Act III · The argumentsStory 23 of 31
Defence, the fastest-growing line
The budget bill for 2027 raises the Ministry of Defence from €628 million to €895 million. No other ministry grows by as much, in euro or in per cent, and almost all of the rise is in one line that the budget does not itemise.
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For most of the past fifteen years defence took between 1.5% and 2% of the Cyprus economy, above the European average. The bill for 2027 moves it to a different level.
Ministry of Defence, € million a year, by part. Full colour: money spent. Lighter: the budget voted for 2026, the bill for 2027 and the plan for the two years after.
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Ministry of Finance, state budgets 2025 and 2026 and the 2027 budget bill, head 11 by chapter. Cash basis. Pay is chapters 11.01 and 11.02, the National Guard's running costs chapter 11.03, defence strengthening chapter 11.04. The budget does not publish what chapters 11.03 and 11.04 are spent on.
What the numbers say
The ministry's budget has three parts. Pay of the army's permanent officers and non-commissioned officers, with the ministry's administration, is €217 million in the 2027 bill. The running costs of the National Guard are €248 million. The third part is called defence strengthening, which is understood to be mainly equipment, and it goes from €177 million voted for 2026 to €430 million.
That third line explains the rise. The first two together grow by €13 million. Defence strengthening grows by €253 million, and the plan keeps it at €425 million in each of 2028 and 2029: €1.28 billion over three years.
The increase has in fact already started. In the 2027 budget bill the Ministry of Finance expects the equipment line to reach €273 million in 2026, against the €177 million voted.
How does that compare with other countries?
Defence spending as a share of the economy (GDP), 2024.
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Eurostat gov_10a_exp, general government expenditure on defence (COFOG 02), % of GDP, 2024.
On the European statistical measure, which counts all public spending on defence and not only the ministry, Cyprus spent 1.8% of its economy in 2024. That placed it ninth equal with Denmark among the 27 EU countries; the EU as a whole spent 1.5%. The Ministry of Finance projects 2.4% for 2027.
Defence spending as a share of the economy (GDP), Cyprus and the EU as a whole, from 2010.
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Eurostat gov_10a_exp, general government expenditure on defence (COFOG 02), % of GDP. This is the statistical measure of what was spent; a ministry's budget is a different figure.
What it means for you
In 2027 the defence ministry's budget comes to about €900 for every resident, against about €630 in 2026.
Part of it is probably borrowed. Cyprus has been approved for a loan of up to €1.18 billion from the EU's SAFE programme, set up in 2025 to finance defence purchases. The first €177 million arrived in June 2026. It is repaid over 45 years, with no repayment of the loan itself due in the first ten. So some of what is bought now will be paid for by taxpayers into the 2070s.
The budget documents do not say that the defence strengthening line is paid for by this loan. The amounts and the timing fit, and that is as far as the published record goes.
What people argue
Is it too much? Part of the island has been occupied by Turkish forces since 1974, and the case for a stronger National Guard starts there. The numbers cannot settle how much is enough. What they do show is how the money is raised and how far it can be examined.
Should it be borrowed? A loan on SAFE terms is long and, as the programme is described, cheaper than a small state could borrow on its own. It spreads the cost of equipment over the years it is used. It is still debt, taken on while the state is paying debt down. The government has said it does not need the EU's exemption that lets defence spending be left out of the deficit rules, which means the spending counts in full against the ordinary limits.
Which side convinces you?
Should it be borrowed?
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Can anyone check it? The budget prints the equipment line and the National Guard's running costs as single figures. What they are spent on is given only to the House Defence Committee. It means €678 million of the 2027 bill cannot be examined by the public or the press.
How we know
The budget figures are from the state budgets for 2025 and 2026 and the 2027 budget bill, Ministry of Defence by chapter, on a cash basis. The revised figure for 2026 is the Ministry of Finance's own estimate, printed in the bill.
The comparison between countries is Eurostat's government spending by function for 2024. It measures what was spent, records equipment when it is delivered and covers all of government, so it differs from the ministry's budget. The projection of 2.4% for 2027 and the terms of the SAFE loan are from the Ministry of Finance's Annual Progress Report of April 2026; the first payment is from the European Commission.
That the defence strengthening line and the SAFE loan are connected is our reading of the amounts and dates. No budget document states it. Nor does the budget say what that line buys; that it is mainly equipment is the general understanding, not a published breakdown.