**Cyprus Allocates €1.28 Billion for Defence Enhancement Over Three Years**
Cyprus has unveiled plans to invest over €1.28 billion in defence enhancements over the next three years, marking a significant increase in military spending as the island nation embarks on a path of military modernization. The state budget for 2027, recently submitted to parliament, allocates €430.15 million specifically for defence expenditure, a substantial rise from the €176.8 million earmarked for 2026.
The budgetary provisions for defence are part of a broader Medium-Term Fiscal Framework, which outlines an additional €425.15 million for both 2028 and 2029. This strategic financial commitment underscores Cyprus's intent to bolster its military capabilities while also tapping into European Union (EU) defence funding mechanisms.
The increased funding comes as Cyprus begins to implement its investment plan under the EU’s €150 billion Security Action for Europe (Safe) initiative. Cyprus has been allocated nearly €1.2 billion through this programme, with the first tranche of €177.2 million received in June, representing 15% of the total allocation. The European Commission has indicated that these funds will facilitate key defence investments, enhance resilience, and upgrade military capabilities in line with shared European objectives.
European Defence Commissioner Andrius Kubilius emphasized the significance of this financial support, stating that it demonstrates Europe's commitment to collective security and defence. He noted that the funding would enable Cyprus to expedite investments in necessary military capabilities.
A spokesperson for the European Commission elaborated on the objectives of the Safe initiative, highlighting its aim to enable member states to jointly procure essential military capabilities, including ammunition, missiles, air defence systems, and ground combat systems. This approach is designed to ensure interoperability among EU member states, reduce costs, and strengthen the European defence industrial base.
The defence budget for Cyprus is set to rise from €628.04 million in 2026 to €894.68 million in 2027, reflecting an increase of approximately €266.6 million, or 42%. Within the 2027 budget, €203.13 million is designated for the Cyprus Army, while €247.82 million is allocated to the National Guard. The specific defence expenditure of €430.15 million represents an increase of €253.35 million compared to the current year.
This budgetary increase coincides with the National Guard's need for additional personnel, which Defence Minister Vasilis Palmas addressed during a recent swearing-in ceremony for newly recruited contract soldiers. He noted that these staffing requirements are partly driven by programmes initiated under the Safe initiative. Palmas has previously stated that the European funding will enable the National Guard to acquire military equipment that aligns with its strategic priorities through to 2030.
In a recent interview, Palmas highlighted key areas of focus for the upcoming military enhancements, including the acquisition of drones and counter-drone systems, improved surveillance capabilities, the protection of critical infrastructure, and the strengthening of air defence systems.
While the budget outlines significant funding for defence, it does not provide a detailed breakdown of the specific weapons systems or procurement programmes that will be financed by the €430.15 million allocation. Under current budget law, expenditures from the defence strengthening category require prior approval from parliament, following recommendations from the House defence committee after appropriate briefings.
The projections indicate that the increase in defence spending is not a one-time event; the budget for defence strengthening is expected to remain at €425.15 million for both 2028 and 2029. The overall budget for the Defence Ministry is projected to reach €901.15 million in 2028 and €915.23 million in 2029.
This strategic pivot towards increased defence spending was signaled by the government earlier this month when the cabinet approved the budget. Finance Minister Makis Keravnos emphasized the importance of prioritizing defence expenditure in both the 2027 budget and the subsequent fiscal framework for 2027-2029.
As Cyprus moves forward with these ambitious plans, the focus on military modernization and enhanced capabilities reflects broader regional security concerns and the island's commitment to aligning its defence strategies with European standards and objectives.