BRUSSELS — EU ambassadors are close to a deal on a €90 billion loan to finance Ukraine’s defense against Russia thanks to a draft text that spells out the participation of third countries in arms deals, three diplomats said Wednesday. The ambassadors are scheduled to meet on Wednesday afternoon to finalize talks after a week of difficult negotiations. The final hurdle was deciding how non-EU countries would be able to take part in defense contracts financed by the loan. The draft deal, seen by POLITICO, would allow Ukraine to buy key weapons from such countries — including the U.S. and the U.K. — either when no equivalent product is available in the EU or when there is an urgent need. The list of weapons Kyiv will be able to buy outside the bloc includes air and missile defense systems, fighter aircraft ammunition and deep-strike capabilities. If the U.K. wants to take part in procurement deals beyond that, it will have to contribute financially to help cover interest payments on the loan. The text also mentions that the British contribution — to be agreed in upcoming negotiations with the European Commission — should be proportional with the potential gains of its defense firms taking part in the scheme.  France led the effort to ensure that EU countries — which are paying the interest on the loan — gain the most from defense contracts. In an effort to get Paris and its allies on board, the draft circulated late Tuesday includes new language which says that “any agreement with a third country must be based on a balance of rights and obligations,” and also that “a third country should not have the same rights nor enjoy the same benefits,” as participating member states. The draft also strengthens the control of EU countries over whether the conditions to buy weapons for Ukraine outside the bloc have been met, saying Kyiv will have to “provide the information reasonably available to it demonstrating that the conditions for the application of this derogation are met.” That will then be checked  “without undue delay” by the European Commission after consultation with a new Ukraine Defence Industrial Capacities Expert Group. The new body will include representatives from EU members countries, according to diplomats. The European Commission will raise €90 billion in debt to fund Ukraine’s war effort before Kyiv runs out of cash in April. After facing intense pressure from national capitals, the Commission agreed to deploy unused funds in its current seven-year budget to cover the borrowing costs. If that is not enough, member countries will have to pay the difference. Budget Commissioner Piotr Serafin will meet the European Parliament and the Cypriot presidency of the Council of the EU on Thursday in an attempt to solve disagreements on the repayment of the borrowing costs, said one official.

ABOARD THE PRIME MINISTER’S PLANE TO BEIJING — Keir Starmer rejected his Canadian counterpart’s call for mid-sized countries to band together in the face of unpredictable global powers — and insisted his “common sense” British approach will do just fine. The British prime minister arrives in China Wednesday for a trip aimed at rebooting the U.K.’s relationship with the Asian superpower. He’s the latest Western leader to make the visit — which will include a meeting with Chinese President Xi Jinping — after trips by Carney and France’s Emmanuel Macron. Carney used a searing speech at the World Economic Forum last week to warn of the “rupture” caused by “great powers” acting in their own self-interest. While he did not namecheck Donald Trump’s administration, the speech riled the U.S. president, who insisted: “Canada lives because of the United States.” The Canadian PM had called for middle powers to work together to “build something bigger, better, stronger, more just.” Starmer was pressed on those remarks on board his flight to China Tuesday. Asked whether he agreed that the old global order is dead — and whether smaller powers need to team up to push back at the U.S. and China, Starmer defended his own policy of trying to build bridges with Trump, Xi and the European Union all at once. “I’m a pragmatist, a British pragmatist applying common sense, and therefore I’m pleased that we have a good relationship with the U.S. on defense, security, intelligence and on trade and prosperity,” he says. “It’s very important that we maintain that good relationship.” He added: “Equally, we are moving forward with a better relationship with the EU. We had a very good summit last year with 10 strands of agreement. “We’ll have another summit this year with the EU, which I hope will be iterative, as well as following through on what we’ve already agreed. “And I’ve consistently said I’m not choosing between the U.S. and Europe. I’m really glad that the UK has got good relations with both.” Starmer’s government — which faces pressure from opposition parties back home as it re-engages with China — has stressed that it wants to cooperate, compete with and challenge Beijing when necessary, as it bids to build economic ties to aid the sputtering U.K. economy. “Obviously, China is the second biggest economy in the world, one of our biggest trading partners,” the British PM — who is flying with an entourage of British CEOs and business reps — said Tuesday. “And under the last government, we veered from the golden age to the ice age. And what I want to do is follow through on the approach I’ve set out a number of times now … which is a comprehensive and consistent approach to China. “I do think there are opportunities, but obviously we will never compromise national security in taking those opportunities.”

The new U.S. defense strategy formally pushes Europe down Washington’s list of priorities while elevating Greenland to a core homeland security concern — suggesting European allies will be expected to shoulder more responsibility for their own defense. “Although Europe remains important, it has a smaller and declining share of global economic power,” the National Defense Strategy, published late Friday, states. “It follows that while the United States will remain engaged in Europe, it must — and will — prioritize defending the U.S. homeland and deterring China.” The strategy also makes clear that in Europe “allies will take the lead” against threats that are “less severe” for the United States but more acute for them, with Washington providing “critical but more limited support.” The document argues that Europe is economically and militarily capable of defending itself, noting that non-U.S. NATO members dwarf Russia in economic scale, and are therefore “strongly positioned to take primary responsibility for Europe’s conventional defense.” At the same time, the strategy places emphasis on Greenland, explicitly listing the Arctic island — alongside the Panama Canal — as terrain the U.S. must secure to protect its homeland interests. The Pentagon says it will provide the president with “credible options to guarantee U.S. military and commercial access to key terrain from the Arctic to South America, especially Greenland,” adding that “we will ensure that the Monroe Doctrine is upheld in our time.” That framing aligns with President Donald Trump’s recent rhetoric on Greenland, which has unsettled European capitals and fueled concern over Washington’s long-term intentions in the Arctic. The defense strategy builds on the Trump administration’s National Security Strategy released in December, which recast the Western Hemisphere — rather than Europe — as the primary arena for defending U.S. security. While the earlier document went further in criticizing Europe’s trajectory, both strategies stress continued engagement paired with a clear expectation that European allies will increasingly take the lead on threats closer to home.

America’s NATO allies slammed U.S. President Donald Trump’s suggestion that allied forces stayed “a little off the front lines” in the war in Afghanistan. “We’ve never needed them … they’ll say they sent some troops to Afghanistan,” Trump said in an interview with Fox News in Davos on Thursday, referring to NATO allies. “And they did — they stayed a little back, a little off the front lines.” The remarks prompted European leaders and veterans to point to frontline deployments and heavy casualties alongside U.S. forces in Afghanistan. “Wrong and without respect” is how Norway’s Defense Minister Tore O. Sandvik described Trump’s comments. “All fallen soldiers, their families and veterans deserve to be spoken about with respect,” Sandvik told local media, adding that he fully understood why veterans and relatives were angered by Trump’s words. More than 10,000 Norwegian troops served in Afghanistan and 10 were killed, he noted. Denmark’s ambassador to the United States, Jesper Møller Sørensen, said Danish forces fought “on the front line” in Helmand province in the Afghan war and suffered one of the highest per-capita casualty rates among NATO allies. “That was solidarity,” Sørensen wrote in a post on X. “We stood with America then — and we still do.” Polish Prime Minister Donald Tusk recalled attending a farewell ceremony in Ghazni in 2011 for five fallen Polish soldiers. “The American officers who accompanied me then told me that America would never forget the Polish heroes,” he wrote on X, adding: “Perhaps they will remind President Trump of that fact.” U.K. Prime Minister Keir Starmer called Trump’s remarks “insulting and frankly appalling.” “I will never forget [U.K. soldiers’] courage, their bravery and the sacrifice that they made for their country,” Starmer said on X. Reform UK leader Nigel Farage said: “Donald Trump is wrong. For 20 years our armed forces fought bravely alongside America’s in Afghanistan.” Prince Harry, who served two tours in Afghanistan as a British Army captain in 2008 and 2012, said NATO allies “answered that call” when Washington invoked Article 5 of the NATO treaty after the 9/11 attacks in 2001. “I served there. I made lifelong friends there. And I lost friends there,” Prince Harry said in a statement. He noted that the U.K. alone lost 457 service personnel, adding that “thousands of lives were changed forever.” “Mothers and fathers buried sons and daughters. Children were left without a parent. Families are left carrying the cost,” he said, urging that those sacrifices be spoken about “truthfully and with respect.” U.K. Defense Minister John Healey said British troops who died in Afghanistan were “heroes who gave their lives in service of our nation.” French Armed Forces Minister Catherine Vautrin said France had been engaged in Afghanistan from 2001 alongside its NATO allies, recalling the 90 French soldiers killed in operations and many others wounded. “We remember their sacrifice, which commands respect,” she wrote.

When Vladimir Putin sent at least 19 drones into Poland last week, the Russian president was delivering a message: He’s not planning to end his war against the West anytime soon. The Russian incursion into NATO airspace follows weeks of aerial attacks in Ukraine that killed dozens of civilians, damaged buildings housing the EU and British delegations and struck for the first time a government building in central Kyiv.  Far from being ready to strike a peace deal with Ukraine under pressure from U.S. President Donald Trump, Putin has pegged his political survival to a simmering conflict with the United States and its allies. “Putin is the president of war,” said Nikolai Petrov, a senior analyst at the London-based New Eurasian Strategies Center. “He has no interest in ending it.” Having fashioned himself as a wartime leader, going back to being a peacetime president would be tantamount to a demotion. “No matter what the conditions are, he cannot give up that role,” Petrov said.  As Putin’s full-scale assault on Ukraine drags toward its fourth year, the Russian president arguably has the most cause for optimism since the early days of the war when the Kremlin hoped to capture the country in a matter of days. With Ukrainian forces hamstrung by a lack of weapons and manpower, Russia has been grinding deeper into the country.  But Moscow’s progress has been slow — and costly. The Kremlin’s armed forces have suffered an estimated one million casualties and the conflict has taken its toll on the Russian economy, which threatens to tip into recession. And yet, politically, ending the conflict comes with risks. The Kremlin’s tight control over the media and the internet would likely allow it to sell a peace deal to most Russians as a victory. But that’s not who the Russian president will be worrying about. With Russia’s liberal opposition decimated, a small but vocal group of nationalists now presents the biggest threat to his rule, said Petrov. And he has promised them a grandiose victory, not only over Ukraine but over what the Kremlin calls “the collective West.” “There’s a desire among the hawkish part of the military-political establishment to destroy NATO,” Alexander Baunov, a former Russian diplomat now a senior fellow at the Carnegie Russia Eurasia Center, told DW’s Russian service. “To show NATO is worthless.” Since Putin met with Trump in Alaska last month in what the U.S. president had touted as a summit dedicated to striking a ceasefire, Moscow has ramped up its campaign of hybrid warfare against Europe, according to military analysts.  Before Wednesday’s incursion, Russian drones had repeatedly ventured into Polish airspace from neighboring Belarus, circling cities before turning back. In August, a Russian drone crashed some 100 kilometers southwest of Warsaw.  According to WELT, a sister publication of POLITICO in the Axel Springer Group, five of the drones that crossed into Poland were on a direct flight path toward a NATO base before being intercepted by Dutch Lockheed Martin F-35 fighter jets. In an opinion piece published two days before the drones crossed into Poland, Dmitry Medvedev, deputy chairman of Russia’s Security Council, accused Helsinki of planning an attack, threatening that any assault “could lead to the collapse of Finnish statehood — once and for all.”  Analysts noted the article’s rhetoric resembled the Kremlin’s talking points ahead of Russia’s full-scale invasion of Ukraine in February 2022. Moscow has also begun to shift vital industries, including shipbuilding, to the east of the country, away from its border with NATO, Petrov pointed out. On Friday, Russia began carrying out large-scale military exercises with Belarus, including just across the Polish border. The exercises are expected to conclude on Tuesday. “Whatever Putin achieves in Ukraine, the confrontation with the West will not end there; it will continue in various forms,” said Petrov. “Including militarily.” With actions like the incursion into Poland, Putin is issuing a warning to Trump and European leaders discussing providing security guarantees for Kyiv after a potential peace deal, said Kirill Rogov, founder of the think tank Re:Russia. “Putin showed that he can attack NATO countries today and they have no defense systems in place,” he said. Trump’s mixed signaling on his commitment to NATO and his unwillingness to stick to his own deadlines when it comes to imposing sanctions on Moscow give Putin the confidence that he can get away with it. For the Russian president, “it’s now or never,” Baunov added. Incursions like the one in Poland are intended to chip away at the Western military alliance’s commitment to collective defense, with small offensives that test NATO’s willingness to respond. The hope, said Baunov, is to reveal the military alliance as a toothless tiger. So far, the reaction from Washington has fed into those fears.  On Thursday, Trump echoed Moscow’s talking points, telling reporters that “it could have been a mistake.”  The Kremlin has dismissed accusations that the drones were a deliberate provocation. The Russian defense ministry said there “had been no plans to target facilities” in Poland.  Belarus, which served as a launchpad for some of the drones according to Polish officials, said the incursion could have been the result of a mishap due to “electronic jamming.” “This is typical Putin-style trolling and probing,” said Rogov. “He likes things to be ambivalent so that they can be interpreted either as deliberate or accidental.”

Blockages in the technology innovation pipeline and digital skills shortages were just some of the topics discussed by industry stakeholders during a DSEI-hosted roundtable held in July. Chaired by the UK minister for defense procurement, Maria Eagle, attendees included the likes of KX, Forcys, Dell and Amazon Web Services, all of which are attending DSEI UK 2025. The theme of the roundtable was ‘developing defense technology at pace to meet modern battlefield requirements’, a key theme at this year’s DSEI UK. Under the banner of this overarching theme, four sub-themes were discussed by the group as company representatives directed questions and suggestions toward the minister. The minister opened the proceedings by outlining the priorities of the UK’s Ministry of Defence (MoD), calling the current moment a “pivotal” one for UK defense as the country looks to return to warfighting readiness. Technology will be central to this move and the UK is set on becoming a leading “tech-enabled defense superpower by 2035,” she said, with priorities based on the lessons learned in Ukraine. Changes like these will require some changes in the government’s approach to technology, though. “We’ve got to innovate at the speed of technology … there’s no point taking six years to get to contract on a drone — you’d just be contracting to put it in the museum,” she added. > We’ve got to innovate at the speed of technology … there’s no point taking six > years to get to contract on a drone — you’d just be contracting to put it in > the museum. Changing the way the UK government acquires and utilizes innovative defense technology at speed and scale will require stronger collaboration between government and industry, however, and there is still some way to go to ensure this relationship works, according to industry stakeholders at the roundtable. Bolstering the innovation pipeline A major hurdle for defense firms is navigating the ‘valley of death’ — the time between developing an initial concept and the point at which the company starts to see returns on its investment. Businesses need considerable support to stay liquid and avoid bankruptcy in this period. “I think part of the challenge that we’ve identified is taking an operational concept demonstrator, which we’ve been involved with in defense, and bringing that into core [military programs],” a representative from KX, a software company based in Northern Ireland, said. “[It’s] the valley of death or the cup of opportunity, as I call it — and nobody seems to be drinking from that cup,” the representative said. “A lot of attention goes to the SMEs [small and medium-sized enterprises] and the concept demonstration, and the primes get a huge amount of attention at the other end of the scale, but dragging those concept demonstrators into a core program, that seems to be a key challenge, and it would be great to understand how that can be accelerated so that concepts don’t just wither on the vine.” Eagle recognized that concept demonstrators are sometimes shelved with “no follow up,” noting that the “valley of death has been a big problem.” To address this, the UK is “establishing UK innovation,” with the goal of getting “new ideas and concepts, and new ways of doing things to the warfighter.” Company representatives and moderator gathered at DSEI UK roundtable.  Is there enough support for SMEs? Another portion of the roundtable focused on how SMEs position in the defense ecosystem can be further supported, particularly by other key stakeholders such as the UK MoD and DSEI UK. Eagle noted the UK government’s plans to establish an SME hub in the “not too [distant] future” to provide smaller defense tech companies with assistance for working in the sector and with the MoD. A representative from Forcys welcomed plans to establish an SME hub but did push back against the minister, arguing that many of these initiatives designed to fund innovation do not come with “sufficient money.” “The average DASA [Defence and Security Accelerator] award is £50,000 to £100,000 — its buttons to what’s actually required to develop something at pace and really develop it properly, rather than just playing into it,” the representative argued. The representative also rallied against the problems faced by Forcys due to its size, given it is defined neither as an SME nor a prime. This means it doesn’t get the support infrastructure afforded to smaller firms or the advantages that come with having the scale of a prime.   The future of dual use and next-gen skills issues Looking ahead, stakeholders at the roundtable also discussed what the future might look like for the defense industry, given the changing nature of dual-use technology and the concerning digital skills gaps in the sector. > Stakeholders at the roundtable also discussed what the future might look like > for the defense industry, given the changing nature of dual-use technology and > the concerning digital skills gaps. Understanding the defense supply chain is crucial on the dual-use front, according to a representative from PQShield. They pointed to the untapped potential in dual-use, explaining that many companies don’t know how to sell to the defense industry. “We’re struggling to pitch it to defense right now because we don’t know the best place to go,” the representative said, speaking about PQShield’s cryptography products and solutions. Discussion also turned to the difficulties the defense industry faces in acquiring workers with the right skills or having access to graduates and those early in their careers. “We’re being outgunned by gaming, by fintech, by the finance industry — we’re not getting the best people. We say we do, we don’t because we just simply can’t pay for them,” said Rob Taylor, founder of training technology firm 4GD. Adding to this point, the representative from KX said that they would like to see schools doing more to incentivize students to seek out technology jobs. A good approach would be to start from year seven or even younger, they said. Eagle agreed that the skills issue is “tremendously important,” adding that the UK’s skills system has not worked as well as it could for some time and that many industries are suffering the same skills shortages. “As we’ve had the last few years, where you’ve got a war on our doorstep and things like that going on, there’s been a shift back towards understanding the value of defense. But there’s some ways still to go, so we’ve got more work to do on that,” Eagle said.