Ukraine holds an estimated $25 billion to $40 billion in defense-related production capacity that sits idle for lack of capital investment. At the same time, European companies are spending heavily to develop from scratch the very technologies that Ukrainian manufacturers already produce and field-test daily. The mismatch, argue Elina Ribakova and Lucas Risinger in Foreign Affairs, represents one of the most significant missed opportunities in European defense.
With the right capital infusion from European companies, Ukraine can help strengthen Europe's deterrence against Russia without detracting from its own war effort, the authors write, as "Hvylya" reports. Some joint ventures have already begun production. In Denmark, Fire Point - the Ukrainian firm behind the FP-5 Flamingo long-range missile capable of reaching targets 1,800 miles away - is set to begin rocket fuel production in 2026. In Germany, Quantum Systems is co-producing Ukrainian drones. In Britain, the Ukrainian firm Ukrspecsystems is opening a drone factory in Suffolk.
But these are exceptions, not the rule. Both sides are open to cooperation, yet regulatory barriers and misaligned incentives have gotten in the way. Ukraine has had an effective export ban on defense products since the Russian invasion. In January, the government took initial steps to relax those restrictions, and President Volodymyr Zelensky has announced plans to open ten defense export centers across Europe by the end of the year.
Removing export controls alone will not produce a surge in joint ventures, the authors caution. European governments should offer procurement guarantees, insurance backstops, and tax incentives to make joint ventures attractive for private firms. Denmark has shown the way by vetting Ukrainian firms, expediting approvals through dedicated legislation, and directly funding procurement contracts - creating regulatory and financial certainty where others have offered only political declarations.
The continent can also better incorporate Ukrainian expertise into NATO training. The Joint Analysis Training and Education Center in Poland - NATO's dedicated hub for applying lessons from the Ukraine war - is hobbled by restrictions on information-sharing. Ribakova and Risinger argue that Ukrainian senior officers should be embedded in joint exercises as participants, not just observers, which would require loosening the classification rules that currently prevent a proper exchange of information.
Also read: How defense spending priorities in one theater weaken deterrence globally.