Efforts to develop a defense industry began in Greece in the mid-1970s, although several isolated industries existed long before that date. In the mid-1990s, the defense industry supplied a wide variety of equipment to the Hellenic Armed Forces, and it has had moderate success in exporting military equipment to other countries.

Development of the Industry

The objectives of the initial policy were to satisfy national military needs and to increase the participation of domestic manufacturers, reducing Greece's heavy dependency on foreign military suppliers. Beginning in the 1970s, Greece was able to establish the technological base for producing military vehicles, aircraft components, guns, and ships. By the early 1980s, a substantial base of regional sales outside Greece had developed. However, significant economic problems have arisen because of the small domestic market, which seriously affects the viability of production lines, and because of management mistakes. The latter difficulty has included delayed response to technological developments and the changing needs of the armed forces and the rather inefficient use of offset agreements (by which Greek plants supply components to foreign military manufacturers in return for aircraft and equipment). Military aid programs, defense and economic cooperation agreements (DECAs) with the United States, and memoranda of understanding with partners in Western Europe have not been used effectively.

As a result, some state-owned defense industries are in a precarious financial position that may necessitate privatization to ensure profitable operation. Furthermore, defense planners now generally agree that the only way for the Greek defense industry to survive is through the coproduction of equipment with defense enterprises of other countries. In 1994 the industry, which employed 22,000 persons, had an annual turnover of about US$250 million.

The Defense Industry Directorate (DID) is the advisory body of the Ministry of National Defense for formulating and implementing national policy toward enterprises engaged in defense manufacturing. The DID constitutes the connecting link between the armed forces and the defense industries; its general purpose is to foster an increase in the domestic production of military equipment. The responsibilities of the DID also include management of specific new projects in the defense industry and the modernization and expansion of already existing industries that are either wholly or partially state-owned, as well as the codification and standardization of the armed forces matériel.

Data as of December 1994

NOTE: The information regarding Greece on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of Greece The Greek Defense Industry information contained here. All suggestions for corrections of any errors about Greece The Greek Defense Industry should be addressed to the Library of Congress and the CIA.