Israeli defense exports to Europe are breaking records, but the latest deal with Greece, worth €3.5 billion, also has a strategic dimension. While the "Arrow 3" deal with Germany was seen primarily as a response to the war in Ukraine, the latest procurement by Greece carries reflects the development of a regional alliance against Turkey.
Greece will procure a multi-layered air defense system from Israel for around €3.5 billion which will be integrated into its Achilles Shield defend system. The procurement will include Rafael’s David’s Sling in the upper layer, Israel Aerospace Industries’ Barak MX in the middle layer, and Rafael’s Spyder system in the lower layer. Turkey, under President Recep Tayyip Erdogan, threatens Greece no less than it does Israel, creating a triangular alliance that is also tightening with Cyprus.
Greece's challenge and the need for deterrence
Turkey and Greece might be NATO allies, but they have chronic tensions over the boundaries of their economic waters in the eastern Mediterranean and the Aegean Sea. Since 1995, the Turkish maritime law has been casting a cloud over relations, according to which if Greece expands its economic waters in the Aegean Sea beyond six nautical miles, Ankara will see the move as a pretext for war. This year, the trend intensified with Turkey's promotion of the "Blue Homeland" law, under which Ankara aims to more nautical miles at the expense of Greece’s economic water.
According to spokespeople for the Erdogan regime, the law was supposed to have already been enacted but has stalled for now. A senior Greek official tells "Globes" that the assessment in Athens is that the Turkish government has not abandoned the idea but has postponed it until after the US midterm elections. "This is a worrying step," the official admits.
Turkish policy also indirectly harms Israel. About a year ago, the Greeks decided to ignore Ankara's threats and declared a closed maritime zone off the islands of Kasos and Karpathos to begin laying a cable to connect the Israeli electricity grid to Europe. An Italian ship has already arrived at the deployment site but has not begun working, because the Turks have threatened to cut the cables and Greece has chosen to avoid a unilateral move for fear of a direct military confrontation.
Now, the Turks have declared a closed maritime zone for seismic research being conducted north of Cyprus between July 20 and August 30. The goal: to lay a natural gas pipeline between Turkey and the Turkish Republic of Northern Cyprus (KKTC), a puppet entity whose independence only Ankara recognizes. The move illustrates how close Turkish buildup and displays of power are getting to Israel.
"Turkey is eight times bigger than us," Greek Prime Minister Kyriakos Mitsotakis said in an interview with local media after Greece’s National Security Council approved the deal. "We are ready to discuss a realistic solution to issues such as the exclusive economic zone, but I will never be ready to conduct diplomacy from a position of weakness. I want Greece to always maintain a strong warning capability."
The path to that deterrence lies in a multi-layered air defense system that will come from Israel, and according to the plan, will be fully deployed in just 35 months. The project is being accelerated because of Greece’s threat perception, which fears a Turkish opening strike with multiple missiles and rockets in an attempt to conquer islands in the Aegean Sea. The Greek ambition is that the Israeli multi-layered system will allow for minimizing vulnerabilities and give breathing space for the deployment of forces from Greece to the islands.
David's Sling will be party of a national system and is therefore expected to be located on mainland Greece. Barak MX will also be deployed throughout mainland Greece and possibly even on the main islands, and Spyder's versatility will be utilized to deploy batteries on the Aegean islands as far as Crete.
David's Sling system has a range of up to 300 kilometers, and is relevant for intercepting cruise missiles, aircraft and drones. The Barak MX system supports various radars and launchers for coverage against fighter jets, helicopters, drones, cruise missiles, surface-to-air missiles and surface-to-surface missiles. The Spyder system, which was recently sold to Romania in a €2 billion deal, provides air defense solutions at different ranges and against a variety of threats, including UAVs, aircraft, helicopters and short-range ballistic missiles.
Israel will transfer knowledge and capabilities, including source code
Greek magazine "HellasJournal" reports that a crucial detail in the creation of Achilles Shield is the command and control system, including the provision of source code for Greek independence. According to the same report, the unified air defense network will be managed from this system, in which, alongside the Israeli systems, US-made systems already in Greece will be integrated, such as the Patriot and Hawk. The magazine also reported that Greek production of interceptors for the Israeli systems is possible.
From here, Israel and Greece will soon work out details for the operational side of the agreement, which includes at least 25% local production. The issue of local production has become a major issue worldwide in recent years, due to the realization that many years of neglect of defense budgets has also led to a substantial gap in technological knowledge and industrial capabilities.
Greece, for example, is consistently increasing its defense budget. After standing at about $7.4 billion in 2023 (about 2.9% of GDP), this year it is estimated at about $8.6 billion (about 3.5% of GDP). The Achilles Shield program is just one pillar of a $28 billion defense investment plan to upgrade Greek military capabilities by 2036.
To meet Greek requirements for the transfer of capabilities and knowledge, optimal coordination will be required between the Ministry of Defense, IAI, and Rafael. The success of the transfer of knowledge to Greece is strategic for the Ministry of Defense in two aspects: business and securing supply chains.
While Ministry of Defense director general Maj. Gen. (Res.) Amir Baram is managing negotiations to extend the US aid agreement beyond 2028 and transform it into a long-term cooperation framework, he is also working to diversify sources of production and supply, especially of critical components.
Thus, knowledge and production transfers guarantee steady income for the defense industries, and when the need arises, Israel will be able to regulate supplies from factories in other countries, without them being threatened. For example, the ministry's activities with India - the main customer of the defense industries - which also has a close relationship with Iran, making it unlikely to be attacked.
Published by Globes, Israel business news - en.globes.co.il - on July 26, 2026.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.