect threats.

In a high-tech industry, with production units in the UK and USA, where the heart of the defense industry beats, the start-up company is developing iCOMAT of Evangelou Zimbeloudis. The Greek DNA company can produce lighter and lower cost components for the defense, aeronautics and space industries.

Beyond the companies themselves, the institutions that link research, the innovation and the business needs of Armed Forces. In this context, the Hellenic Center for Defense Innovation (ELKAK) attempts to function as the connecting link between the Armed Forces, defense production and the Greek innovation ecosystem. With an annual budget exceeding 100 million euros, the Center promotes tenders and projects of strategic importance.

The participation of Greece in the American initiative also acquires a special dimension.Pax Silica‘, through which the United States seeks to form a network of partners in the critical areas of artificial intelligence and digital infrastructure. The initiative covers the entire value chain, from data centers to critical minerals and computing power, sectors that are now key pillars of the defense industry.

In this environment, Greece seeks to acquire a pivotal role. Traditional European data center markets such as Frankfurt, Paris and Dublin are showing signs of saturation, turning investor interest to new destinations. With installed capacity in Europe expected to grow from around 18 GW today to almost 60 GW, significant prospects are emerging for South East Europe, where Greece is vying for a share of new investment.

At the same time, the country has a growing semiconductor ecosystem, with more than 80 companies active in the sector and about 35 of them occupying a specialized position in the value chain. This network is valued at approximately 500 million euros and employs more than 3,000 highly skilled workers, constituting an important basis for the further development of advanced technologies with applications in both the economy and defense.