A CEASEFIRE BETWEEN Russia and Ukraine remains a distant prospect, and Europe has made slow progress towards creating a “reassurance force” to help support one. American military aid is dwindling and will soon run out altogether unless renewed by Donald Trump, which looks unlikely. The best way to guarantee Ukraine’s security, its supporters say, is to ensure it is armed to the teeth, ceasefire or no. To that end, on March 19th the European Commission outlined a two-part “porcupine strategy” for Ukraine.
First, Europe would procure more munitions and weapons systems on Ukraine’s behalf, including crucial air-defence missiles. Second, it would boost Ukraine’s own defence industry, which it calls “the most effective and cost-efficient way to support Ukraine’s military efforts”. The plan is the brainchild of Kaja Kallas, a former Estonian prime minister who is now the European Union’s top diplomat. She wants to double military aid to Ukraine this year, to €40bn ($44bn).
The case for investing in Ukraine’s indigenous arms industry is compelling. Ukraine was a big weapons-manufacturer during the Soviet era, but the industry largely vanished after independence in 1991. Nonetheless, there was an engineering base and a thriving new tech sector to draw on when Russia launched its full-scale invasion three years ago. The country had the foundations: a solid manufacturing sector and loads of engineering schools and universities from which people with highly specialised knowledge transitioned to defence, says Andriy Zagorodnyuk, a former defence minister who chairs the Centre for Defence Strategies, a think-tank in Kyiv. “Since 2022 the development has been extremely active. There is a constant innovation process,” he adds. Whereas arms procurement in the West typically takes years, in Ukraine an idea can be translated into a weapon in a soldier’s hand within months.
Last year Ukrainian arms firms churned out $10bn-worth of kit, according to a report in March by the Ukrainian Institute for the Future (UIF), another think-tank. That represented an extraordinary three-fold increase from 2023, and ten-fold from 2022. The more than 800 private and state-owned enterprises in the defence sector employ 300,000 skilled workers. Oleksandr Kamyshin, who oversees the defence industry for Volodymyr Zelensky, Ukraine’s president, says that this year production will be about $15bn, but the sector will have the capacity to produce about $35bn. The constraint is simply lack of money, which he hopes allies will assist with.
It is not clear what share of the needs of Ukraine’s armed forces are being met through local production. The UIF report puts it at 30%, but Mr Zagorodnyuk thinks it nearer 50%. What is not in doubt is that production is steadily rising, despite constant Russian strikes on factories. “Some facilities have been hit five times or more,” says Mr Zagorodnyk. “But they survive.” The factories are both dispersed and sprawling, which makes them resilient to attacks.
Ukraine expects to produce 5m of the first-person view (FPV) drones that dominate the battlefield, compared with 2m last year. It aims to make 30,000 bigger long-range drones, which can strike deep inside Russia. And Mr Zelensky has set a target of 3,000 sophisticated cruise missiles, such as the new Long Neptune, with a range of 1,000km (one recently struck an oil refinery in Crimea), and “missile-drones”, such as the turbojet-powered Palianytsia. Ukraine is also testing its own ballistic missiles on Russian targets; these are extremely fast and thus harder to intercept. Fabian Hoffmann, a missile expert, reckons those numbers for big missiles may be ambitious.
Innovation has made Ukraine’s electronic-warfare technology cutting-edge. Nico Lange, a former German defence-ministry official, thinks its capabilities now outstrip those of both Russian and Western systems. One recent success has been the Lima jammer, which scrambles the guidance system of the Russian glide bombs that had been devastating Ukraine’s defensive positions.
Ukraine is also boosting production of traditional materiel. Last year it sent over 2.5m artillery and mortar shells to the front line, helped by partnerships with Norway’s Nammo and KNDS, a Franco-German firm. (Many Ukrainian-made mortar shells, however, had serious quality problems.) Monthly production of the highly regarded Bohdana self-propelled howitzer, made by Ukraine’s KZVV, has accelerated from six to around 20. That is three times as fast as Nexter, a French firm, can make its more expensive CAESAR guns. With more European funding Bohdana production could double.
Yet there are significant gaps in what Ukraine can produce, making joint ventures with European and American firms vital. The chassis for armoured vehicles needed to take troops to the front line must still be imported. Rheinmetall, a German defence giant, recently opened the first of two factories in Ukraine to make its Lynx infantry fighting vehicle.
Another critical challenge is to reduce Ukraine’s reliance on Western air-defence systems, especially American ones. The quantity needed is “so vast that it can’t be met with imports”, says Mr Zagorodnyuk. In January Oleksandr Syrskyi, the country’s commander-in-chief, confirmed that Ukraine is developing a system that can shoot down ballistic missiles. A joint venture with the French firm Thales, part of a consortium that makes the SAMP-T air-defence system, will provide access to advanced radar and optoelectronics.
Direct European investment in Ukrainian defence firms is hampered by the country’s dodgy legal system and low credit rating. Mr Lange says investments should go to more dynamic private companies rather than to state-controlled firms. Ukrainian companies’ supply chains also have problems. Fabrice Pothier, a former NATO director of policy and planning, worries about their dependence on Chinese components for drones. Europe, he says, should provide the Ukrainians with “optics, gyroscopes, sensors and flight controllers”. Mr Zagorodnyuk thinks Europe could give Ukraine an edge over Russia by sending it advanced machine tools, components and software.
The quickest way to get kit into the hands of Ukrainian fighters, almost everyone agrees, is the “Danish model”. Ukraine identifies priorities; Denmark pays; and Danish experts evaluate suppliers and oversee the fulfilment of the order. Last year the Danes bought 18 Bohdana howitzers, which went straight to Ukraine’s armed forces. This was followed by funding for long-range drones and missile systems. The financing included €125m from Denmark’s national Ukraine Fund, €20m from Sweden, €2.7m from Iceland and €390m in interest generated by frozen Russian assets. On April 3rd Denmark pledged a further €264m. Ukraine hopes at least €1bn will be found for the initiative this year. Mr Kamyshin says that “five-plus” European countries are now using the Danish model.
Unfortunately, Ms Kallas’s plan fell apart at the European summit on March 20th. She was accused by some of failing to do the diplomatic groundwork to get leaders to agree in advance. Ultimately it was watered down: €5bn is to be spent on ammunition. Ms Kallas is determined to revive the plan. If she fails, Europe will have thrown away the fastest, most effective way for Ukraine to defend itself. ■
