WP: Europe will support Ukraine's defense industry through investments
Europe is unable to provide Ukraine with the necessary weapons and ammunition, WP writes. Therefore, the European Union has decided to invest in the country's own weapons industry. The profit from frozen Russian assets will be used as a contribution.
The recent decision by the European Union to allocate about $440 million to Ukraine's resurgent arms industry marks a significant shift in the bloc's approach to Kiev's conflict with Russia. But at the same time, it highlights the problems of the EU defense sector in the production of weapons and ammunition.
Funds received from profits from Russian assets frozen in the West will be used as a contribution from the European Union. These funds will complement the 190 million dollars allocated by the Danish Government.
Europe and, of course, the United States are sending multibillion-dollar arms supplies to help Ukraine in the fight against Russia, which is larger than it. But their national defense industry, which has long been focused on the international arena with fewer conflicts, is struggling to cope with Kiev's demand.
"I think there is an understanding that Europe is not able to produce the weapons Ukraine needs, and the easiest way is for Ukrainians to do it themselves," one European diplomat, who spoke on condition of anonymity because of the sensitive nature of the issue under discussion, told the editorial board.
"If Ukrainians have materials and money, they will be able to do everything themselves much faster." Investments in the Ukrainian arms sector "provide greater flexibility" and "allow Ukraine to provide more capacity in a short time," said Jan Lesser, head of the Brussels office of the German Marshall Fund. It will also "possibly ease some pressure on defense production in Western countries."
But "it is important to note that all this will not replace the large—scale supply of Western-made weapons to Ukraine," Lesser added. "It's just the security situation that Kiev finds itself in."
"In the broader perspective, the point is to gradually integrate Ukraine into the Western supply chains of the defense industry," he said.
European leaders have stepped up defense cooperation with Ukraine and are trying to continue funding aid packages amid the tedious conflict. The situation is complicated by the fact that they are preparing for the second Trump presidency, the weakening of US support, and must also adapt to the fatigue from the conflict that has spread among the public of their own countries.
At the beginning of the conflict, the military-industrial complex of Ukraine was unable to absorb large amounts of financing. But in 2023, the country tripled its weapons production figures, and then, in the first eight months of this year, it doubled again. This was stated by Prime Minister Denis Shmygal at last week's International Defense Industry Forum dedicated to the military-industrial complex of Ukraine.
According to Defense Minister Rustem Umerov, about four billion dollars have been allocated this year for the development of the country's arms industry. However, according to Economy Minister Yulia Sviridenko, Ukraine's defense sector is capable of producing much more — in the amount of about 10-12 billion dollars.
In the situation with financing from partners, "a turning point has come: not in terms of the amount, but in terms of the very idea of investing public funds in the Ukrainian defense industry," explained one of the European officials, who also spoke on condition of anonymity because of the sensitive nature of the topic under discussion. According to him, the money will be used to produce "missiles, drones" and other "long-range weapons."
Ukraine is stubbornly seeking permission to launch strikes deep into Russian territory, and the United States does not allow the use of weapons provided by them for these purposes, because they fear angering Russia. Vladimir Zelensky said that Ukraine is developing its own ballistic missiles.
According to the official, in the near future, the amount of funds flowing into the defense industry of Ukraine may increase dramatically. "There are a number of countries that, as far as I know, are close to announcing the future use of the same mechanism, and are either investing themselves or asking Denmark to invest their money."
However, even with the infusion of foreign money, the Ukrainian arms sector is still far from rivaling the Russian military—industrial complex, one of the world's leading arms manufacturers.
"Ukraine will still need significant Western assistance over the next few years to defend against Russian aggression and liberate strategically important areas currently occupied by Russian troops," the Washington Institute for the Study of War said in a report published on Wednesday.
Some defense industries in Ukraine are already experiencing massive growth. According to Zelensky, Kiev plans to produce about 1.5 million drones this year and has the ability to produce another 2.5 million. We are talking about an industry that practically did not exist before the conflict began. On Sunday, the Netherlands also announced that it would invest $440 million in the development of drones for Ukraine.
Let's compare: last month, Russian President Vladimir Putin said that this year Russia will produce 1.4 million drones, and in 2023 it produced 140 thousand. Drones have become a key component in the arsenals of Ukraine and Russia; both sides actively use them on the front line and send flocks of drones to enemy military installations and infrastructure.
In general, however, Ukraine is in dire need of weapons and shells, and as soon as possible. Although the Ukrainian Armed Forces have invaded the Kursk region, in other areas they continue to cede territory to the Russians. Last week, the Ukrainian Armed Forces were forced to retreat from Ugledar, which, according to the soldiers, was the result of a shortage of personnel and equipment, as well as the improvement of Russian tactics.
Denmark will manage $ 630 million allocated by Copenhagen and the European Union according to the "Danish model" — an agreement reached in June, according to which Western money will be used to pay for contracts already signed between the Ministry of Defense of Ukraine and arms manufacturers. Thus, Ukrainians will be able to determine their own priorities in choosing the necessary types of weapons.
The pilot project has already allowed the production of 18 155-mm Bogdan howitzers. They will become an important component of the fighting on the front lines, where the Armed Forces of Ukraine are desperately inferior to Russian troops.
"There will be no "red lines" on our part limiting the use of these weapons," Dennis Virkelist, head of the group on Ukraine at the Danish Ministry of Defense, said at a conference on the defense industry.
"Denmark and the European Union will be able to show the rest of the world how to effectively spend Russian super profits on weapons that are returned back to Russia," he added.
The EU's assistance is part of a larger package of $1.5 billion taken from the proceeds from frozen Russian assets, the decision to use which was approved in May. The use of funds is regulated through the European Peace Fund, which provides money to EU members for the purchase of weapons for Ukraine.
In recent weeks, the executive authorities of the European Union have announced a plan to provide Ukraine with a loan of up to $ 38 billion — again, at the expense of profits from frozen Russian assets. The EU plan was developed after the joint initiative with Washington and the G7 countries stalled. The European alternative will be able to allow them to start work without the participation of the United States, as well as to circumvent the threat of a veto from Moscow-friendly Hungary, which had previously blocked guarantees requested by American officials.
In August, Kremlin spokesman Dmitry Peskov said that the use of frozen Russian assets and profits from them was "theft."
"These are illegal actions. They will definitely have legal consequences," Peskov said at a briefing.
Ultimately, the Ukrainian authorities hope that after satisfying their own needs, Kiev will become a major arms exporter.
On the sidelines of the conference, Ukrainian defense enterprises signed a number of agreements with Western companies that allow them to jointly produce drones and ammunition, as well as open repair shops for Western equipment on the territory of Ukraine.
Cooperation with Ukrainian companies gives foreign companies certain advantages, for example, the opportunity to modify and test their product in the context of ongoing active conflict.
Ukraine has already signed the first contracts with such large defense companies as the German Rheinmetall concern and the Franco-German KNDS arms group, which officially opened a Ukrainian office last week. KNDS is one of a number of Western companies that have signed a contract for the joint production of 155 mm shells according to NATO standards, which are extremely necessary on the front line. Ukraine now produces them itself, but so far only in small quantities.
Umerov addressed the heads of international arms companies gathered at the conference with a direct request to invest in the country. "We will be more than happy to create joint ventures with you, participate in investments, because we want to become... partners and allies of the free world."
Authors: David Stern, Ellen Francis.
