15-year shipbuilding programme to build warships and submarines in Greece

Greece must move ahead with the immediate establishment and approval of a 15-year programme for the construction of Hellenic Navy ships and submarines in Greece.

“Greek shipyards have the infrastructure, know-how, technology, ecosystem and all the necessary support to immediately begin building warships and submarines in Greece,” Panos Xenokostas, President of the Hellenic Shipyards Association (HSA), said in a speech at the EDIP Info Day and Greece-Cyprus Defence Industry Day.

The HSA president presented a plan that both Greece and Cyprus should jointly adopt in order to achieve the necessary level of autonomy within a short period and make the transition to a new era. The proposal regarding Cyprus includes:

– strong commercial cooperation, with Greek shipyards among the preferred options for Cypriot shipowners;

– joint government initiatives under the umbrella of the 15-year programme; and

– 70% technology transfer to the Cypriot shipbuilding ecosystem.

Xenokostas said in his speech that “every country that has sought to establish a sustainable shipbuilding defence industry has done so in one and only one way: through an approved, binding, 15-year domestic shipbuilding programme. A programme that will provide predictability, enable investment in infrastructure and human resources, and create the critical mass needed for competitiveness.

“And this 15-year programme, from the outset, will explicitly provide for exports to third countries. We are not designing only to meet our own needs. We are designing to meet the needs of Southern and Eastern Europe and our allies.”

70% as a guarantee of SME viability

Xenokostas made particular reference to small and medium-sized enterprises (SMEs) and the Greek shipbuilding ecosystem represented by the HSA, which, in cooperation with other Greek defence-sector companies, can contribute to the new national effort.

“70% Greek added value is not a number. It is the guarantee of viability for SMEs. Today at ONEX, for a frigate or a submarine, we are at 70%.“

“70% is the guarantee that a sustainable ecosystem of hundreds of SMEs will develop and expand around the shipyards. This ecosystem of more than 200 companies that we have already mapped is the real deterrent. Because the knowledge and added value remain here.”

Xenokostas also spoke for the first time about the areas into which the Greek defence industry could expand by acquiring know-how that would help it take the next step.

“It is true that, at this stage, there are no domestic capabilities for the full production of engines and missile systems. No European shipyard produces everything on its own.

“This, however, can change substantially by covering a large part of their lifecycle and upgrades in Greece.

“We are talking about maintenance, repair, overhaul, integration, software upgrades, testing and certification. This is where know-how is built, this is where added value remains, and this is where highly skilled jobs are created. From the lifecycle, we gradually and safely move towards co-production.”

Greece-US-Korea platform

Addressing those who are sceptical about the effort, Xenokostas said:

“This strategy is already being implemented through the Greece-US-Korea strategic partnership.

“America brings the technology, the weapon systems and global certification. Korea brings scale and speed of production.

“Through the shipyards and the ecosystem represented by the HSA, Greece brings the reliable industrial and shipbuilding partner needed to develop the largest shipbuilding and industrial hub in the Eastern Mediterranean, on a par with other major European groups.

A ship built in Elefsina is a European product. As such, it can be exported to our allies using European funding. This means jobs here, know-how here, deterrence here.”

Xenokostas warned the EU that it must oversee the allocation of programmes to prevent them from ending up with two or three major groups, creating a risk of bankruptcies during difficult economic cycles.

He also argued that defence research programmes should be linked to a commitment to purchase the final product.

He concluded his speech stressing: “We must build ships in Greece. It is the last complete platform that we can still build here.”

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