Defense industries in Eastern and Central Europe are producing arms, ammunition and other military goods at a pace not seen since the Cold War as governments aim to aid Ukraine in its fight against Russia.
Allies have been supplying Kyiv with arms and military hardware since Moscow launched a full-scale invasion of its western neighbor on February 24, depleting their supplies.
The US and Britain have pledged the most direct military aid to Ukraine until early October, a tracker from the Kiel Institute for the World Economy shows.
But Poland and the Czech Republic are not too far behind, in third and ninth place respectively.
Some former Warsaw Pact countries are still suspicious of Russia – their main Soviet-era overlord – and see aid to Ukraine as a regional security issue.
But according to government officials and business representatives, the conflict also presented new opportunities for the defense industry in many European countries.
Production has ramped up as inventories dwindle
It’s not just the ongoing war in Ukraine: Many countries have increased their military and defense spending to both replace what was donated and to top up what was previously in stock.
“There is a real opportunity to open up new markets and increase export earnings in the coming years,” said Sebastian Chwalek, CEO of Poland’s PGZ, a state-owned arms and ammunition consortium.
PGZ controls more than 50 companies that make everything from armored vehicles to unmanned aerial systems, and has stakes in dozens more.
It now plans to invest up to PLN 8 billion (EUR 1.75 billion) over the next decade – more than double its pre-war target, Chwalek told Portal.
This includes new facilities located farther from the border with Russia’s ally Belarus for security reasons, he said.
Other manufacturers are also increasing production capacity and racing to hire workers, companies and government officials from Poland, Slovakia and the Czech Republic said.
Immediately after the Russian attack, some Eastern European militaries and manufacturers began emptying their stores of Soviet-era weapons and ammunition with which Ukrainians were familiar, while Kyiv waited for standard NATO equipment from the West.
As these supplies have dwindled, weapon manufacturers have ramped up production of both older and modern gear to keep supplies going.
The flow of arms has helped Ukraine push back Russian forces and retake tracts of land, most recently in the south and east of the country.
Chwalek said PGZ will now produce 1,000 Piorun MANPAD man-portable air defense systems in 2023 – not all for Ukraine – compared to 600 in 2022 and 300 to 350 in previous years.
The company, which it says has also supplied artillery and mortar systems, howitzers, bulletproof vests, small arms and ammunition to Ukraine, is expected to surpass a pre-war sales target of PLN 6.74 billion for 2022 .
A long tradition becomes a useful skill
The armaments industry in Eastern and Central Europe dates back to the 19th century when Czech Emil Škoda started making weapons for the Austro-Hungarian Empire.
Under Communism, huge factories in Czechoslovakia — the Warsaw Pact’s second largest arms producer — Poland, and elsewhere in the region kept people busy making weapons for the Cold War conflicts Moscow was fomenting around the world.
“The Czech Republic has been one of the powerhouses of arms exporters, and we have the manpower, material base and production lines needed to increase capacity,” said its Ambassador to NATO, Jakub Landovsky.
“This is a great chance for the Czechs to increase our needs after they gave the old Soviet-era stocks to the Ukrainians. It can show other countries that we can be a reliable partner in the defense industry.”
The collapse of the Soviet Union in 1991 and NATO’s expansion into the region forced companies to modernize, but “they can still quickly make things like ammunition that fit the Soviet systems,” said Siemon Wezeman, a researcher at Stockholm International Peace Research institutes.
Deliveries to Ukraine included artillery shells of Eastern military-standard calibers, such as 152mm howitzer shells and 122mm rockets, which are not manufactured by Western companies, officials and companies said.
They said Ukraine acquired arms and equipment through donations from governments and direct trade deals between Kyiv and the manufacturers.
Balkan weapons in Ukrainian hands strike a chord with the Kremlin
While some European countries are eager to supply arms and ammunition to Ukraine, others are more hesitant but increasingly committed.
Several arms manufacturers in the Western Balkans have also been implicated in exporting their own goods to Ukraine since February, but the details have been kept under wraps, unlike in central and eastern Europe.
All countries in the region have long experience of using Eastern Doctrine weapons, having been under socialist and communist governments during the Cold War, Vuk Vuksanović, senior researcher at the Belgrade Center for Security Policy, told Euronews.
“There is an obvious need for socialist and Soviet-style weapons that are only available in Eastern Europe, and these stocks are largely depleted as a result of Ukraine’s high-intensity warfare,” Vuksanović said.
“This creates the need to switch to Western-style weapons, which is always a difficult process even in peacetime.”
“Nevertheless, there is still a hunt for potential suppliers who can supply (these types of) weapons to Ukraine,” he said.
Although the Socialist Federal Republic of Yugoslavia was not behind the Iron Curtain, it was known for producing weapons – both licensed copies of Soviet and its own variants – and exporting them, mainly to African countries.
After the breakup of Yugoslavia in the 1990s, its former member states have continued to produce these weapons ever since, developing new ones to the same standards.
Others like Albania were also privy to Soviet and Chinese military technology as communist dictator Enver Hoxha switched alliances until the country was completely isolated – but arms production never stopped.
Albania, now a NATO member country, has confirmed his deployment Military aid to Ukraine the domestic information agency Faktoye reported back in June.
On August 21, four Czechs, two Russians and one Ukrainian were arrested in two separate incidents with alleged espionage of ammunition factories and weapons depots in southern Albania.
The Czechs were released, while the Russian-Ukrainian trio was tried for taking photos of the Poliçan facility. The three are also said to have injured two military guards with pepper spray while attempting to evade authorities.
The latter incident was believed to be related to the planned restart of the Poliçan factory’s production of Eastern-standard ammunition, considered a rare supply in other parts of Europe.
In July, a Ukrainian cargo plane carrying munitions exports to Africa crashed in Greece. Serbian authorities have denied that the shipment was destined for Ukraine, stating that the ammunition was purchased from and delivered to the Bangladesh Army.
Last week, video shared on social media showed Ukrainian forces unpacking a mortar launcher with markings suggesting it was made in Novi Travnik, Bosnia and Herzegovina.
The regional government of the Federation of BiH (FBiH) is the majority shareholder of the BNT company. Neither BNT nor the entity’s authorities have commented on the footage.
According to a Bosnian newspaper Slobodna Bosna, citing reports on the Arms Trade Treaty (ATT), BNT achieved sales of 32.2 million euros in 2021. The third largest customer was the Czech Republic with purchases of almost €3.5 million.
The motives in the Western Balkans for withholding potential sales to Ukraine could be very different, explained Vuksanović.
“For example, some of them want to curry favor with the US and, in line with that, supply weapons compatible with old Soviet standards.”
“At the same time, one shouldn’t discount the good, old-fashioned desire of local arms dealers to simply accumulate profits,” he said.
But the weapons from the Balkan countries in the arms of the Ukrainians must have struck a chord with the Kremlin.
Claims by figures such as Russian Foreign Minister Sergei Lavrov and President Vladimir Putin that Ukraine has “recruited mercenaries from Bosnia, Albania and Kosovo” – while weapons donated from the West have found their way onto the countries’ black markets – were fired labeled as “blatant lies” and Russian propaganda by officials in the region and the international community.
“Boost unseen in 30 years”
“The Eastern European countries support Ukraine significantly,” said Christoph Trebesch, Professor at the IfW Kiel. “At the same time, it is an opportunity for them to build up their military manufacturing industry.”
Ukraine has received nearly 50 billion Czech korunas ($2 billion) in arms and equipment from domestic companies, about 95% of which were commercial supplies, Czech Deputy Defense Minister Tomas Kopecny told Portal.
Czech arms exports this year will be the highest since 1989, he said, as many companies in the industry create jobs and capacity.
“For the Czech defense industry, the conflict in Ukraine and the aid it offers is clearly a boost that we haven’t seen in the last 30 years,” Kopecny said.
David Hac, CEO of the Czech STV Group, outlined plans to add new production lines for small caliber ammunition and said it was considering expanding its large caliber capabilities.
In a tight job market, the company is trying to poach workers from a flagging auto industry, he said.
Defense sales helped the Czechoslovak group, which includes companies such as Excalibur Army, Tatra Trucks and Tatra Defense, nearly double its first-half sales from a year earlier to 13.8 billion kroner (566 million euros).
The company is increasing production of both 155mm NATO and 152mm Eastern rounds and is overhauling Soviet-era infantry fighting vehicles and T-72 tanks, spokesman Andrei Cirtek told Portal.
He said supplying Ukraine is more than just a good deal.
“After the start of Russian aggression, our supplies to the Ukrainian army have multiplied,” Cirtek said.
“The majority of the Czech population still remembers the times of the (Soviet) occupation of our country before 1990 and we don’t want Russian troops closer to our borders.”