The defense industry is now urgently calling for the immediate enactment of the government’s commitment to ensure a 25% mandatory participation of the domestic defense industry in defense procurement programs, in light of the upcoming meeting of the Supreme Defense Council (KYSEA), which is set to approve the so-called “Shield of Achilles” program, with a total value of 3 billion euros.
Although July 6 is approaching—the date on which the government body is scheduled to meet to approve the procurement contracts for the so-called “iron dome”— and despite the announcement by the Prime Minister and Defense Minister Nikos Dendias that Greek defense companies would hold a 25% stake in the procurement programs, the measure has not yet been enacted into law.
This, in turn, means that foreign companies participating in Greek defense programs are not required to comply with it.
The issue was raised with urgency yesterday during the inauguration of M Technologies’ fourth facility in Volos by the head of Metlen, Evangelos Mytilineos, who spoke not only about the need for closer cooperation between the defense industry and the Armed Forces but also—in the presence of Mr. Dendias at the event—proposed additional incentives for bids that exceed this specific percentage.
“I would like to take this opportunity to propose to the current Minister of Defense that bids exceeding the 25% threshold receive extra points in the relevant evaluations. For the good of all, as I said earlier,” he noted, having previously described the government’s decision as a step in the right direction.
The issue has been raised many times by the Greek defense industry, yet the situation remains unclear, and the longer the decision remains unlegislated, the greater the delays in approving critical programs, such as the contracts for the air defense system being contested by Israeli companies.
All signs indicate that the main reason the contracts for the procurement of air defense systems have not yet been signed is the difficulty in securing the 25% participation rate for Greek companies, despite the government’s repeated commitments to this effect.
According to reports, one of the Greek companies set to participate in the project is M Technologies, in partnership with the Italian firm Iveco Defence.
For its part, the leadership of the Ministry of Defense maintains that in the new defense procurement programs, the participation of companies from the Greek defense industry will amount to one-quarter of the total budget, an issue on which Mr. Dendias also spoke yesterday from Volos, stating that he has issued a relevant directive to the General Directorate of Defense Procurement.
“I have issued an order to the General Directorate of Armaments—whose head, General Bouras, is present here—that 25% of every system not produced by a Greek company must involve investment in the country. “And when we say 25%—just to be clear—for high-tech products, we’re not just asking for subcontracting work, as was the case in the past at much lower percentages, of course,” the minister stated, acknowledging that this alone is not sufficient.
Highlighting the problem himself, he noted that “in new technologies, there are codes—so-called source codes and algorithms—and if you don’t have them, you can’t develop the product. And so you become hostage to a supplier, who either develops it or doesn’t, in order to force you to purchase the next version of the same product, paying the full amount from the start.”
The defense industry’s messages follow this same line of reasoning, such as yesterday’s statement by Ev. Mytilineos that the time has come for the armed forces and Greek industry to work much more closely together, citing the examples of the U.S. and Germany.
“The Armed Forces are right to demand, within the country’s budgetary constraints, that the Greek people’s money be invested in the most appropriate and efficient manner. And they would, of course, prefer Greek-made products. But without compromising the quality of these products. METLEN’s Defense Hub in the center of the country provides the Armed Forces with greater opportunities to procure Greek defense systems,” he said regarding the impact that such a partnership—centered on the Volos complex—would have.
Submarines for the Dutch Navy
At the vertically integrated complex, following yesterday’s inauguration, there are now four units, with the goal of reaching six, covering a total area of over 100,000 square meters and capable of simultaneously supporting multiple defense programs.
The total investment for all six units amounts to approximately 250 million euros, and once the Hub is fully developed, the current workforce of 500 employees is expected to grow to 1,000 (mechanical engineers, electrical engineers, welders, etc.), as noted by Vasilis Tsiamis, Chief Executive Director of M Technologies.
Internationally, M Technologies is exploring a number of partnerships, and according to reports, it recently signed an agreement with the French company Naval to undertake a project to supply submarines for the Dutch Navy.