During the Cold War, the arms industry played a pivotal role in the Soviet-led Warsaw Pact, with Central European countries serving as essential production hubs. The USSR’s centralized military-industrial complex expanded into these states, integrating their economies into a massive defence production network. Countries like Poland, Czechoslovakia (now the Czech Republic and Slovakia), Hungary, Romania, and Bulgaria specialized in producing specific military components. These countries were responsible for manufacturing tanks, aircraft, artillery, and small arms, supplying the Warsaw Pact’s vast military machine.
The arms industry’s revival underscores the enduring impact of geopolitical crises on regional security architectures. Central Europe’s evolving military-industrial complex is likely to play a decisive role in future European defence strategies, ensuring the region’s preparedness in an increasingly uncertain world
The collapse of the USSR in 1991 triggered significant political and economic transitions throughout Central Europe. The newly independent states reoriented their policies toward Western democratic and free-market models. The transition from state-controlled economies to market-driven systems severely affected military production, which had relied on state subsidies and guaranteed demand. Arms factories faced closure, restructuring, or privatization due to declining military budgets and the loss of Soviet-era contracts.
The focus on NATO integration further reshaped these countries’ defence industries. NATO membership required standardization with Western military specifications, prompting a shift from Soviet-era arms production to modernization programs driven by Western military technologies. The resulting challenges included adapting production lines, updating outdated technologies, and reducing excessive military stockpiles accumulated during the Cold War.
The Russian invasion of Ukraine in 2022 marked a turning point for Central Europe’s defence sector, reshaping regional security strategies. The war reawakened fears of Russian expansionism, perceived as an existential threat by many countries with historical experiences of Soviet domination. This led to a rapid reassessment of military readiness and defence production capabilities.
Central European countries became frontline supporters of Ukraine, supplying weapons, ammunition, and humanitarian aid. The need to sustain this assistance while ensuring national security prompted them to accelerate domestic arms production. Military expenditures surged as countries prioritized defence modernization and expanded production capacity, benefiting both economically and politically.
Poland emerged as a military powerhouse in Central Europe, leveraging its extensive arms industry to support Ukraine. The Polish Armaments Group (PGZ), the country’s largest defence conglomerate, played a crucial role by supplying tanks, artillery, and drones. This support significantly impacted the early stages of the war, helping Ukraine resist Russian advances.
PGZ recorded substantial revenue growth, attributed to increased government contracts and international deals. Its export portfolio expanded, including contracts for military vehicles, weapons systems, and ammunition. Key investments in research and development (R&D) allowed Poland to develop advanced weaponry, including self-propelled artillery systems, precision-guided munitions, and combat drones. Poland also strengthened international partnerships, notably with the USA and South Korea, securing technology transfers and joint production agreements. This strategic positioning transformed Poland into a key supplier within NATO’s defence infrastructure.
The Czech Republic’s historical legacy in arms manufacturing dates back to its Austro-Hungarian and Cold War-era production capabilities. As a top arms exporter during the Soviet era, the country maintained its defence industry infrastructure despite challenges following the Cold War. The war in Ukraine revitalized the Czech defence industry, particularly through arms exports to Ukraine. Czech arms manufacturers produced and supplied a wide range of military equipment, including artillery, armored vehicles, and ammunition.
In 2022, military exports doubled compared to the previous year, with Ukraine receiving nearly half of the total output. The Czech Republic also strengthened its logistical role by establishing maintenance and repair facilities near the conflict zone, ensuring a continuous flow of arms. This boosted military-industrial cooperation between Czech manufacturers and Ukrainian military forces, promising long-term partnerships.
Hungary adopted a cautious stance due to its political ties with Russia and its unique foreign policy within the EU and NATO. While refusing to allow arms shipments through its territory, Hungary continued its military modernization programme. The programme aimed to modernize Hungary’s military by acquiring advanced Western weaponry and developing domestic production capabilities.
A major milestone was Hungary’s partnership with Germany’s Rheinmetall, resulting in the construction of a modern arms production facility in Zalaegerszeg. The factory produces state-of-the-art infantry fighting vehicles and other advanced military systems for the Hungarian armed forces. Despite its limited involvement in supporting Ukraine, Hungary’s defence industry advanced technologically due to technology transfers from German partners. This long-term investment in military modernization positions Hungary as a potential defence hub in Central Europe.
Romania and Bulgaria pursued distinct strategies in response to the war. Romania focused on both foreign military procurement and developing its domestic arms industry. The Romanian government allocated a significant portion of its defence budget to modernizing air defence systems while investing in local production facilities. Plans to quadruple ammunition output reflect Romania’s ambition to become a key supplier of military equipment in the region. Bulgaria, with its established Soviet-era ammunition industry, saw a record surge in arms exports. Its production focused on supplying Soviet-caliber ammunition to Ukraine, filling a critical gap in the global arms market. Despite lacking a comprehensive defence modernization strategy, Bulgaria’s arms industry experienced unprecedented growth, driven by wartime demand.
Despite notable progress, Central Europe’s defence industry faces several challenges. The absence of a unified European defence policy has led to fragmented production lines. Countries operate independently, producing similar weapon systems without coordination, leading to inefficiencies.
While military budgets have increased, innovation and advanced R&D remain limited compared to global defence giants like the USA and China. Central Europe’s focus on upgrading Soviet-era technologies hampers cutting-edge development.
Many countries depend heavily on Western suppliers for high-tech components and advanced weapon systems. This reliance constrains efforts to achieve self-sufficiency in arms production. National policies can change due to shifting political alliances and economic pressures. Ensuring sustained investment in defence projects requires long-term policy stability.
The war in Ukraine has reinvigorated Central Europe’s defence industry, transforming it into a vital economic and strategic asset. Military production has become central to national security, aligning with broader European and transatlantic defence policies. Countries like Poland, the Czech Republic, and Romania have demonstrated the potential for defence-industrial growth through innovation, international cooperation, and government-backed modernization programs.
The arms industry’s revival underscores the enduring impact of geopolitical crises on regional security architectures. Central Europe’s evolving military-industrial complex is likely to play a decisive role in future European defence strategies, ensuring the region’s preparedness in an increasingly uncertain world.
