Greece on Tuesday said it will take delivery of 18 French-made Rafale fighter jets next year, as part of a major 11.5 billion-euro ($14.5 billion) drive to modernize its armed forces amid tension with neighbor Turkey.
Prime Minister Kyriakos Mitsotakis said the agreements would be finalized with the French government and defense contractor Dassault Aviation in the coming days, announcing the news in parliament ahead of a vote on the 2021 budget.
Annual spending on defense is being hiked by more than a third in 2021 to 5.4 billion euros despite a deep recession triggered by the pandemic this year.
Greece and fellow NATO member Turkey remain at odds over boundaries and undersea natural gas rights in the Eastern Mediterranean, a dispute that intensified this year and raised concerns among Western allies of a potential military confrontation.
Turkey, which has the longest continental coastline in the Eastern Mediterranean, has rejected maritime boundary claims by Greece and the Greek Cypriot administration and stressed that these excessive claims violate the sovereign rights of both Turkey and the Turkish Cypriots.
Ankara has sent several drillships in recent months to explore for energy resources in the Eastern Mediterranean, asserting its own rights in the region, as well as those of the Turkish Republic of Northern Cyprus (TRNC).
Turkish leaders have repeatedly stressed that Ankara is in favor of resolving all outstanding problems in the region through international law, good neighborly relations, dialogue and negotiation.
Details of Greece’s military overhaul were announced after the summer: A five-year program that will include weapons upgrades for all three branches of the armed forces and hiring an additional 15,000 personnel.
The program includes plans to purchase new frigates, anti-submarine warfare helicopters and drones, as well as an upgrade of Greece’s entire fleet of F-16 jets by 2027 in partnership with U.S. defense firm Lockheed Martin.
Greece has forged closer military ties with traditional allies France and the United States and expanded collaboration with Israel, Egypt and other countries in the region.
Military spending was cut back during a major financial crisis that started over a decade ago, but Greece is again facing acute financial problems due to the pandemic.
Lawmakers approved the budget later Tuesday by 158-148 votes.
According to budget figures, the country is expected to see a 10.5% contraction of its gross domestic product (GDP) this year, before registering 4.8% growth next year.
Due to the pandemic, bailout lenders have waived a requirement for Greece to deliver balanced budgets in 2020 and 2021. The budget deficit before debt servicing costs is expected to reach 11.76 billion euros this year and 6.67 billion euros next year, respectively worth 7.22% and 3.88% of GDP.
The debt-to-GDP ratio is set to surge to 208.9% this year, though much of that debt is held by European Union bailout lenders who have granted the country favorable repayment terms.