The European Union is moving towards investing in the defense industry of Ukraine. The EU recently decided to allocate about $440 million to revive the Ukrainian defense industry.
This is reported in The Washington Post.
EU Investments in Ukraine's Defense Complex
The EU will use the money from the proceeds of frozen Russian assets to develop Ukraine's defence industry. This funding comes in addition to about $190 million provided by the Danish government.
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— I think there is a realisation that Europe is not capable of producing the weapons that Ukraine needs, and the easiest way for the Ukrainians is to do it themselves. If the Ukrainians have the materials and the money, they can do it themselves much more quickly,— said a European diplomat.
Jan Lesser, head of the Brussels office of the German Marshall Fund, also believes that investments in the Ukrainian defense sector will provide Ukraine with greater potential in the short term, and will also reduce pressure on production in Western countries. However, increasing production in Ukraine will not replace large-scale arms supplies from the West, notes Jan Lesser.
At the beginning of the war, Ukraine's defense industry was unable to absorb large amounts of funding. But the country tripled its weapons production in 2023, and then doubled this figure in the first eight months of 2024, Prime Minister Denys Shmyhal said earlier.
According to Defense Minister Rustem Umerov, about $4 billion was allocated for the development of Ukraine's defense industry this year. And Economy Minister Yulia Svyrydenko believes that the Ukrainian defense sector can produce significantly more — about 10-12 billion dollars.
However, even with the infusion of money from outside, Ukraine’s defense sector is still far from Russia’s. Ukraine still needs significant Western aid over the next few years, the Institute for the Study of War (ISW) said in a report.
Ukraine’s Defense Sector Is Growing
According to President Volodymyr Zelensky, Ukraine plans to produce about 1.5 million drones this year and has the capacity to make another 2.5 million. It is worth noting that before the war, this industry almost did not exist in Ukraine.
On Sunday, the Netherlands announced that it would spend $440 million to develop drones for Ukraine.
Russian dictator Vladimir Putin said that Russia will produce 1.4 million drones this year, compared to 140,000 in 2023. Now, both Ukraine and Russia are actively using drones at the front and against each other's military and infrastructure facilities.
In June, the EU and Denmark agreed on a mechanism under which Denmark will manage $630 million in revenue from frozen Russian assets, following the Danish model. The money will be used to pay for contracts that the Ukrainian Defense Ministry has already signed with arms manufacturers.
As part of this pilot project, 18 Ukrainian Bogdan 155mm self-propelled howitzers have already been manufactured.
— Denmark and the European Union will be able to show the rest of the world how effectively we spend Russian superprofits on weapons that are returning deep into Russia, — Dennis Virkelist, who heads the Ukrainian team at the Danish Defense Ministry, said that there would be no red lines for using such weapons.
In August, Kremlin spokesman Dmitry Peskov said that using frozen Russian assets and the profits from them was theft and would definitely have legal consequences.
Ukrainian weapons for export
Ukrainian officials hope that Ukraine will become a powerful arms exporter once it meets its own needs.
Ukrainian defense firms have already signed a number of agreements with Western companies for the joint production of drones and ammunition, as well as the creation of repair shops for Western military equipment.
By the way, such cooperation with Ukraine provides foreign companies with the opportunity to modify and test their products in real war conditions.
Ukraine has already signed the first contracts with the German Rheinmetall and the French-German group KNDS. The latter has already opened its office in Kyiv and will produce 155-mm shells for the Armed Forces of Ukraine.
