Cypriot defence industry: CyDSIC meets Finance Minister Keravnos over SAFE and a goal of at least 15% domestic share

Cyprus’s defence industry is asking for a bigger role in the armament programmes that the European SAFE (Security Action for Europe) instrument will finance. Board members of CyDSIC, the Cyprus Defence and Space Industry Cluster, which belongs to the Cyprus Chamber of Commerce and Industry (CCCI), met on Friday, November 13 at the Finance Ministry in Nicosia with Cyprus Finance Minister Makis Keravnos. The discussion focused on the sector’s development, on European programmes and on financing through SAFE.

CyDSIC members presented to the minister the activity of Cypriot companies in defence and space, the challenges they face and their participation in EU defence and space programmes. According to Keravnos, it is a dynamically growing, exporting sector, which creates specialised jobs, brings investment and improves the country’s current-account balance. The minister also stressed the need to support new businesses in knowledge-, research- and innovation-based sectors, noting that high-tech sectors make the Cypriot economy more productive, competitive and resilient. As he said, his ministry supports policies that make it easier for businesses to access financing tools at national and European level.

A goal of at least 15% domestic share

Tasos Kounoudes, founder of Cypriot SignalGeneriX and a member of the Cyprus Defence Industry Council, wrote on X that the discussion was “constructive” and concerned making use of SAFE. He recalled that the national goal is for domestic industry to cover at least 15% of the programmes, which he called a “significant and unique opportunity” for the sector’s development. He also thanked Keravnos and Defence Minister Vasilis Palmas, the Cypriot Presidency of the EU Council and President Nikos Christodoulides for their support.

The 2027 defence budget and SAFE

The meeting took place on the same day Palmas presented to the House Finance Committee his ministry’s 2027 allocations, which reach €894.7 million, against €628 million in 2026. Of that, €430.15 million is for defence reinforcement. If SAFE funds are added, Cyprus will spend about 2.2% of GDP on defence in 2027. The defence minister set the domestic defence industry as a priority, saying that “the benefit is twofold,” since the dual-use products of Cypriot companies can cover the needs of both the National Guard and the rest of the public sector. The budget includes €500,000 for a National Defence Industry Development Plan and €2.5 million for participation in European Defence Fund (EDF) programmes and in research and innovation actions. Through SAFE, Cyprus has already signed a framework agreement with France and Sweden for Akeron MP anti-tank missiles.