Greece’s Asset Development Fund (TAIPED) earmarked 110 million euros ($121.35 million) for upgrading and modernizing the infrastructure at 17 ports across the country, including Aegean islands that have long been at the heart of disputes with its neighbor Türkiye.

Turkish media outlets say the project runs counter to the Treaty of Lausanne, which was ratified by the Turkish Parliament 101 years ago in August. The treaty says no naval base and no fortification will be established in the Aegean islands, which were shared between the two countries after a bitter conflict in the aftermath of World War I.

Greek officials says the project is essential to facilitate transportation between the islands, which have also been a popular destination for Turkish tourists this year amid eased visa conditions thanks to improving ties between Türkiye and Greece. The project’s aim is to "improve the security and connectivity of the islands," according to media. It covers expansion and improvement work in islands from Crete to Lipsi and Kastellorizo, media reports say.

After staving off Greek occupiers in the War of Independence, Türkiye’s then fledgling republic sought an absolute demilitarization of the islands lying in the close proximity of country’s western coast. The treaty signed in Lausanne was a culmination of earlier Turkish demands for demilitarization.

Greece often claims the 1936 Montreux Convention signed more than a decade after Lausanne changed the demilitarization status while the Turkish side insists this is not the case.

The two countries have often been at odds over the matter, especially after illegal incursions by Greek military into Turkish territorial waters and a period of tensions marked by dog fights of fighter jets of the two countries in the past decades.

After a long period of tensions marked by disputes over irregular migration, the Cyprus dispute, energy exploration and territorial sovereignty in the Aegean, Türkiye and Greece have been taking confidence-building steps for a fragile normalization of their relations, which moved into a new chapter with President Recep Tayyip Erdoğan’s landmark visit to Athens in December.

During the visit, the sides announced a friendship declaration, visa facilitation for Turkish citizens for 10 Greek islands in the northern Aegean for up to seven days and the decreased flow of irregular migrants to Greece.

While officials on both sides have expressed commitment to maintaining the positive climate, the issues are longstanding and deep-rooted, and neither side expects the process to be without turbulence, particularly in the Aegean where Turkish and Greek jets often scuffled until very recently.

Earlier in January, both Ankara and Athens reached respective deals with Washington for fighter jets, raising concerns of fresh skirmishes in the region.

Ankara has repeatedly warned its neighbor against entering an arms race with Türkiye, particularly on building a military presence on the disputed Aegean islands since the 1960s, in violation of postwar treaties.

Greece's purchase of F-35 fighter jets from the U.S. and the upping of defense budgets are meant to counter the protection of Turkish interests in the Eastern Mediterranean. Greece says it needs to defend the islands against a potential attack from Türkiye, but Turkish officials said continued militarization of the islands could lead to Ankara questioning their ownership.

After his meeting with Greek Prime Minister Kyriakos Mitsokatis in Ankara last May, Erdoğan stated that there were no "unsolvable" problems between the two countries, and the two leaders hailed the state of relations while pledging to further enhance bilateral ties. "We had a constructive and positive meeting and discussed problems in Türkiye-Greece relations. We will solve problems through dialogue."

National Defense Minister Yaşar Güler said last week that confidence-building steps with Greece have persisted despite recent provocative remarks by two ministers on the anniversary of Türkiye’s peace operation to stop attacks by Greek Cypriots on divided Cyprus.