This briefing was submitted to the Commission on Security and Cooperation in Europe, U. S. Helsinki Commission. Note: this is a rush transcript and may contain errors.

Europe is now moving beyond emergency assistance and toward the long-term integration of Ukraine into its defense-industrial ecosystem.

Early on in the war, European governments were focused on rapid response — on keeping Ukraine supplied from national stocks and emergency procurement. But what began in 2022 as a set of reactive crisis instruments is now starting to evolve into something more strategic.

Defense-industrial partnerships offer a path to move from episodic aid to structured rearmament of both Ukraine and Europe. Direct financing is highly valued in Ukraine because it gives Kyiv maximum flexibility and is responsive to immediate operational needs of the military. And in Europe, it is highly valued especially by those governments without a strong domestic defense industrial base.

Collaboration can create predictable and scalable ways of rebuilding Ukrainian military capacity, while embedding the country more deeply in European supply chains, and its broader innovation ecosystem.  The strategic logic behind this is straightforward. A capable and rearmed Ukraine is Europe’s first line of defense and strengthens deterrence against Russia. And industrial capacity is central to that goal: a Ukraine that can equip, repair, and sustain its own forces offers the most credible security guarantee.

Collaboration also aligns closely with Europe’s industrial self-interest. Working with Ukrainian defense players provides Western firms with operational insight and access to a combat-learning environment that is not available anywhere else in NATO.

This relevant beyond a potential ceasefire: Ukraine is set to remain a military and defense industrial powerhouse and first line of defense against Russia, and creating robust industrial cooperation pathways now will serve European security for years to come.

European MODs and EU institutions recognize the value of closer industrial ties with Ukraine, and the political will for greater integration is strong. On the ground, however, firms do still face regulatory ambiguity, financial constraints, administrative burdens, and of course security risks. These frictions have all slowed progress and have so far prevented Europe and Ukraine from realizing the full strategic payoff of cooperation.

That said, 2025 has been a breakthrough year, that began to unlock many of the most persistent restrictions to Europe-Ukraine defense industrial cooperation. There is real momentum building behind this effort now, and governments and firms in Europe are experimenting with several pathways for industrial cooperation.

The most prominent model of industrial support has been the direct financing model, or the Danish model, which we have already heard about in detail today. Let me just reiterate that this approach has become an extremely effective way to arm Ukraine while strengthening its defense-industrial base. Direct financing is highly valued in Ukraine because it gives Kyiv maximum flexibility and is responsive to immediate operational needs of the military. And in Europe, it is highly valued especially by those governments without a strong domestic defense industrial base.

We have seen some variations of the Danish model emerge recently, such as the Dutch model, which channels payments directly to Ukrainian manufacturers and is more focused on startups, whereas the Danish initiative has focused more on heavy equipment.

The main caveat, aside from the intense accountability burden, is that this remains a government-financed wartime instrument; so, unless the direct financing models evolve into longer-term industrial partnerships, they could end abruptly, which makes sustainable planning difficult.

A second pathway of collaboration is production and co-production inside Ukraine. We have seen some initiatives here — particularly in ammunition production and in maintenance, repair and overhaul of European donated equipment. The benefits are clear: production in Ukraine can lower costs, it can build up local knowledge and expertise, and, crucially, it brings capabilities much closer to the front.

Overall, however, collaboration inside Ukraine has fallen short of wartime requirements. European firms, particularly in the ammunition space, face financial constraints because Ukraine often cannot sustain higher-volume production. They also must contend with persistent security challenges, from Russian strikes on industrial facilities to the practical hazards of moving personnel and materiel in a warzone and the cost of war-risk insurance for European employees. And added to this are significant bureaucratic hurdles, a highly decentralized Ukrainian defense ecosystem, and frequently shifting capability requirements, which all complicate long-term planning.

Yet there are examples of smaller innovative European firms successfully navigating this, especially in the one sector that stands out as the most dynamic segment of defense-industrial partnership between Europe and Ukraine, which is the field of uncrewed platforms, drones, but also the broader electromagnetic warfare ecosystem.

Battlefield learning cycles in Ukraine, the speed of iteration, is extraordinarily fast. And European firms that fail to do learning on the ground increasingly find themselves unable to meet the emerging standards that are set by Ukrainian certification procedures.

Therefore, collaboration in this area is essential for European firms if they want to remain competitive. It is telling that military leaders from NATO’s frontline states will now routinely ask whether systems have been tested and proven in Ukraine rather than taking industry claims at face value.

For that reason, Ukraine has become a magnet for technology firms, drone firms and those providing enabling capabilities that are keen to learn more from Ukraine’s extremely successful model of civil military integration. And some European early-mover firms have already successfully built plants in Ukraine, hiring a local workforce and acquiring stakes in Ukrainian tech start-ups, often on their own initiative.

Ukrainian drone companies for their part are extraordinarily capable, but heavily capital-constrained. Many of them are operating far below capacity. To support them, Ukraine is now opening export facilitation offices in Berlin and in Copenhagen. The idea is to encourage not just the export of products, but also to encourage investment in Ukrainian production and joint facilities abroad. 

This leads me to the third and last pathway for collaboration that I wanted to discuss today — and potentially the most scalable – and that is joint production/ joint ventures on European NATO soil. Collaboration inside Europe provides far safer operating conditions and the ability for Ukrainian firms to scale in ways that may not be possible inside Ukraine during wartime.

This pathway is still new, but several Western partners have initiated first joint ventures. Denmark against stands out as a first mover under the Build-with-Ukraine initiative, they have recently helped a Ukrainian rocket and drone fuel firm establish operations domestically. The UK has recently launched a licensing deal for interceptor drones that will become the first Ukrainian combat system licensed for production in a NATO country. Others are set to follow.

Finally, let me just briefly discuss a very recent EU-level development, namely the EU’s new defense loan facility, SAFE.  SAFE is designed to mobilize large-scale investment in European defense production, and it explicitly allows and encourages participation by Ukrainian firms. Most of the recently published member-state plans already include provisions for Ukrainian involvement. If it is implemented effectively, SAFE could accelerate defense-industrial integration, though it will require navigating significant regulatory barriers to the European market.

We are now facing another inflection point for the war in Ukraine, with negotiations both over possible ceasefire and over the reparations loan based on Russian frozen assets ongoing. Quite apart from the results of these processes, for Europe, the logic is clear: Ukraine is its forward line of defense, and integrating Ukraine into Europe’s defense-industrial base is an investment in the continent’s long-term security.

This is a long-term project. It will require years of commitment and resources. But strengthening defense industrial partnership with Ukraine is how Europe turns today’s crisis response into lasting strategic advantage. 

Thank you.