Israeli defense firms eye Greek Cypriot operations to access EU financing

Israeli defense companies are interested in establishing operations in the Greek Cypriot Administration, potentially allowing them to benefit from the European Union's SAFE defense financing program, the Cyprus Mail reported on Thursday.

The issue was among those discussed during Israeli President Isaac Herzog's one-day working visit, during which he held talks with Greek Cypriot leader Nikos Christodoulides in Nicosia, according to the newspaper.

The Greek Cypriot Administration is eligible for up to €1.18 billion (nearly $1.4 billion) in financing under the EU's Security Action for Europe (SAFE) program, designed to support defense investment by member states.

However, establishing a presence in the Greek Cypriot Administration would not automatically give Israeli companies unrestricted access to SAFE-funded procurement.

Contractors generally must be established and have their executive management in the EU, while the program limits components originating outside the bloc to 35% of estimated component costs.

The two sides also discussed defense cooperation and additional Israeli military equipment the Greek Cypriot Administration could acquire.

Israel is already a major defense supplier to the administration, which has acquired Israeli-made Barak MX air defense systems and radar platforms.

Talks also covered the Aphrodite gas field and the Great Sea Interconnector electricity project.