We encourage you to read our review of the past week in Central and Eastern Europe:
Will Rheinmetall take over a Romanian shipyard?
The Romanian shipyard Mangalia is undergoing a restructuring process, which involves the sale of a majority stake to a new investor. One of the largest shipbuilding companies in the country, it has the capacity to build medium-sized surface vessels and offshore structures. It is currently 51% controlled by the Romanian state treasury and 49% by the Dutch Damen group. The German Rheinmetall group, which is systematically increasing its activity in the field of marine systems, has expressed interest in the acquisition.
Rheinmetall is actively expanding in the region, with a particular focus on Romania, where, among other things, it plans to build a large-caliber ammunition factory and has already established a repair facility for the Ukrainian Armed Forces. The German company is actively seeking to win the ongoing tender for new infantry fighting vehicles, which in this case could involve co-financing from the EU’s SAFE program. A potential win in this lucrative tender could be linked to other investments in Romania, such as the Mangalia shipyard.
US ambassador in Prague critical of Czech defense budget
US Ambassador to the Czech Republic Nicholas Merrick criticized the government’s budget plans for next year, pointing out that the projected defense spending of 1.8% of GDP is exceptionally low compared to other allies. The diplomat expressed his opinion during a public speech at a local conference on security issues. The slight reduction in the defense budget is an important element of Andrej Babiš’s cabinet policy, which emphasizes the transfer of funds to social purposes and the fulfillment of pre-election promises.
The US ambassador’s open expression of opinion is in line with the current policy of the US administration, which requires European allies to contribute more to collective security. Ambassador Merrick was nominated after Donald Trump’s election victory, which underscores the political significance of his criticism. This is uncomfortable for Prime Minister Babis, who is trying to emphasize his good relations with the US president.
Agreement between ZVS and Eurenco
On March 4, Slovakia’s ZVS and France’s Eurenco signed an agreement to establish a joint venture to manufacture modular propellants, a key component of large-caliber artillery ammunition. ZVS is a company owned by the Slovak state treasury and the Czech CSG group, which recently made its debut on the Amsterdam stock exchange with a valuation of EUR 33 billion. The agreement provides for the construction of a new production plant in the Slovak town of Strážske and the launch of production in 2028.
Slovakia is an increasingly important part of the regional supply chain for large-caliber artillery ammunition and its components, and the recipients of these products include the Polish Armed Forces. The creation of a new company and production plant will further strengthen its position, as will that of France’s Eurenco, which will also increase its investments in Poland in the coming years.
Estonian citizen detained on suspicion of terrorism and espionage
A 27-year-old Estonian citizen and a 28-year-old Azerbaijani citizen were detained at Larnaca airport shortly before their planned departure from Cyprus.
Following a warning to the Cypriot authorities from allied intelligence services about the couple’s potentially dangerous plans, their activities had been monitored for several days. Both are suspected of espionage and terrorist activities in connection with reconnaissance of sites of importance to national defense. The Estonian woman and the Azerbaijani man photographed objects in Paphos, Limassol, and Larnaca. According to investigators, the man was linked to Iran’s Islamic Revolutionary Guard Corps and had traveled to that country many times. The Estonian citizen, as his partner, was supposed to cooperate with him and assist in the implementation of reconnaissance and intelligence tasks.
At this stage of the case, little is known about the identities of either the Estonian citizen or the Azerbaijani citizen. Neither their personal details nor information about their previous place of work, origin, or place of birth have been disclosed publicly. Following the disclosure of the actions taken by the Cypriot side, intensive diplomatic consultations and investigations are underway. The case is also linked to a 44-year-old Azerbaijani citizen who was previously detained for conducting reconnaissance of important military facilities, including the air base in Paphos, Cyprus.
This is the same base that was among the facilities targeted by reconnaissance activities carried out by the detained Estonian and Azerbaijani citizens.
Russia expands control over foreign investments in strategic sectors
On March 8, 2026, Federal Law No. 51-FZ came into force, introducing changes to the rules for foreign investments in companies of strategic importance to national defense and security. The amendment expands the list of entities required to obtain the consent of the security authorities (including the FSB and the Ministry of Defense) for the acquisition or disposal of shares, and also strengthens the control powers of the “security forces” over foreign capital.
The change is another step towards subordinating the economic sphere to the state security structure. The law is part of a trend towards concentrating ownership and investment decisions under the control of the “security” elites, limiting the influence of external capital in sectors that are key to the stability of the system. In the medium term, this may hinder the inflow of foreign investment even in formally civilian areas, deepening the process of autarky in the Russian economy.
All-Russian MSN exercises before the flood and fire season – above-standard civil defense exercises
On March 11-12, nationwide Civil Defense (OC) command and staff exercises will be held under the leadership of the Ministry of Emergency Situations (MSN). Their purpose is to test the readiness of the Unified State System for the Prevention and Elimination of Emergency Situations to deal with flood waters and prepare for the upcoming fire season. All levels of the system are participating in the exercises, from the ministerial to the regional and municipal levels. At the regional level, the activities are announced as “Large-Scale Exercises” organized under the auspices of the EMERCOM. For example, in the Orenburg region on March 11-12, the MSN structures are to practice protecting residential buildings and economic infrastructure from the effects of floods and fires, with particular emphasis on the coordination and “harmonization” of all rescue and administrative services.
The MSN exercises are planned (seasonal) in nature, but are carried out in a much broader format than previous seasonal exercises. It is significant that the current exercises cover the entire crisis management structure, which is very rare in the standard annual activities of the Russian MSN and OC.
The scale of the undertaking indicates the testing of the MSN’s actual operational capabilities in crisis situations, while maintaining a high level of Civil Defense readiness within the national security system. Usually, such a wide range of exercises is organized by the MSN in October each year.
Acceleration of the construction of a Leopard tank assembly plant near Kaunas.
On March 4, 2026, the Lithuanian government decided to apply a special procedure related to investment processes for the construction of a Leopard 2A8 tank assembly plant in the Kaunas Special Economic Zone (Lithuanian: Kauno laisvoji ekonominė zona). The purpose of granting this status is to streamline the administrative procedure, in particular with regard to the issuance of building permits and obtaining the necessary permits for the implementation of the investment. The project to build this infrastructure has been included in the list of Lithuania’s strategic investment projects, which underlines its importance for national security.
The total value of the investment carried out by Lithuania Defense Services (LDS) is estimated at around €50 million. The Leopard 2A8 tanks were contracted back in December 2024, and their main manufacturer and supplier is KNDS Deutschland. Currently, the main shareholder of LDS, apart from KNDS, is Rheinmetall. In 2026, the Lithuanian energy company EPSO-G Invest plans to increase its share to approximately 25%.
The establishment of a plant near Kaunas is intended to serve the local assembly of parts of the ordered equipment, as well as to ensure the long-term technical maintenance and combat readiness of the Leopards. The agreement provides for the delivery of all vehicles by the end of 2030. It is worth noting the consistent strategy of the Lithuanian government, aimed at strengthening both economic and defense relations with Germany. A particularly important initiative from the point of view of the Lithuanian Armed Forces is the support for the creation of the 45th Armored Brigade (German: Panzerbrigade 45 “Litauen”), which is to be equipped with Leopard tanks, among other things.
Data leak from state IT resources in Finland
In early March 2026, a serious breach of IT security in January this year was disclosed at the Finnish state ICT center Valtori, where as yet unidentified attackers exploited vulnerabilities in the security system for mobile device management. Contact details (personal data, telephone numbers, device identification data) of up to 50,000 employees of the administration, including the Ministry of Defense, were accessed. Classified military systems remained secure, but the data leak includes data identifying individuals involved in logistics and defense procurement.
Although the leak did not affect the secure and separate systems of the armed forces (fin. Puolustusvoimat), it could have created a real risk to Finland’s defense by exposing the civilian contacts of military personnel. The incident is part of a broader operation of attacks on government institutions in Europe, which, in the context of tensions with Russia, raises legitimate concerns about preparing the ground for further hybrid operations.
News from the Eastern Flank Institute (EFI):
- In the latest episode of the “Magazine” podcast, EFI Director Piotr Woyke presented a report entitled “Drone Warfare: An Eastern Flank Institute Compendium” (in Polish) and discussed the history of the use of unmanned aerial vehicles in combat operations, the characteristics of selected types of drones, and the development prospects for Polish companies specializing in this technology. We encourage you to listen to the entire episode (in Polish).
- Is Poland prepared for confrontation in the information domain? We encourage you to read the new analysis by EFI expert Col. (ret.) Łukasz Paczesny, entitled “Information Operations Units of the Russian Military Intelligence GRU”.
- The Eastern Flank Institute has taken patronage of the latest book by Bartłomiej Wypartowicz and Wojciech Kozioł entitled “A War We Don’t Want. But Are We Ready for It?” This is an important voice in the debate on Poland’s security and the state’s resilience to contemporary threats. We encourage you to pre-order the book (in Polish) on the Prześwity publishing house website.
