Greece is preparing a special support regime for the defense industry for 150 million euros. Companies will be able receive up to 75% subsidies, tax breaks and accelerated licensing.
The Greek government is preparing a separate regime to support the defense industry as part of the new Development Law. Its launch is scheduled for July 15, and the total volume of the program will be 150 million euros. The authorities promise up to 75% investment support, tax super-deduction of expenses and accelerated licensing procedures.
This is the first special program focused exclusively on the defense sector. Formally, its task sounds almost perfect: to attract new investments, develop technologies with high added value and increase the participation of Greek companies in European and international production chains. Translated from the language of ministerial presentations: the state wants Greece not only to buy expensive weapons systems abroad, but also to earn at least partially from their production at home.
Up to 75% support
According to the published parameters, the intensity of support will depend on the size of the enterprise and the region of the project. The maximum it can reach:
- up to 60% for large companies;
- up to 70% for medium-sized enterprises;
- up to 75% for small companies.
The maximum amount of support for one investment project is set at 20 million euros. For related or collaborating companies, the ceiling can reach €50 million.
It is important not to confuse the general regime with a simple distribution of money. Much of the stimulus will be based not on direct subsidies, but on tax mechanisms. The central instrument is declared tax super-deduction of eligible expenses with an increase of 100%. That is, expenses recognized as meeting the conditions of the program can be taken into account in the tax base in double volume. The state, as often happens, prefers to help through future taxes rather than through money here and now. The budget, you know, loves drama, but it doesn’t like to part with cash.
What exactly do they want to support?
The program is focused on dual-use projects, or dual-use. These are technologies and products that can be used for both military and civilian purposes. The list of directions includes:
- production of weapons and ammunition;
- production of motor vehicles and components;
- aviation and shipbuilding industry;
- production of military combat vehicles;
- technology projects related to defense, security, automation and dual-use industrial chains.
An accelerated licensing procedure is also provided for companies. In addition, the use of the approved tax benefit can begin not only after the complete completion of the project, but after confirmation of the implementation of approximately 50–65% of the investment plan. This should reduce the burden on businesses, which have to invest heavily first and then wait for the return.
Why is this important now?
Development Minister Takis Theodorikakos presented the initiative during the opening of Metlen’s fourth industrial plant in Volos. The event was also attended by the Minister of National Defense Nikos Dendias. According to Theodorikakos, the new measure should strengthen Greece’s domestic production base, export potential and role in the European defense industry.
Volos is gradually being transformed into one of the country’s military-industrial centers. The new M Technologies site is part of Metlen’s wider industrial cluster, which produces metal structures and components for defense programmes. The investment is estimated at approximately 45 million euros, and the government expects that such projects will create jobs and retain qualified specialists in the regions.
The official logic is simple: Europe is sharply increasing defense spending, and the European Union is increasingly talking about strategic autonomy and the need to develop its own production. For Greece, this is an opportunity to carve out a niche in the segments of armored vehicles, metal structures, ammunition, shipbuilding, aircraft components, electronics and dual-use technologies.
Not only the arms market, but also the technology market
A strong defense industry is not limited to producing shells and armored vehicles. Such chains include metallurgy, precision engineering, electronics, software, unmanned systems, communications, materials, logistics and repair facilities. That is why the government is focusing on dual-use: some of the technologies can then be used in civil industry, energy, maritime transport, robotics and the production of complex equipment.
But here an inevitable question arises. Incentives of up to 75% require strict control: who receives assistance, what kind of capacity is created, how many jobs are created, what is the export effect and whether the program turns into another way to compensate private expenses from the budget. Defense has long been a big money market, and where there is a lot of money and urgency, transparency is usually the first to disappear.
The program is currently in preparation for publication. The final terms, list of eligible expenses, requirements for companies and application procedure are to be set out in the regime’s official declaration, which the government plans to publish on July 15.
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