Diplomacy
War in Ukraine revives global arms industry
Russia-Ukraine war continues to make global arms industry giants earn money, especially the U.S. and Europe. Strong arms companies, particularly in Europe, aim to increase their production capacity to be able to keep up with the orders.
The famous British company BAE Systems, for example, decided to restart the discontinued production of M777 howitzer, which had succeeded in the war. According to the BAE, Central European countries are interested in M777. The company’s vice president, Mark Signorelli, added that they need order of at least 150 new M777 to start production again.
U.S. military approval is expected to start reproduction. New orders are also coming in for American HIMARS and Anglo-Swedish co-made NLAW portable anti-tank missiles.
U.S. based usual suspects Raytheon Technologies, Lockheed Martin and L3Harris Technologies are also winners of the war. L3Harris received an order worth $200 million to be sent to Ukraine. Raytheon has started using obsolete parts from the old Stingers and has called his retired staff back into office to increase production. Lockheed Martin doubled the production of Javelin anti-tank missiles and increased the production of HIMARS rocket launchers and GMLRS missiles by 60 per cent.
The war ‘relieves’ German Industry
Struggling German industry due to the cutting of cheap Russian gas, has been given a consolation called war. Germany’s automotive and defence company and one of Europe’s leading arms manufacturers Rheinmetall AG, acquired the Spanish explosive manufacturing company Expal for 1.2 billion euros. Armin Papperger, CEO of the company, said the customers will sign contracts with companies who have the capacity. According to Rheinmetall, Expal expected sales of around 400 million euros in 2023.
Rheinmetall shares have gained 115 per cent since January 1st. The company announced that it has increased tank ammunition manufacturing from 70,000 to 140,000 in one year. Rheinmetall, which also increased its cannon production from 70,000 to 110,000, also doubled its mortar production capacity. Papperger noted that they increased their potential medium-calibre ball production capacity from 1.2 million to 2.2 million annually and increased their capacity to produce military trucks from 2,500 to 4,000.
Rohde & Schwarz, who developed German military communication equipment other than Rheinmetall, Traton of Volkswagen, who developed military vehicles together with Rheinmetall, and Krauss-Maffei Wegmann (KMW), the manufacturer of Leopard 2 tanks, are also struggling to fulfil orders.
The German government had recently ordered 100 Panzerhaubitze 2000 self-propelled howitzer to be sent to Ukraine. KMW will be responsible for their production. The contract is said to be worth 1.7 billion euros. These howitzers have recently become a hot topic in the German media, claiming that they are the subject of a complaint in Ukraine because of their maintenance.
KNDS, the joint venture between KMW and France’s Nexter says governments should shape new arms contracts. KNDS CEO Frank Haun underlines that they cannot risk increasing capacity with just speeches and announcements.
The German government’s rearmament programme is also an incentive for its struggling economy. Carl Jonasson, CEO of Snigel Design, a Swedish maker of military gear, did not hide the fact that he was surprised by the size of the order they received from Germany in May.
Eastern and Central Europe find new export markets
In addition to German armament manufacturers, the war industry of the former Warsaw Pact countries has also achieved a significant market with the Ukrainian war.
Sebastian Chwalek, CEO of PGZ, the state-owned weapons and ammo consortium in Poland, said they have an important opportunity to enter new markets and increase export revenues in the coming years. The PGZ consortium controls over 50 companies, from weapons to shipping.
PGZ plans to invest 1.75 billion euros in the next decade, Chwalek told Reuters. That’s more than double its pre-war investment plan. The new production facilities will be built away from the border with Russia’s ally Belarus for security reasons, he said.
In 2023, Chwalek announced that they had reached the capacity to produce 1000 pieces of Piorun MANPAD systems. This figure was 600 in 2022 and 300 to 350 in previous years. The company’s pre-war 2022 revenue target was 1.43 billion euros. With the new situation, it is thought that this income will be much higher at the end of the year.
Czechia is also one of the countries that put the arms industry at the service of war in Ukraine. Prague has sold 2 billion euros of weapons and equipment to Kyiv, Czech Deputy Defence Minister Tomas Kopecny told Reuters. Czechia (then Czechoslovakia), the largest weapons producer after the USSR during the socialist bloc period, has realized its highest arms export since 1989.
David Hac, chief executive of Czech STV Group, the largest ammunition producer in Czechia, said that they would create new production lines for small-calibre ammunition and that they were considering expanding its large-calibre capability. Considering the tight labour market, Hajj added, they are trying to get new workers from a slowing automotive industry.
Another Czech war giant, the Czechoslovak Group, nearly doubled its revenues in the first half of 2022 compared to the same period of the previous year. The Group’s spokesman, Andrej Cirtek, said their sales to the Ukrainian army multiplied after the war in Ukraine started.
Surprise attack from South Korea
South Korea, which has become the world’s fourth largest arms exporter, is also one of the winners of the Ukrainian war. The K2 tanks developed by ROTEM, an affiliate of the Hyundai-Kia Automotive Group, are already targeted by many countries from Mexico to Qatar.
Although Seoul has declared that it will not provide lethal aid to Ukraine directly, it is reported that the United States wants to buy ammunition from Korea to send to Ukraine. When details of the deal surfaced in the Wall Street Journal, the South Korean Defence Ministry insisted that they believed the U.S. was the ammunition’s end user.
Despite all these statements, South Korea’s relation with the Ukrainian war is not new. Last September, South Korea inked the largest arms agreement with Poland in its history to supply 1,000 K2 tanks, more than 600 Hanwha K9 self-propelled howitzers and dozens of combat aircraft to Warsaw. This deal will help Poland to send more weapons to Ukraine.
Customers of Hanwha K9 howitzers include Finland, India, Norway, Estonia, Australia, Egypt, and Turkey.
Limits of the arms industry
Under threat of deindustrialisation, the consolation that Europe found in war has its limits. The defence industry’s renaissance may begin to descend again due to the rising cost of materials and energy and dependence on imports from third countries.
Most of the raw materials needed to produce military products are not mined or are mined in limited amounts in EU countries, Jiří Hynek, head of the Association for Weapons and Defence Industry of the Czech Republic, told EURACTIV. Hynek underlined that most of the crucial materials are imported from Asian and African countries.
The materials that are in short supply on the market today are: all packaging materials, many chemicals but also the cellulose required for manufacturing gunpowder, and synthetic rubber, whose prices are astronomical, Hynek said. The latest material is used for ballistic resistant vests, and the EU is dependent on Asia, especially China, for this substance.
The price of steel has gone from 700 euros per tonne to 3500 euros, while aluminium has risen from 5 euros per kilo to 15 euros, according to Paolo Può, president of the Italian military shipbuilder Cantiere Navale Vittoria. Noting that most of their contracts are signed with the state, Può added that they are asking the government for intervention in the sector.
Rheinmetall also announced that they are stockpiling raw materials. The German arms manufacturer said that they purchased aluminium and important plastics in the first place, adding that they also obtained semiconductors to avoid supply problems in the medium term. The company also mentioned they have significantly increased working capital this year.
In France, on the other hand, the war industry has been experiencing production difficulties since before the Ukrainian war due to the semiconductor and chip problems.
Diplomacy
CSTO strips Armenia of voting rights over two-year budget debt
Members of the Collective Security Treaty Organization (CSTO) have stripped Armenia of its voting rights and its ability to appoint representatives to official positions due to a two-year debt to the organization’s budget.
Kremlin Spokesman Dmitry Peskov said, “This decision was taken based on the organization’s charter due to Armenia’s failure to fulfil its obligations for several years.”
Prior to the CSTO leaders’ summit in Moscow, Peskov had stated that member states would “react” to the Caucasus country’s non-participation in the organization’s activities.
Ahead of the Moscow summit, Armenian Prime Minister Nikol Pashinyan said his country’s “interest has run out” regarding the CSTO. Through his press spokesperson, he announced that he would travel to Türkiye on 11 November to attend the United Nations Climate Change Conference (COP31) instead of going to Russia.
The CSTO leaders’ meeting was held with the participation of Russian President Vladimir Putin alongside the leaders of Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan.
The leaders jointly took the decision to revoke Armenia’s voting rights.
At the conclusion of the meeting, the participants also signed a joint declaration.
The declaration stated: “We confirm our unconditional commitment to the goals set out in the CSTO treaty and charter towards creating favourable and stable conditions for the comprehensive development of member states.”
Pashinyan had frozen Yerevan’s de facto participation in the CSTO in February 2024, citing the organization’s failure to aid the Armenian side during the armed clashes in Nagorno-Karabakh in September 2023.
Having referred to the CSTO as a “soap-bubble alliance” since that time, Pashinyan accused the organization’s members of “planning war” together with Baku. He stated that Armenia would not return to active work within the alliance at least “over the next five years”, adding that he would welcome it if the country were expelled from membership.
Relations between Armenia and Russia grew tense once again in the spring of 2026, after Yerevan moved closer to the European Union (EU) and the Kremlin responded with a trade war.
In May, Pashinyan refused to travel to Moscow to attend the Victory Day parade and declared that he did not support Russia on the Ukraine issue.
In response, Putin called on Yerevan to determine its foreign policy course through a referendum, advising Armenian authorities not to forget the fate of Ukraine.
Diplomacy
US urges Russia to draft proposals for new European security pact
The US administration has reportedly called on Russia to submit proposals for a prospective security treaty with Europe that would include measures to ease tensions between European nations and Moscow.
According to a report by news site Axios citing sources familiar with the matter, the US side conveyed the request during trilateral negotiations held in Abu Dhabi.
During the talks, US Special Envoy Steve Witkoff and Donald Trump’s son-in-law Jared Kushner suggested that the Russian delegation prepare a fresh proposal outlining its security concerns and demands.
The US delegation reportedly asked that this proposal clarify what kind of “symmetrical steps” Moscow is prepared to take to de-escalate tensions and “provide non-aggression guarantees to Europe”.
Another source familiar with the White House’s approach said the Trump administration aims to run the processes for a new European security architecture and a peace agreement between Russia and Ukraine simultaneously.
Under this plan, the actual implementation of the security understandings would take effect only after the signing of an accord ending the conflict in Ukraine.
Assessing the approach to the process, the source said: “[Ukrainian President Volodymyr] Zelenskyy will not agree to any compromise without knowing what will happen next regarding security guarantees. Putin also wants to see the exact same picture clearly. This is precisely why the security portfolio is so decisive.”
The same official noted that the US will not reach a security agreement with Russia without the support of Europe and Ukraine, adding that Washington will not grant Moscow veto power over European security decisions.
Vladimir Medinsky, aide to the Russian president and head of the delegation in the Ukraine negotiations, previously stated that the fundamental objective was building a comprehensive new security system in Europe.
Medinsky noted that the structure in question must take on the character of “a fair, new, modern Yalta and Potsdam that carries the spirit of Helsinki 1975 and responds to contemporary realities”.
The Russian official argued that if such a system were established, peace lasting for decades, or even centuries, could be secured in Europe.
Russian Foreign Minister Sergey Lavrov also announced that Moscow possesses its own position paper on how a new security architecture in Eurasia should take shape.
Lavrov stated that Russia hopes the Washington administration will “maintain its determination to pursue dialogue aimed at achieving an honest balance of interests where nobody’s security is impaired”.
Russian authorities have repeatedly stated that the country has no intention of attacking Europe.
Pointing out that they have no reason to fight NATO countries, Russian President Vladimir Putin previously said: “We have no interest whatsoever, neither geopolitical nor economic, political nor military.”
In a statement in October, Putin said Russia has no plans to attack anyone “in 2029, in 2030, or in the year 2050”.
On the other hand, Putin claimed that “all NATO countries are fighting Russia” and stated that the Russian military is currently the most combat-ready armed force in the world.
Following the contacts in Abu Dhabi, Kushner announced that he and Witkoff would travel to Moscow.
Explaining that they plan to meet Putin during the visit to discuss European participation in negotiations aimed at resolving the conflict, Kushner argued that the parties could make “far greater progress” if the Russian leader consents to such involvement.
Yury Ushakov, aide to the Russian president, stated that the US special envoys will arrive in Moscow on 12 November, with the planned meeting with the Russian president scheduled for the first half of the day.
Diplomacy
Vance leads indirect push for US-Iran ceasefire and nuclear talks
US Vice-President JD Vance has been personally involved over the past two weeks in indirect talks with Iran aimed at securing a fresh ceasefire and restarting nuclear negotiations.
According to Axios, Vance’s intense engagement indicates that he has taken it upon himself to extract the US from the conflict, which he views as responsible for the Republican Party’s shocking losses in this week’s elections.
This elevates the latest round of indirect talks to the highest echelons of the administration.
US officials and regional sources state that Trump is currently willing to let diplomatic efforts run their course to see whether any agreement is achievable.
Asked by reporters on Friday what his message was to Iran, Trump said, “We are talking to them.”
According to sources with direct knowledge of the matter, Vance speaks almost daily with Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani, Pakistan’s Chief of Army Staff Field Marshal Asim Munir, and other mediators regarding the negotiations with Iran.
White House envoy Steve Witkoff and Jared Kushner, President Trump’s adviser and son-in-law, are also involved in the process.
Sources say Vance and the Qatari and Pakistani mediators have been discussing the possibility of holding a working-level technical meeting between the US and Iran in the coming days, though this has not yet materialized.
Before the war began in late February, Vance was among the most sceptical voices in Trump’s inner circle on the issue, advocating instead for a diplomatic solution.
In April, he led the US negotiating delegation at the Iran summit held in Islamabad and was personally involved in the talks that yielded a memorandum of understanding (MOU) signed between the US and Iran in June.
Vance subsequently headed the US delegation during a series of direct talks with Iran in Switzerland.
Two weeks ago, Vance sent a letter to Mohsen Rezaei, Secretary of Iran’s Supreme National Security Council, proposing that direct negotiations resume.
Rezaei is one of the closest advisers to Iran’s Supreme Leader, Mojtaba Khamenei.
Iranian officials noted that Vance’s letter generated positive momentum toward restarting talks.
On Wednesday, Vance said the war was the primary reason for the Republicans’ repudiation at the polls.
Sources involved in mediation efforts report that while progress is being made, the process is moving very slowly.
On Friday evening, the prime minister of Qatar said, “Over the past few weeks, we worked with our colleagues in the US administration who have a sincere intention to contain the situation and de-escalate. Thanks to them and the voices of reason in Tehran, we prevented the situation from spinning out of control.”
The prime minister added that discussions with the Trump administration continued following the midterm elections, though they were not as active as in previous days “because there are other matters.”
Nevertheless, he noted that the US intention to find a diplomatic resolution “remains ongoing” and emphasized that an agreement is possible.
On Friday morning, Trump and the Emir of Qatar discussed Qatari efforts to bridge differences between the US and Iran as part of an accord.
According to a statement from his office, Sheikh Tamim emphasized the necessity of “pursuing dialogue and diplomatic channels to resolve differences, prevent the region from facing further escalation, and ensure freedom of maritime navigation as well as the security of energy supplies.”
Separately, Trump confirmed on Friday that the US military conducted a strike on an anti-aircraft missile launcher on Qeshm Island in the Strait of Hormuz after it fired a missile at a US fighter jet.
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