- There was a wave of resignations from the crew of the new frigate Kimon.
- After spending millions on the POSEIDON submarine, they ordered it decommissioned.
- Defense industry: Production lines for ammunition were shut down by orders from above.
By Paris Karvounopoulos
Data Journalists expose the farcical aspects of the “rearmament of the Armed Forces,” which are having dramatic consequences for the state-owned defense industry and costing us dearly as both taxpayers and a military.
Meanwhile, new evidence has come to light about the deliberate degradation of the defense industry, while a “macabre bonanza” is unfolding across Europe’s defense sector as a result of the war in Ukraine.
Together, these developments paint a stark and unmistakable picture of the true state of what the government calls the country’s “rearmament.”
The first Belharra frigate is arriving — Τhe crew is leaving
Although Greece has faced repeated setbacks in arms procurement in the past, it seems the country has learned little and continues down the same path: making weapons program decisions on the fly, in a piecemeal fashion, and without a coherent plan. This is exactly how the current government’s so-called “rearmament” program began, and continues today.
In 2020, the Prime Minister informed the French President that Greece lacked the financial capacity to purchase French frigates. In an effort to placate Macron, the decision was made to purchase Rafale fighter jets. The choice itself was sound, but the purchase was carried out without any provision for the participation of the Greek defense industry or their long-term technical support.
A few months later, when the strategic agreement between the United States, the United Kingdom, and Australia emerged and the French submarine deal with Australia collapsed, the United States gave the green light for France to sell frigates to Greece. Greece then purchased the FDI frigates, the first of which is scheduled to arrive on January 15.
However, several serious issues have arisen that do not directly concern the weapons systems the Hellenic Navy requested and recommended for purchase but which the government failed to include in the deal.
These issues are linked to a wave of resignations; at least thirteen members of the initial crew of frigate KIMON have expressed their intention to leave the Hellenic Navy as soon as the ship docks in Greece.
A multi-million-euro overhaul for a decommissioned submarine
The absurdities of arms procurement extend beyond the purchase of new weapons systems. There are also cases involving existing assets that raise legitimate journalistic questions. The most recent and telling example is the submarine Poseidon. It is one of the Hellenic Navy’s older submarines. For the past year and a half, it has been stationed in Crete undergoing a comprehensive overhaul. The refit cost dearly in terms of both time and money. Then, unexpectedly and without warning, the crew preparing to return the vessel to the fleet were informed that Poseidon was being decommissioned. The obvious question follows: Why was it repaired at all?
The matter is being characterized as a scandal because of the cost of the repairs and the fact that no formal procedure was followed for the submarine’s decommissioning.
According to Presidential Decree 210/1993 (Government Gazette A’ 89 of March 30, 2003) — also known as the Hellenic Navy Regulations — specifically Article 1158 concerning warships placed in decommissioning status, the decision to decommission a vessel is made by the Supreme Naval Council and approved by the Minister of National Defense. Vessels slated for decommissioning are then handed over to the naval base designated by the Hellenic Navy General Staff.
The decree further stipulates that a Standing Order of the Hellenic Navy General Staff shall regulate the details of this procedure. Accordingly, Standing Order PaD 6-32/2006 defines the procedure for decommissioning ships, floating assets, and aircraft.
In the case of the submarine POSEIDON, several legitimate questions arise:
- Why was the submarine decommissioned after only 18 months of repairs at the Crete Naval Base?
- Why were manpower, equipment, and substantial financial resources, which are scarce for the Hellenic Navy, expended only for the submarine to be decommissioned after so many months?
- If the submarine was going to be decommissioned, why was it ordered to sail to the Salamis Naval Base as if it were seaworthy?
- Was the submarine ultimately decommissioned to be transferred, like other Greek military equipment, to a foreign country?
The absurdities of the defense industry
Inexplicable developments in national defense are reflected even more starkly in the defense industry, particularly the state-owned sector. Recent events at Hellenic Defense Systems (EAS) have not only raised questions but also provoked outrage. Some argue that these matters should concern the prosecutorial authorities as well, as a series of loss-making actions and deliberate omissions have directly impacted the public purse. Between 2020 and 2025, EAS received €170 million in state funding. A portion of this funding, approximately 25%, was channeled to various companies for staff leasing, preparing studies, outsourcing arrangements, high-cost contracted services, and similar expenditures.
Hellenic Defense Systems (EAS) was in poor condition in early 2019. The company was characterized by accumulated losses, structurally deficit operations, and delays in meeting contractual obligations. These problems predated nationalization and resulted from divestment and an operating model imposed by the state. Notably, PYRKAL and EBO accepted prices below cost in their contracts with the Ministry of National Defense to stay within the General Staffs’ budgetary limits. The resulting deficit was covered by the two companies through state-guaranteed bank borrowing. The 2004 merger was supposedly intended to address these underlying issues. However, none of the business plan’s proposed actions were implemented, and the Ministry of National Defense did not honor its commitments for a package of new procurement orders. The same occurred with the 2013–2014 restructuring plan. After 2019, government policy used EAS as a mechanism for servicing political and party obligations with public funds. This was carried out through commissioning studies and consulting services, outsourcing contracts, legal support services, and providing labor through contractors. The April 2021 announcement of Lentakis Park’s creation served the same purpose: using EAS to advance the business interests of large construction and engineering groups. Despite favorable conditions in the international market, an increase in the Ministry of National Defense’s budget, and the European Union’s decision to procure one million rounds of ammunition, the government’s approach to EAS remained unchanged after 2022.
Government order to shut down ammunition production
In April 2021, the Prime Minister announced the Lentakis Plan, which aimed to have Hellenic Defense Systems (EAS) vacate the factory by the end of 2022. In July 2022, the Ministry of Finance sent a letter to EAS requesting that certain ammunition production lines at the Hymettus facility remain closed despite strong demand and rising prices. These production lines had previously been inspected by Commissioner Breton ahead of the European Union’s decision to purchase one million 155mm rounds of ammunition. The consequences were devastating. EAS lost the opportunity to participate in the program for one million rounds, was forced to cancel three export contracts, and lost €350 million in new procurement orders from the Ministry of National Defense. It later emerged that EAS had been coordinating with Czech partners on establishing a joint venture, and the closure of the production lines served the plans of foreign interests. These developments effectively extinguished the interest of other foreign companies in cooperating with EAS, eliminating a competitive process that could have benefited the Greek company.
At a time of heightened demand for artillery shell fillings, the decision to grant a 25-year concession of the production lines to a new company, one in which a shareholder with just a 49% stake exercises absolute control over management and operations, cannot be assessed as beneficial. Under this arrangement, the Greek side enables the Czech group to increase its profits through higher production volumes and sales of artillery shells under controlled cost and profit margins. This is because the new company will exclusively purchase from and sell to the Czech group. In contrast, Hellenic Defense Systems (EAS) can only hope to receive profit distributions if and when the new company generates profits, and even then, only under conditions of controlled selling prices and production costs.
The official figures
Hellenic Defense Systems’ (EAS) published financial statements for fiscal years 2020–2024 reveal a systematic collapse in revenues and serious managerial misdirection. Turnover for fiscal year 2019 was €30.5 million, roughly equivalent to an average year for EBO or PYRKAL. However, the average turnover for the period 2020–2024 was only €10.5 million, a 65% decrease from 2019. Over the same period, average administrative expenses reached €16.7 million, meaning management costs were approximately 60% higher than revenues. During the 2020–2024 periods, EAS management handled €170,000,000 in cash funding provided by the public treasury.
