In a historic shift in military strategy, Greece is set to invest €25 billion over the next 12 years as part of what Prime Minister Kyriakos Mitsotakis has termed the "most drastic transformation in the history of the country’s armed forces." This announcement was made during a parliamentary session on April 2, 2025.

The new defense strategy hinges on two primary pillars: the integration of advanced defense technologies and the significant involvement of the Greek defense industry in military procurement programs.

Mitsotakis emphasized the changing nature of warfare, stating, "The world is changing at an unpredictable pace," and highlighted the need for Greece to adapt its military capabilities in response to regional dynamics, particularly regarding its longstanding rivalry with Turkey.

The announcement occurs in the context of increasing pressure from U.S. President Donald Trump for NATO members, including Greece, to enhance defense spending.

Currently, Greece allocates over 3% of its GDP to its military budget, which is substantially higher than the EU average.

Mitsotakis criticized previous European defense policies as "geopolitically naive," asserting that Europe had shifted its defense responsibilities to the United States after the Cold War, neglecting its own commitments to NATO.

As part of the modernization efforts, Greece's arms procurement strategy, projected to extend until 2036, will emphasize cybersecurity and include various advanced technologies such as unmanned ground and aerial vehicles, loitering munitions, drones, and a new communications satellite.

A key component of this initiative is the "Achilles' Shield," a proposed defensive system designed to protect against missile, aircraft, and drone threats.

Mitsotakis has also highlighted the necessity of integrating the Greek arms industry into future programs, stating this involvement is "a non-negotiable condition for any major defense investment." In support of increased military spending, the European Commission announced it would invoke the EU's national escape clause, allowing military expenditures to be excluded from assessments of compliance with EU fiscal rules.

While the Prime Minister acknowledged the flexibility provided by the European Commission, he cautioned that this should not lead to unsustainable fiscal practices, stressing the importance of maintaining market confidence in Greece's economic management.

Greece's government has expressed backing for European Commission President Ursula von der Leyen's defense initiatives and is not currently part of other Southern European countries focusing on military funding primarily through grants rather than loans.

Mitsotakis has called for discussions within the EU regarding the establishment of a dedicated fund for projects of common defense interest, such as a European anti-missile shield, but noted that concrete steps towards this goal are still forthcoming.

In a complementary move, the Greek government recently announced its first pay raise for armed forces personnel in 14 years to attract younger recruits.

However, this decision has sparked controversy within the ruling New Democracy party, with some lawmakers seeking broader pay increases for other uniformed personnel.

Mitsotakis indicated that additional salary adjustments would be announced in September, while also urging caution against excessive fiscal commitments, citing the importance of economic performance for national security.