**Cyprus and France Strengthen Defence Cooperation Valued at €800 Million**
Cyprus is poised to enhance its defence industrial collaboration with France through a series of agreements valued at approximately €800 million. This initiative falls under the European Union's Security Action for Europe (SAFE) funding mechanism, which aims to bolster the defence capabilities of EU member states.
The SAFE framework allows the Cypriot government access to a total borrowing capacity of up to €1.181 billion for the period from 2026 to 2030. Reports indicate that around two-thirds of this allocation, or roughly €800 million, will be directed towards joint defence programmes with France. This partnership is further solidified by the recent signing of a Status of Forces Agreement (SOFA) between the two nations, which establishes a structured approach for military collaboration, including joint exercises and the potential hosting of French military forces on Cypriot soil.
Cyprus' Defence Minister, Vassilis Palmas, highlighted the ongoing expansion of bilateral cooperation with France across both political and military domains. Prior to his visit to Paris for a defence industry exhibition, he remarked on the "timelessly excellent cooperation" between the two countries. Palmas emphasized the significance of the SAFE framework in providing substantial opportunities for industrial collaboration.
A key focus of this cooperation is to ensure the participation of the local Cypriot defence industry in these joint production initiatives. Palmas noted, "What we have emphasised, because we want to give a boost to the Cypriot defence industry, is that the countries with which we collaborate for the production of various armament programmes should find collaborators and partners who come from the Cypriot defence industry." This approach aims to foster local industry involvement in various areas of defence production.
The planned co-production areas include a wide range of military technologies and systems. These encompass ammunition production, such as artillery shells, unmanned aerial systems including loitering munitions, armoured vehicles, radar systems for air and coastal defence, electronic warfare systems, and mine clearance technologies. Additionally, there are reports of potential participation in next-generation drone systems developed in collaboration with Greece.
The SAFE funding mechanism is designed to enhance European defence capabilities through EU-level borrowing on financial markets, allowing member states to access funds at comparatively low interest rates due to the EU's strong credit rating. The repayment terms can extend up to 45 years, with the initial phase focusing on interest payments before capital repayments commence. This financial structure aims not only to strengthen military capabilities but also to support technological advancements and industrial cooperation within Cyprus and across the broader European defence sector.
As an EU member state, Cyprus is eligible to participate in the SAFE programme, although third-country involvement in related supply chains is subject to regulatory controls in accordance with EU legislation governing defence procurement and foreign investment screening.
The deepening of Cyprus-France defence cooperation reflects a strategic move to enhance regional security and military readiness, while also fostering local industry growth within the Cypriot defence sector.