Lithuania connects to Europe’s rearmament industry Analysis by CEPA

CEPA has published an article saying Lithuania is accelerating new partnerships with industry heavyweights as it joins an emerging network of European arms-makers. Caliber.Az reprints the article.

Lithuania signed an investment agreement worth nearly $200m with Rheinmetall, a German arms company on June 3 for an ammunition plant to produce “tens of thousands of rounds” of NATO-standard 155mm artillery shells annually.

With countries scrambling to increase production for Ukraine and fill their own emptying stocks, it was good news for Vilnius, NATO, and Kyiv.  

The project was given the status of “state importance”, resulting in simplified procedures for planning, land procurement, and plant construction. With negotiations on the location still ongoing, the Lithuanian government expects the plant to start production by the end of 2025. 

This is the latest step in the frontline state’s effort to establish its role as a military production and servicing hub. The government in Vilnius is also in talks with the Italian arms manufacturer Leonardo about expanding to Lithuania, and the country has become an important center for military vehicle repairs.

The developments reflect a growing appetite for cooperation between Western nations as they race to step up production to meet the demands of the war in Ukraine and the increased threats from a belligerent Russia and expansionist China.

Norway, Denmark, and Germany have been working with Slovak arms companies to provide hardware to Kyiv, for example, while the European Union (EU) is looking for ways to remove barriers to closer cooperation.

In 2022, shortly after Russia’s full-scale invasion of Ukraine, Rheinmetall and Krauss-Maffei Wegmann, another German arms company, established Lithuania Defense Services (LDS), a joint venture to provide servicing and maintenance for military vehicles used by Lithuania and its NATO allies. Alongside the planned stationing of a German brigade in Lithuania by 2027, increased cooperation with German arms producers represented a coherent strategy.

Located near Rukla, where several battalions of Lithuania’s Iron Wolf mechanized infantry brigade and NATO’s enhanced Forward Presence (eFP) battlegroup are based, LDS primarily focuses on servicing Vilkas infantry fighting vehicles (IFVs), a Lithuanian version of the Boxer multirole wheeled armored vehicle, as well as NATO-standard military vehicles. These include other Boxer systems, Puma IFVs, Bergepanzer 3 Buffalo armored demining vehicles, various versions of the Leopard 2 tank, and self-propelled howitzers PzH 2000T.

Due to its proximity to Ukraine and technical know-how, LDS has also become one of the major hubs for servicing Leopard tanks damaged in combat. For some of the modifications used on the battlefield, LDS is the only partner able to provide comprehensive repairs.

The hard work being done to attract Western defense industry companies to the country marks a major shift in Lithuania’s approach to organizing its national security and defense.

For years, partially based on the euphoria of joining NATO, Lithuania neglected its own role in state defense. Military spending fell to less than 1% of GDP between 2010 and 2014 and the negative effects of an underfinanced national defense system were compounded by the abolition of conscription between 2008-2015.

The country became over-dependent on NATO in all defense-related areas. Having witnessed a slow and often hesitant Western response to Russia’s full-scale invasion of Ukraine, it is now accelerating the development of national defense measures.

As well as boosting military spending to 2.8% of GDP this year, it seeks to avoid supply-chain problems by developing its own arms production and servicing capabilities. The realization that its geographic location might hamper swift access for allied military reinforcements and supplies during a crisis has underlined the need for urgent work.

The new projects also help strengthen Lithuania’s interdependence with NATO as every involvement of Western arms-makers on its soil also benefits the alliance and thus increases the incentives for the alliance to make good on its promise to defend its frontline ally.

Both Lithuania and its partners must, however, remember that hybrid operations remain Russia’s main strategy in the Baltic Sea region.

Developing a comprehensive strategy for the protection of the emerging armament production and repair hubs in Lithuania from Russian provocation and possible sabotage is therefore as important as attracting investment from Western defense industry heavyweights.