With wars to its east and to its north, Greece has taken on a new geostrategic significance in the Eastern Mediterranean. The country has become a staging point for the Western alliance but also, equally important, a credible partner in the region.
This new status is a remarkable come-back story for a country that was ground zero in a complicated European financial crisis only a decade earlier.
First with the Russian invasion of Ukraine and now with the Israel-Gaza War, Greece is serving as a conduit for men and materiel for the US and other NATO allies. It is becoming a vital link in energy supply chains for the region. And it is increasingly seen as a safe haven destination.
Greece’s emerging role also underscores an evolving security architecture in the Eastern Mediterranean that has quietly taken place over the past decade.
Since at least 2010, Athens has developed multiple and overlapping defense and commercial ties with Cyprus, Israel and Egypt, as well as with the UAE and Saudi Arabia. It has cultivated ever closer cooperation with the US, which has been supportive of this new Eastern Mediterranean alliance, as America’s relations with Turkey – its erstwhile ally in the region – have frayed.
These days, the northern Greek port of Alexandroupolis has become a hub to supply NATO members Bulgaria and Romania, while the island of Crete is supporting US military operations in the Middle East and North Africa.
Greece is proceeding with a US$13 billion defense modernization program and has deepened its military cooperation with each of its regional partners through joint exercises and bilateral exchanges.
This new alliance is underpinned by growing trade and investment ties, particularly in the energy sector. Long before the recent conflicts, Greece, Cyprus, Israel and Egypt had found common interest in developing energy resources in the Eastern Mediterranean.
The discovery of bountiful natural gas reserves – first in Israel in 2009, and then in Cyprus and Egypt − ushered in a new era of cooperation among the four countries. This led to the proposal for the East Med pipeline to bring the gas via Greece to Europe, and then the creation of the East Med Gas Forum.
The US has been mainly supportive of this four-way energy alliance. It has since withdrawn its backing for the East Med pipeline − which, in any event, faces technical and financial hurdles − but still supports two successor projects, specifically two high-voltage underwater transmission cables to connect the power grid of Greece with Cyprus, Israel and Egypt.
In either case, Greece would act as the transit point for bringing either natural gas or electricity from the Eastern Mediterranean to Europe.
Those projects would complement Greece’s emerging role as an energy hub for southeast Europe. Two new natural gas pipelines and two new LNG facilities are providing the country’s northern neighbors with new sources of supply. Greece has also started exporting surplus power to nearby countries including Bulgaria, Albania and North Macedonia from its own fast-growing production of renewable energy.
Recognizing the prospects, the UAE signed a number of bilateral agreements with Greece in 2022 to develop both LNG and renewable energy projects, and the two countries announced a small, pilot project at this month’s COP28 climate summit in Dubai.
Likewise, there are growing commercial ties between Greece and Saudi Arabia in a range of sectors, including energy, but also extending to building supplies, engineering and environmental services, and in food and agriculture.
Last year, Greece signed a deal with Saudi Arabia to develop an 800 million euro ($877 million) high-speed data cable – the East to Med Data Corridor – that will help establish Greece as the Middle East’s digital gateway to Europe.
Israeli businesses have been coming in growing numbers to Greece. Recent investments have been in the hospitality sector, technology, the life sciences and defense.
At the same time, a small but growing number of Israeli funds and Israeli private citizens have been buying property with an eye to establishing residency or a second home in Greece. That has become particularly visible in the past year among select middle- and upper-class Israelis put off by political turns in Israel.
Since the start of the Israel-Gaza war, the numbers are said to have increased sharply. A similar calculus has been made in recent years by well-heeled Turks and Lebanese who have likewise found in Greece a haven from uncertainty at home.
For Greece, this new role as a pillar in the Eastern Mediterranean represents a dramatic transformation from just a decade ago when the country was in the throes of its financial crisis. Domestically, the country’s $240 billion economy has returned to its pre-crisis levels and is now one of the fastest-growing economies in the Eurozone.
And politically, public opinion has shifted towards a more pragmatic centrism. There is broad support for the reform policies of the incumbent New Democracy government, re-elected to a second term in office in June.
Greece’s rising status represents a fresh narrative on the international stage. The Greek government is currently seeking a non-permanent seat on the UN Security Council. If it succeeds it will cement Greece’s new standing in the region.
Alkman Granitsas is a consultant based in Athens. He was previously Bureau Chief at The Wall Street Journal for Greece and Cyprus. X: @agranitsas1
Republished with the kind permission of Syndication Bureau, which holds copyright.