The most consequential security development is the reported triangular negotiation between Washington, Ankara and Moscow over Turkey's return to the F-35 programme — with Russia potentially agreeing to transfer Turkey's S-400 systems to Qatar in exchange for other benefits, thereby removing the CAATSA obstacle. Athens is treating this as a strategic inflection point. The immediate concern is whether Turkey could receive six pre-built F-35s before Greece takes delivery of its first, currently expected in 2028-29. Greek officials have signalled that their response will focus on political assurances rather than direct opposition — a posture that reflects both the limits of Athens's leverage over Washington and the depth of its current US alignment.
Separately, Greece and Cyprus submitted a joint proposal under the EU's SAFE programme for the co-production of an unmanned combat aerial vehicle, with the Crete-based ALTUS-LSA company having already completed live-fire trials of its Kerveros UCAV. Parliament ratified bilateral defence agreements with Bulgaria and Montenegro. Foreign Minister Gerapetritis visited Tokyo, where he and his Japanese counterpart aligned on rules-based international order, investment cooperation and shipping, signalling Greece's effort to build diplomatic depth beyond its immediate neighbourhood.
The domestic political picture shifted sharply this week. SYRIZA's collapse accelerated with six further MP defections — leaving the party with just 17 seats, down from 47 after the 2023 election — as it prepares for a leadership vote following Famellos's resignation last week. The EPPO charged four sitting New Democracy MPs — Skrekas, Boukoros, Senetakis and Papakosta — as part of its agricultural subsidy fraud investigation, a significant institutional moment for a ruling party already under pressure on the wiretapping scandal and from Samaras's legal intervention at the Supreme Court.
The constitutional revision committee concluded its work: New Democracy will back the full package, PASOK will vote "present" on its own proposals and against the rest, while KKE, SYRIZA, Elliniki Lysi and NIKI oppose the proposals entirely — confirming that the required three-fifths majority in the next parliament is a near impossibility. Mitsotakis reiterated during a visit to northern Evia that elections will take place in spring 2027, a message now being delivered with notable consistency across public appearances. Planning for the Thessaloniki Fair package is being run in multiple scenarios given fiscal uncertainty, with a final decision deferred to late August.
On the legislative front, the week brought notable activity. Parliament approved the national framework implementing the EU AI Act — among the first in the bloc to do so. The government simultaneously fast-tracked a proposed ban on social media for under-15s, inserting it into an unrelated justice reform bill ahead of the summer recess, though the EU TRIS notification period does not expire until 10 August.
A Dianeosis study on lawmaking covering 2001-2025 provided the broader context: Greece passes roughly 100 laws per year alongside thousands of ministerial decisions, with government gazette issues quadrupling since 2001 to 7,790 in 2024 — a regulatory explosion that the study links to political culture, polarisation and crisis-era emergency rulemaking, and that imposes heavy compliance burdens on businesses.
The economic data this week added texture to an already complicated picture. The State Budget recorded a primary surplus of €4.48 billion for the first half of the year, exceeding the target by €2.53 billion — though the underlying outperformance adjusted for timing differences is a more modest €159 million. Bank of Greece Governor Stournaras, addressing the Hellenic Bank Association, confirmed the inflation forecast of 3.8% for 2026, rising from 2.9% in 2025, driven by energy price pass-through into services, food and industrial goods, before easing to 2.6% in 2027. He highlighted banking sector health — strong capital, a BBB+ rating for all four systemic banks, falling non-performing loans — while listing nine structural problems still weighing on the economy: low productivity, demographic pressure, skills shortages, housing unaffordability, weak public administration, slow justice, high public debt, a persistent current account deficit and above-average inflation.
Labour market pressures are intensifying from an unexpected direction. Job vacancies exceeded 31,000 at end-2025, up by approximately 2,700 year-on-year, with the largest shortfalls in education, healthcare, manufacturing and retail. The cause is not a lack of job creation but a shrinking pool of available workers: the foreign labour force fell by 74,400 in a year to just 97,500, with legally employed foreigners down 37%. Foreign workers, who made up 8.2% of the workforce in 2008, now account for just 2.9%. All employment growth over the past year has come from Greek workers alone. Climate pressures are meanwhile registering in household behaviour: air conditioning energy consumption has nearly doubled since 2018, now accounting for 7.4% of household energy use — third highest in the EU — while warmer winters are structurally disrupting the clothing retail market.
Taken together, this week's developments point to a Greece where institutional momentum — in AI regulation, defence cooperation, diplomatic outreach and fiscal performance — is real, but where the underlying structural tensions in taxation, labour supply, lawmaking quality and security are deepening at the same pace.