(Al Jazeera Media Network) Greece on Wednesday became the first European Union member to take advantage of relaxed spending rules for defence, announcing a $27-billion, multi-year rearmament program.
The centrepiece of the program is a multi-layered defence system called the Shield of Achilles, which Prime Minister Kyriakos Mitsotakis told parliament was “essentially a dome combining existing air defences with new systems, offering protection on five levels – anti-missile, anti-ballistic, anti-aircraft, anti-ship, anti-submarine and anti-drone”.
It was Greece’s first multi-year, comprehensive rearmament, and was part of a broader overhaul of the armed forces called Agenda 2030.
Mitsotakis described the shift as the “most drastic transformation in the history of the country’s armed forces.”
As the world is changing at an “unpredictable pace”, he said, “we are now facing a different kind of war than we were used to – at least the kind our armed forces were prepared for.”
Greece is a consistent high defence spender due to its adversarial relationship with Turkiye, and is this year set to spend 3% of its gross domestic product (GDP) on defence.
That is significantly above the European average of 1.9 percent, as estimated by the Stockholm International Peace Research Institute.
Amid a Russian war in Europe and contentious United States fidelity to NATO, the EU last month decided to raise up to $705 billion in off-the-books defence spending.
Europe’s total defence spending in 2023 was $569 billion.
The EU also offered member states $163 billion in low-interest loans to strengthen European defence industries.
“The Greek government believes that at some point Europe needs to create a fund focused on shared [defence] benefits such as a European anti-missile shield that will cover all European countries and can be funded by European grants to member states, not loans. But we are not there yet,” Mitsotakis said.
Mitsotakis’s reasoning was that Brussels could raise money more cheaply than most individual member states, so underwriting collective debt was more cost-effective than borrowing individually.
The EU issued its first mutualised debt during the COVID-19 pandemic in 2020, creating an $805-billion stimulus fund.
Its $165-billion rearmament fund, called Security Action for Europe (SAFE), consists of money left over in that fund.