Cyprus has budgeted more than €1.28 billion for defence strengthening over the next three years, with spending under the specific heading set to more than double in 2027, as the island pushes ahead with military modernisation and begins drawing on EU defence funding.

The 2027 state budget, submitted to parliament on Thursday, provides €430.15 million for “defence expenditure”, compared with €176.8 million budgeted for 2026.

A further €425.15 million is provided for each of 2028 and 2029 under the Medium-Term Fiscal Framework, bringing the three-year total to €1.280 billion.

The sharp increase comes as Cyprus begins implementing its investment plan under the EU’s €150 billion Security Action for Europe (Safe) instrument.

Cyprus has been allocated almost €1.2 billion through Safe and in June received its first €177.2 million in pre-financing, equivalent to 15 per cent of its allocation. The European Commission said at the time that the money would allow Cyprus to “advance key defence investments, reinforce resilience, and upgrade its military capabilities in line with common European objectives”.

European Defence Commissioner Andrius Kubilius said the payment demonstrated Europe’s commitment to strengthening common security and defence, adding that the support would allow Cyprus to invest more quickly in the capabilities it needs.

More recently, a European Commission spokesperson told the Cyprus Mail that Safe was intended to allow member states to jointly procure capabilities including ammunition, missiles, air defence and ground combat systems.

“Joint procurement ensures interoperability and predictability, reduces costs, and creates the scale needed to strengthen the European defence industrial base,” the spokesperson said.

The Commission stressed that member states receiving the loans remained “in the driving seat”, having submitted their own national defence investment plans approved both by the Commission and the Council. 

The increase is clearly reflected in the defence ministry’s overall budget, which is set to rise from €628.04 million in 2026 to €894.68 million next year, an increase of around €266.6 million, or 42 per cent.

Of the 2027 total, €203.13 million is allocated to the Cyprus Army and €247.82 million to the National Guard, while €430.15 million falls under the separate defence strengthening heading.

The latter alone represents an increase of €253.35 million compared with the €176.8 million provided for this year. 

The increase also comes as the National Guard faces additional staffing requirements linked to the programmes now under way.

Defence Minister Vasilis Palmas, speaking at a swearing-in ceremony for newly recruited contract soldiers earlier today, referred to “increased staffing needs”, which he said were partly the result of programmes being implemented under Safe.

Palmas has previously said that the European financing would allow the National Guard to acquire military equipment to cover its priorities through to 2030. He described Safe as coming at a time when Europe faced significant capability gaps and when joint procurement programmes had become increasingly urgent.

In a recent interview with the Cyprus Mail, Palmas also identified drones and counter-drone capabilities, surveillance, the protection of critical infrastructure and strengthening air defences as areas receiving particular attention.

The publicly available budget does not, however, provide a detailed breakdown of the weapons systems or procurement programmes covered by the €430.15 million allocation.

Under the budget law, expenditure from the defence strengthening chapter requires prior authorisation from parliament, following a recommendation from the House defence committee once it has been briefed.

A separate explanatory document, detailing expenditure by account and article, is submitted to the defence committee and forms an integral part of the budget documentation.

The figures show that the increase is not limited to next year. Defence strengthening expenditure remains at €425.15 million in both 2028 and 2029, while the Defence Ministry’s overall budget is projected to reach €901.15 million in 2028 and €915.23 million in 2029.

The government had already signalled the shift when cabinet approved the budget earlier this month, with Finance Minister Makis Keravnos saying particular emphasis would be placed on increased defence spending in both the 2027 budget and the 2027-2029 fiscal framework.