Construction

The defence and security environment in Central and Eastern Europe has changed dramatically over the past couple of years and several important new business opportunities have emerged. The defence sector opportunity is shaped by several key drivers, including the end of the Afghani mission, the Ukraine crisis, growing regional instability in the Middle East and continued defence integration within the EU & NATO.

Across Central and Eastern Europe, nations are seeking to adapt their armed forces to the new security and strategic situation and to the demands from the EU & NATO to modernise and harmonize programmes to achieve interoperability with other NATO countries. This includes purchase of ammunition, tactical communication and navigation systems.

After years of cuts, defence budgets are, in general, being increased. Poland plans to increase its defence budget up to 2% of GDP; while the Czech Republic seeks to increase spending from 1.08% GDP up to 1.4% in the near future; and Hungary proposes to add 0.1% of GDP to its budget annually. Six Central European countries have established a multinational defence co-operation or “MDC”, which includes the Czech Republic, Hungary, Slovakia and Slovenia. Adding to that, members of the V4 group have since strengthened their defensive alliance.

Central and Eastern European armed forces plan to replace old Soviet military heavy equipment with new solutions that are interoperable and suitable for modern warfare – including ground to air capabilities, multifunctional armoured vehicles and helicopters.

In both the public and private sector, there is increased potential for the sale of surveillance equipment, including camera systems, drones, radar systems and digitalization and information systems.