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17 Dec 25. DIP – Sir Keir Starmer has asked military chiefs to rework aspects of the defence investment plan with the paper now expected to be delayed until 2026. (Source: FT.com)
17 Dec 25. Lithuania eyes state defense holding to steer all weapons needs. Lithuania is gearing towards record-high defense spending next year, and with major procurements of tanks, infantry fighting vehicles and other gear in the pipeline, the country is advancing plans to establish a state-owned defense holding for coordinating the manufacturing activities for weapons, equipment and ammunition. Vilnius is currently positioning local energy company EPSO-G as the backbone of Lithuania’s future defense industry, involving it in partnerships with foreign suppliers of technology. The company is to take over a 25.1% stake in Lithuania Defense Services, a joint venture established by KNDS Deutschland and Rheinmetall Landsysteme to assemble 44 Leopard 2A8 tanks for the country’s land forces. The facility where the tanks will be assembled is to be constructed in Kaunas, in the country’s central part, under an investment worth an estimated €50 m ($59 m). The plant will also handle their maintenance, repairs and servicing in the future. As Lithuania is readying to acquire 100 CV90 infantry fighting vehicles, it is likely EPSO-G will also take part in the procurement of BAE Systems Hägglunds’ product. On Dec. 15 the Lithuanian Ministry of National Defence said the decision to purchase 100 CV90s “was approved by the State Defence Council with a particular focus on commitment to production of technical components and CV90 MkIV maintenance service here in Lithuania to be included in subsequent acquisition contracts.” The Baltic State is advancing the acquisition alongside Estonia, Finland, the Netherlands, Norway and Sweden. A spokesperson for the National Defence Ministry told Defense News: “Lithuania aims to integrate domestic enterprises into the CV90 supply chain and assembly process, including plans for a significant portion of the vehicles to be assembled in Lithuania as part of the broader joint procurement. This industrial involvement is intended to create sustainable local participation in production and support services.” Under the plan, CV90 deliveries to Lithuania and other program participants are to begin in 2028, according to the ministry. The purchased Leopard 2A8 tanks are to be supplied to Vilnius between 2028 and 2030. The two types of tracked vehicles are set to become part of the Lithuanian Army’s new Infantry Division consisting of two battalions. Through its subsidiary EPSO-G Invest, the energy group is also involved in the project to launch a 155mm artillery ammunition factory in the Baltic State. The plant will be jointly owned by Rheinmetall, EPSO-G and Lithuanian state-owned ammunition producer AB Giraitės Ginkluotės Gamykla. The investment is expected to be worth at least €260 m. Giedrimas Jeglinskas, an opposition lawmaker and a member of the Foreign Affairs Committee of the Lithuanian parliament, told Defense News that increasing the country’s military expenditure to almost 5.4% of its GDP in 2026, or close to €4.8 bn, represents a cross-party consensus. The need to establish a state-owned defense holding that will represent the state in major procurements such as the Leopard 2A8 and CV90 purchases is also acknowledged across Lithuania’s political spectrum, he said.
“One way is to use EPSO-G as a core bone of this new structure behind the state holding, and then put further elements around it. For strategic defense investments, we require state funds, but also private capital,” said Jeglinskas, who represents the Union of Democrats for Lithuania. “We need the defense holding to be part of a system that works, acting as a co-owner of defense assets, factories that will produce both for Lithuania and for international sales.”
Last month, the Lithuanian Ministry of Finance set up a working group that is to coordinate strategic defense industry projects. In addition to a number of government entities, representatives of EPSO-G and AB Giraitės Ginkluotės Gamykla were also invited to the panel. The finance ministry said in a statement the group’s formation represents “the first step in the implementation of paragraph 322 of the Government Programme which provides for the establishment of a state-controlled defense industry holding company.” However, the country’s opposition believes that, as Lithuania’s neighbor Russia continues its invasion of Ukraine, the Baltic state has little time to lose in developing its defense industry, and the incumbent Cabinet should accelerate its efforts.
“One of the disappointing actions of the current government is that they announced they want to execute the creation of the state holding by the end of 2028, which is too late,” Jeglinskas said. “Defense and security must remain the top priority for both the government and the opposition of which I’m part of.” (Source: Defense News)
17 Dec 25. German budget committee clears 50bn euros in defence contracts. Germany’s parliamentary budget committee on Wednesday cleared more than 50bn euros ($58.60bn) in defence contracts over the next few years, as Russia’s war in Ukraine puts pressure on the nation to boost its military spending. Speaking to media in Berlin, Defence Minister Boris Pistorius said the decision put the government and parliament on track to meet ambitious defence commitments. The package, the largest to date for Germany’s armed forces, includes uniforms, tanks, drones and satellites. The following are projects covered by the plan, according to lawmakers on the committee:
- About 21bn euros for military clothing and personal equipment for up to 460,000 soldiers and 80,000 civilian staff.
- An order worth 4.2bn euros to increase the fleet of Puma armoured fighting vehicles by 200, including simulation systems for training
- About 1.5bn euros for eight remotely-piloted aircraft known as MQ-9B SeaGuardian to spot submarines, using NATO’s Support and Procurement Agency
- Some 1.55bn euros to expand the Patriot air defence system
- About 1.76bn euros for a satellite surveillance system known as SPOCK to help a German tank brigade deployed in Lithuania
- Some 1.3bn euros for the Iris-T SLM ground-based air defence system, using guided missiles
- About 450m euros to upgrade the Taurus missile system ($1 = 0.8532 euros) (Source: Reuters)
17 Dec 25. Italy plans 2.4bn euros investment in frigates, document shows. Italy’s government has asked parliament to approve a 2.4bn-euro ($2.82bn) investment over 15 years for the maintenance and modernisation of its frigate fleet, a parliamentary document seen by Reuters showed. The plan comes as Italy moves to gradually increase its defence spending to comply with higher NATO targets, after the alliance members agreed to a U.S. demand to boost their annual defence budgets to 5% of gross domestic product. The programme, to 2039, is aimed at “the maintenance of operational conditions and logistical support” as well as the so-called ‘mid-life upgrade’ of FREMM-type frigate naval units, the document said. It stressed the need to ensure Italy continues to operate vessels capable of effectively monitoring maritime areas of national interest. FREMM frigates are multi-purpose warships jointly designed by Italy’s Fincantieri (FCT.MI), and France’s Naval Group. Last year, the shipbuilding joint venture, along with defence group Leonardo (LDOF.MI), won a contract worth about 1.5 bn euros to build two frigates for Rome. The document noted that cooperation with industry is expected to continue under existing arrangements, including through the European procurement agency OCCAR (Organisation for Joint Armament Co-operation). The new investment will be funded by both the Italian industry and defence ministries. The programme is described as “vital” and delivering “clear benefits in one of the sectors of highest strategic value for defence.” Parliament’s defence committees must approve the request by January 12, according to the lower house website. Other spending plans submitted to parliament involve drones, submarines and remotely piloted aircraft for the airforce. Opposition parties have criticised the government’s new defence spending plans – worth more than 3bn euros – arguing they were being pushed through despite an inadequate investment by the government in the country’s social services. “This seems to me like a real slap in the face of Italian families. A truly unpalatable Christmas gift,” Nicola Fratoianni, a lawmaker from the Green-Left Alliance party said on Tuesday. ($1 = 0.8498 euros) (Source: Reuters)
17 Dec 25. FCAS fighter jet “very unlikely” after ministers’ talks, source says. A meeting between the French, German and Spanish defence ministers last week failed to yield a breakthrough rescuing the troubled French-German-Spanish FCAS warplane programme, three people familiar with the matter said on Tuesday. The 100bn-euro-project project under which the three countries would jointly build a fifth-generation fighter jet to replace France’s Rafales and Germany and Spain’s Eurofighters was now “very unlikely”, one of the sources added. The sources said France was hoping to postpone into next year a decision Germany had hoped to see finalised by the end of 2025. An announcement that the project would be advanced to the next stage had previously been pencilled in for this week’s meeting of EU government heads in Brussels. Two further industry sources also said they expected talks on the programme’s next phase to slip into 2026 since there was nothing to be gained from having a public dispute now. The French and German defence ministries did not immediately comment on the matter. The three countries had also struggled to reach an agreement on the “combat cloud” and drone systems that are envisaged as part of the FCAS programme, which was intended to replace the existing fourth-generation fighters by 2040. At the core of the dispute is the desire of French military contractor Dassault (AM.PA) to take a leading role in the project ahead of Airbus (AIR.PA), the German partner – a position Germany regards as untenable, the sources said. One difficulty is that the two countries need the warplanes for different roles. France needs aircraft capable of carrying nuclear warheads and interoperating with its aircraft carrier, while Germany, which has no aircraft carriers, has already agreed to buy U.S. F-35 warplanes to carry NATO’s nuclear warheads. Earlier on Tuesday, the head of Dassault raised doubts over the future of the programme, saying it depended on whether Germany was willing to rethink its reliance on U.S. arms imports. (Source: Reuters)
17 Dec 25. European drone wall, other ‘flagship’ defence projects at risk in EU power struggle. The future of proposed EU “flagship” defence projects – including a counter-drone system initially called a drone wall – is in doubt as European Union leaders plan to snub a call to endorse them at a summit in Brussels next week. The plans are at the centre of a power struggle between the European Commission – which proposed them – and some national governments, which argue big defence projects are primarily a matter for them and the NATO military alliance, not for the EU’s executive body. EU heavyweights such as Germany, France and Italy – which have large defence industries and arms procurement departments – have made clear they prefer to work in coalitions to develop defence capabilities rather than on Commission-proposed projects. One EU diplomat said there was “clear scepticism” about the flagship idea but it was too soon to say whether it would survive – a view echoed by several other diplomats. Northern and eastern European countries aim to keep the projects alive by voicing support for them at a meeting of leaders from the bloc’s eastern flank in Helsinki on Tuesday, two days before the Brussels summit, diplomats say. The Commission proposed four flagship projects in October as part of a “roadmap” to get Europe ready to defend itself by 2030, reflecting growing concern over Russia after its 2022 invasion of Ukraine and doubts about U.S. commitments to European security under President Donald Trump. The projects comprise a European Drone Defence Initiative, originally called a drone wall, an Eastern Flank Watch to fortify the bloc’s eastern borders, a European Air Shield and a European Space Shield. The Commission roadmap called for EU leaders to endorse the flagships by the end of this year. But a first and second draft of conclusions for Thursday’s EU summit seen by Reuters – the latest dated Friday – contain no such endorsement. An item can only be included in the summit conclusions with the unanimous approval of all 27 EU leaders, which seems unlikely at this stage. That would leave the flagships in limbo – neither approved nor rejected by the leaders.
“The word ‘flagships’ is not mentioned because some member states are against the idea,” said an EU official, speaking on condition of anonymity. “However, some others want to proceed with them.”
The European Commission said it would “keep working with our member states to turn the European Flagships into reality because they are essential for Europe’s readiness by 2030”.
DRONE WALL ATTRACTED ATTENTION AFTER INCURSIONS
The drone wall proposal attracted widespread public and political attention following the incursion of some 20 Russian drones into Poland in September and a spate of other drone incidents in countries including Romania, Denmark and Germany. The Commission said the project would consist of a network of sensors, jamming systems and weapons to defeat drones. But EU members are also forming coalitions of countries to work on filling gaps in Europe’s defence capabilities, separately from the flagship proposals. Under that model, EU countries would jointly develop and procure anti-drone systems, for example, rather than work on a Commission-proposed flagship.
“The actual work will be done by member states,” predicted a second EU official.
The Commission proposed that flagships could be designated as European Defence Projects of Common Interest, making them eligible for EU funding. But officials said the coalitions of countries could also propose projects of common interest, and EU governments would ultimately decide on EU funding. The initial drone wall proposal ran into resistance from southern and western European countries, who said it was too focused on eastern Europe when drones posed a security challenge right across the continent. The Commission revamped the plan into a pan-European network, but some governments remained sceptical about the EU taking such an initiative. (Source: Reuters)
12 Dec 25. Estonia erects first of 600-strong Baltic bunker wall on Russia border. Estonia has begun installing the first concrete bunkers along its southeastern border with Russia as part of the Baltic Defense Line, marking a key milestone for the trilateral fortification project despite delays. Seven bunkers were awaiting installation as of this week, with Estonian officials targeting 28 bunkers in the ground by year’s end, according to Krismar Rosin, press officer for the Estonian Centre for Defence Investments. The initial batch represents the first phase of a 600-bunker network designed to strengthen the European Union’s and NATO’s eastern flank. In an interview with Defense News, Rosin acknowledged the timeline remains uncertain. The bunkers are being deployed in Setomaa municipality and southeastern Estonia, with 27 situated on government or municipal land and only one on private property. The deployment comes a year later than originally planned, following procurement complications that forced Estonian officials to restructure their approach. An initial tender for all 600 bunkers received bids exceeding legal cost limits because construction companies couldn’t accurately assess installation challenges without knowing the exact locations, which defense officials kept confidential for operational security, Rosin said.
“Since those companies did not know … does it have a boggy terrain, does it have some kind of forest terrain, how is the access – they offered very expensive bids,” Rosin explained.
Estonian officials solved the problem by scaling back to a 28-bunker pilot program and revealing approximate locations to bidders to obtain realistic cost estimates while gathering implementation lessons before the larger procurement. The remaining 572 bunkers are meant to be tendered by year’s end. As of Friday, Nov. 12, the bunkers were “currently being deployed but not yet fully ready,” the Estonian Center for Defense Investments said in an email. The bunkers, each approximately 35 square meters, are designed to withstand 152mm artillery shells. They represent one part of a layered defense system meant to stop a possible Russian invasion. All barbed wire and dragon’s teeth obstacles have been delivered and stored in pre-positioned areas awaiting installation if the need arises, Rosin said. Beyond procurement issues, the project faces coordination challenges requiring approval from multiple stakeholders, including the Estonian Defence Forces, Police and Border Guard, municipalities, and private landowners – all while adhering to peacetime environmental and safety regulations.
“We are building it in peacetime, which means that we have to follow the peacetime law,” Rosin said, contrasting this with wartime scenarios where military engineers could do things like digging anti-tank trenches “fast, within a few hours, probably.”
For instance, only 500 meters of a planned 3.4-kilometer test anti-tank trench has been completed, with additional construction delayed pending Border Guard approval, whose area of operations the test trench would cross through, said Rosin. Despite the setbacks, Estonia remains ahead of Latvia and Lithuania in physical implementation, according to Rosin. All three countries announced the coordinated Baltic Defense Line project, but are executing their national portions independently based on varying terrain and threat assessments, although they cooperate on concepts and knowledge-sharing. Estonia’s €60m ($70m) budget for the project – with approximately €30m spent to date – is significantly lower than Lithuanian and Latvian allocations, reflecting Estonia’s shorter border length and natural obstacles, including Lake Peipus and extensive bog areas. The Estonian project excludes air defense systems and advanced firepower that neighboring countries are incorporating. The Estonian Border Guard has already deployed a separate “drone wall” detection system along portions of the border, which is often confused with the Defence Forces’ Baltic Defense Line project but is a separate measure, Rosin said. (Source: Defense News)
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Founded in 1987, Exensor Technology is a world leading supplier of Networked Unattended Ground Sensor (UGS) Systems providing tailored sensor solutions to customers all over the world. From our Headquarters in Lund Sweden, our centre of expertise in Network Communications at Communications Research Lab in Kalmar Sweden and our Production site outside of Basingstoke UK, we design, develop and produce latest state of the art rugged UGS solutions at the highest quality to meet the most stringent demands of our customers. Our systems are in operation and used in a wide number of Military as well as Homeland Security applications worldwide. The modular nature of the system ensures any external sensor can be integrated, providing the user with a fully meshed “silent” network capable of self-healing. Exensor Technology will continue to lead the field in UGS technology, provide our customers with excellent customer service and a bespoke package able to meet every need.
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