Czechia set to become a major player in Europe’s defence strategy

This is the lead that everybody is tolking about.

17.04.24 | Jakub Roubíček

There might be a new defence industry challenger in the European market: Czech industrial and technological holding, Czechoslovak Group, (CSG) plans to buy Kinetic Group, an American ammunition manufacturer. With this acquisition, CSG would thus acquire additional arms production capacities and valuable know-how. This move upsets the United States as they fear increased ties to Russia. For Czechia itself as well as for Europe meanwhile, it is of high potential.

Czechia as meaningful player in the past

A look into the country’s history shows that it already used to be a major powerhouse during the Austro-Hungarian Empire when meaningful companies were founded to produce ammunition. Czech companies in the sector also remained of importance later, for instance as a defence provider against Nazi Germany in the 1930s.

Even though the industry was nationalised by the communists after the Second World War Czechia’stradition and expertise in defence production was upheld, especially in comparison to other countries in the region.. Still today, Czechoslovak Group owns tries to dominate the Czech and Slovak markets as well as producing for foreign ones.

How Czechia could establish itself on the market

Czechia’s ambition in the defence industry puts it in competition with major European producers like Germany, Sweden, France and Italy. The Germans, for example, produce their own tanks, combat equipment and weapons, while the Swedes produce fighter jets. While each of these countries have their own specific arms production, Czechia has the potential to become a meaningful player on the market, in the field of light weapons and ammunition which are essential particularly in the context of support to Ukraine. With the planned purchase of the Kinetic group, the Czech CSG could ultimately manifest this position.

US concerns with CSG's ties to Russia

This acquisition bothers some US senators and politicians who are concerned about CSG's alleged ties to the Kremlin. In 2018, a misleading article was published in Foreign Policy magazine about the relationship between CSG executives and Russian oligarchs. At the same time, CSG supported former Czech President Miloš Zeman, who was known for his positive attitude towards Russia.

However, the cautiousness toward the Czech defence producer may be more likely to be a case of US hesitation to lose domestic business to a European company. The flip side of the coin is that having a major defence producer in Central Europe would align well with the European security and defence policies of the past two years. Firstly, it could lead to a reduction in dependence on global producers, especially American ones. Secondly, it increases the defence capability of the whole of Europe. If handled responsibly, it is a step that aligns with the interests of both Czechia and Europe.