Defense deal with Greece may help solve interceptor shortage
Israel and Greece have signed the 3 billion euro "Achilles Shield" deal. Rafael and IAI will establish a multi-layered air defense system for Greece to counter a wide range of threats.
After three years of negotiations, Israel and Greece have signed the "Achilles Shield" deal, valued at approximately 3 billion euros. Under the agreement, Rafael and Israel Aerospace Industries (IAI) will establish a multi-layered air defense system for Greece. This is the largest arms deal ever signed between the two nations and the second-largest in the history of the Israeli defense industry, following the Arrow 3 deal with Germany.
The system will protect Greece against a wide range of threats, from low-altitude drones and UAVs to fighter jets and ballistic missiles. Over the next three years, four types of coordinated air defense systems will be delivered. IAI's contribution includes the Barak MX system, with a range of up to 150 km, and radars from Elta. Rafael will supply the David's Sling, Spyder, and Drone Dome systems.
Shared tension with Turkey
This deal continues a series of defense agreements that have reached a cumulative value of 6 billion euros since the beginning of the decade. Greece's multi-year modernization plan, valued at 30 billion euros, also includes the procurement of F-35 aircraft.
Yair Kulas, head of the Ministry of Defense's Export Division, stated that the deal helps Israel expand production capabilities, which benefits the IDF's own armament processes. The G2G agreement includes technology transfers and local production components in Greece.
The deal occurs against a backdrop of shared tension with Turkey regarding territorial disputes in the Aegean Sea and Turkey's regional activities. Israeli defense officials emphasized the importance of deepening strategic cooperation in the face of regional instability.
The huge debt to the defense industries
Despite the deal, a heavy debt of approximately 15.5 billion shekels remains owed to IAI, Elbit, and Rafael. This debt stems from ongoing disagreements between the Ministry of Finance and the Ministry of Defense regarding the 2026 defense budget.
Nevertheless, Israeli defense exports reached a record 19 billion dollars in 2025, with air defense systems accounting for 30% of total exports. The European market remains a primary focus for Israeli defense companies amid the ongoing war in Ukraine.
