On October 13, the Defense Ministry unveiled the Pyrpolitis, a kamikaze sea drone that was “designed, developed and built entirely by the Hellenic Navy.” It will presumably be held up as proof that Greece can build its own weapons, a real engineering achievement for a team of just five people, according to reports.
This also raises a question that Greek policy has avoided for years. If the state wants a strong private defense industry, what happens when the state decides to compete with it?
The state is every role at once
In most functioning defense markets, the roles are separated. The ministry sets requirements, industry competes to meet them, and independent testers judge the results. The state holds the budget and the contracts, but it does not usually design and build the product itself.
In Greece’s emerging drone sector, one institution can occupy nearly every seat. The armed forces are the customer and decide what gets bought. They are also the requirements-setter, as the Navy General Staff was when it listed “Kamikaze UUV/USV” among its needs in February. State money funds the research and development, state ranges and exercises decide whose product works, and state arsenals and labs can build the same thing in-house.
Any one of these roles is normal. Holding all of them creates an obvious conflict of interest. A company that shows up with a prototype is asking a competitor to evaluate it, fund it and then buy it.
The ELKAK precedent
The clearest test of that conflict is the program the state itself created to avoid it.
In February 2025, the Hellenic Center for Defense Innovation (ELKAK) posted its first calls for expressions of interest, including one for developing unmanned surface vessels in two designs and multiple configurations, capable of autonomous or semi-autonomous navigation. The call carried a budget of €12 million, and the requirements came from the Navy General Staff. It asked for vessels that could operate alone or in swarms, with domestically produced electro-optical sensors, thermal cameras, laser designators, navigation radar and countermeasures.
Greek industry answered. The deadline was extended to June 30, 2025, and a total of 32 Greek proposals were submitted. That is a large turnout for a new agency in a young market, and it signaled that Greek firms were ready to invest. Preparing a credible bid for an armed, autonomous vessel is not cheap. It means engineering time, hull and electronics design, sourcing of sensors, partnerships and often working prototypes. Companies that took part say they put real resources into that work, and some built and tested hardware, on the understanding that ELKAK’s process would lead to a state-backed Greek USV program.
Seventeen months later, the state has unveiled a USV that it says its own Navy designed and built. The public record contains no announcement showing how the ELKAK call concluded or how its bidders were treated. Companies that spent money on bids and prototypes are left to draw their own conclusions, and so are the firms weighing whether to answer ELKAK’s next call.
The state is entitled to change course. Requirements evolve, and programs get cancelled. But a government that invites 32 companies to compete and then proceeds alone owes them an explanation. If it doesn’t offer one, it teaches the market that bidding in Greece is a favor to the state rather than a business.
Proven in the field, but not yet bought
The companies did not only bid. They showed up, repeatedly, and they delivered.
During the Navy’s first UVEX exercise in March, a Resilience Tech FPV drone was launched from a Trygons USV, with Alpha Autonomy’s autonomy software adding to the operation and a Starlink link tying it into a satellite command-and-control architecture. The launch of an FPV from an autonomous surface vessel was a world first. Trygons later said it tested its RF49D USV at ELKAK’s “Dourios Ippos 2026” exercise in June, with onboard AI computing, autonomous navigation and command-and-control software that it says was developed entirely in Greece.
Taken together, that is a working national supply chain, from hull and autonomy software, power systems and strike payload, demonstrated in front of the armed forces and in some cases in front of allies. It was built by firms that put their own money and engineering time into it, and mounting the exercises cost the state considerable sums too.
The state has shown it knows how to convert such demonstrations into purchases. After last November’s Parmenion exercise, where Greek companies field-tested prototype combat drones, ELKAK signed contracts in March for domestically developed UCAVs. No comparable USV contract has been announced. A taxpayer is entitled to ask what the exercises were for, and a company is entitled to ask why a successful demonstration produced a state prototype instead of an order.
Failing to buy what the exercises proved works is the worst of both outcomes. The state absorbs the cost of the tests and the companies absorb the cost of the preparation, but the market that justified both never opens. Each repetition costs money and goodwill, and it makes the next invitation to “prove your capabilities” harder to accept.
What the Lefkada episode adds
The public record of the last six months is revealing, even though it proves less than some will claim.
A Ukrainian explosive sea drone washed up on Lefkada in May. Greek forces dismantled it and examined its electronics, communications and software. A senior military source told Kathimerini, “The only thing we have to do is copy it.” A deputy minister told Parliament the vessel had been examined thoroughly, and a later report spoke of “selective reverse engineering.” Months later, the Navy unveiled its own kamikaze USV.
No public document shows that the Pyrpolitis uses any subsystem from the captured vessel, and it would be wrong to say it does. The ministry says the design is the Navy’s own, and that deserves to be taken at face value until evidence says otherwise.
But the problem doesn’t depend on the answer. When a state examines foreign technology, discusses copying it and then produces a similar system through a closed internal program, no private company can tell how the process worked. Neither can the public. A founder deciding whether to invest years and capital in a Greek drone company has to price that uncertainty in. Investors will do the same, or avoid the market altogether.
The case for the state
The defense of in-house development deserves a fair hearing. Armed forces have legitimate reasons to build certain systems themselves. Some capabilities are too sensitive to share with outside firms. Speed matters in wartime. A small state team can iterate faster than a procurement cycle that takes years, and Greece has watched Ukraine show how quickly battlefield-driven development can move.
Sovereignty is also a real argument. A country that depends on foreign suppliers for its core weapons is exposed, and in-house capability is one way to reduce that risk.
None of this is wrong. The problem is not that the state builds things. It is that the state builds things without rules telling industry where it will and won’t compete.
Industry’s side of the bargain: stop competing where the barrier is lowest
Greek companies need to be honest about where they are competing. The barrier to entry for building a drone platform is low and falling. A hull, a motor, a flight or vessel controller, a commercial camera, a satellite terminal and some integration software are available to almost anyone. That is why a five-person Navy team can produce a working prototype in about six months, and why the 32 ELKAK bidders could assemble credible proposals so quickly.
It is also why integration is the weakest ground on which to ask for a protected market. If a small state team can do the integration itself, a private firm whose main skill is assembling other people’s parts has little to offer that the state cannot replace. It also has little to differentiate it from the other 31 bidders.
The reported assessment of the captured Ukrainian vessel points the same way. A source quoted by Kathimerini in June described the hull and firing mechanism as relatively simple. The real value, the source said, lies in the communications link between vessel and operator, the encryption protocols and the control code. Those are the hard parts, and they are where a sovereign supply chain would actually be sovereign.
That suggests a different strategy for Greek industry. Instead of competing to build the whole vessel, firms can specialize in designing and manufacturing the components that others must buy: secure datalinks and mesh radios, encryption modules, electro-optical and thermal sensors, resilient navigation that holds up under GNSS jamming and spoofing, flight and vessel controllers, and the power electronics around them. ELKAK’s own USV call, with its requirement for domestically produced sensors, already pointed in this direction.
This approach has three advantages. First, it is harder to copy. A well-designed, tested and certified component takes years of work, accumulated know-how and manufacturing capability. A state team cannot replicate that between exercises, and a rival cannot assemble it from catalog parts.
Second, it defuses much of the conflict of interest. A component supplier does not compete with the Navy’s integration team. It sells to it. The Navy’s in-house projects become customers rather than rivals, along with the Coast Guard, other Greek integrators and, eventually, foreign buyers. Selling to many customers also reduces a firm’s dependence on any single procurement decision.
Third, it makes sovereignty real. A vessel built in a state yard but dependent on imported communications, imported sensors and foreign chips is Greek in its paperwork only. A Greek supply chain for the parts that matter is worth more to national security than another Greek-assembled boat.
None of this is easy. Component businesses need capital, certification, patient funding and volume, and Greek firms will need partners and export channels to reach it. The state also has to do its part by committing to buy, by opening its test ranges to component makers on fair terms, and by protecting their designs. But if the aim is a defense industry that survives its first contract, components are a more defensible place to stand than integration.
What a credible policy would look like
If Athens wants an industry rather than a collection of state projects, a few commitments would go a long way.
It should start by publishing a division of labor that says which capabilities the armed forces will keep in-house and which they will leave to industry. Every competitive call should then be closed out publicly, with the outcome, any cancellation and the reasons stated. Where the state abandons a call after companies have built prototypes, it should consider reimbursing their costs or offering those firms a route into later programs.
The roles also need separating. Whoever tests and evaluates products should not be building a competing one, or at least should be walled off from that work. When captured or acquired foreign systems are studied, the rules should say who may see the findings and whether companies can access them. A firm that shares designs in a state evaluation should know how that data will and will not be used.
The state should also steer its own demand toward sovereign components, with multi-year purchase commitments for the datalinks, sensors, controllers and secure electronics that Greek firms can credibly make.
Finally, the state can prototype if it must, but it should compete the production run openly and disclose what its in-house projects cost, so that taxpayers and bidders can compare them with industry quotes.
The bottom line
Greece can have a defense industry or a defense bureaucracy that builds everything itself. It is hard to have both without clear boundaries, and those boundaries have to be drawn by industry as well as by the state. The state should stop competing with firms that bid in good faith, and firms should stop competing where a five-person team can match them. The Pyrpolitis may be a success, but its real test is what it signals to the people deciding whether to build the next one outside the state.
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