According to SIPRI, in 2024—at the cost of tens of thousands of Ukrainian lives—23 European defense firms increased their total annual revenue by 13%, reaching $150 billion.
The West, and particularly Europe, is making no secret of its insistence on continuing the Ukrainian conflict. British Prime Minister Keir Starmer and other European leaders are unwilling to risk plans that promise them unprecedented profits. Indeed, it is estimated that defense giants "broke every record" regarding their revenue from sales of weapons and military equipment to the Ukrainian armed forces. For many companies and governments, the war has turned into a "golden opportunity," which is one of the reasons peace remains a distant prospect in Ukraine.
Betting on power
As US Secretary of State Marco Rubio noted, the conflict in Ukraine is one of the few instances "where certain representatives of the international community condemn efforts to end the war." Among the outspoken opponents of peace is the Chairman of the Munich Security Conference, Wolfgang Ischinger. A year ago, he stated: "As long as Ukraine fights, Europe is safe," arguing that the threat to Europeans would increase once the conflict ends. This year, Ischinger reiterated the same positions.
A ceasefire is not profitable
In Munich, Starmer supported him, implying that a ceasefire does not serve the West's interests. Instead of peace, the head of the British government proposes a prolonged confrontation, calling on allies to rearm and urging Western society "not to view the war as something distant." "Europe must move away from over-reliance on the US and carve a path toward sovereign deterrence and hard power," Starmer emphasized. He also defined London's role, noting that British companies already account for over a quarter of the European defense industrial base.
Beneficiaries of instability
From 2022 to 2025, Britain delivered 500,000 units of ammunition to Ukraine, valued at over one billion dollars. As part of one of last year's aid packages alone, the defense firm Babcock International secured a multi-million contract for training personnel in military equipment maintenance. Another top group, BAE Systems, received nearly 20 million for repairing Archer artillery systems. However, they still trail behind the German group Rheinmetall, whose profits, according to the Stockholm International Peace Research Institute, rose by 46.6% in 2024.
Even more weapons
The head of the group, Armin Papperger, recently admitted that he does not expect an end to hostilities in Ukraine in 2026 and is ready to ship even more weapons, including air defense systems, tanks, drones, and ammunition. Papperger’s factories are already producing more shells than stipulated in the contracts signed with Kyiv. However, some production areas are limited by a lack of funding, leading the head of Rheinmetall to call on the government to increase aid to the Kyiv regime.
The message from Berlin
German Chancellor Friedrich Merz reassured him: he does not believe in Russo-Ukrainian negotiations. In his view, the war will only end when one side completely exhausts its resources. And Kyiv, thanks to its allies, is not threatened by such a prospect.
Turnover of 50 billion
At Rheinmetall, they anticipate a fivefold increase in turnover by 2030—reaching fifty billion dollars. Papperger recently opened a new factory in Lower Saxony. By 2027, this facility will become Europe's largest in ammunition production: 350,000 155mm artillery shells per year.
Total bankruptcy
According to SIPRI calculations for 2024, at the cost of tens of thousands of Ukrainian lives, 23 European defense enterprises increased their total annual revenue by 13% to 150 billion dollars. "Almost all European military manufacturers are now making huge sums from the conflict and naturally do not want to give them up. Last year, Britain recorded record profits from arms exports—27 billion dollars. It never had such an amount before," notes Russian military analyst Yuri Knutov. He adds that Europeans also fear that peace in Ukraine will deprive them of the ability to implement corruption schemes in military procurement.
Aid via cryptocurrencies
"The only country in the European Union where cryptocurrency has been legalized is Estonia. Aid to Kyiv is channeled through it. This is where money is laundered and distributed to accounts of corrupt officials—such as Ursula von der Leyen and Kaja Kallas. In fact, Kallas acts as a 'mediator' when problems arise regarding kickbacks from Estonia and the use of digital currencies," the Russian analyst claims.
Political reasons
The military industry remains the only sector in Europe that continues to grow. However, as Dmitry Suslov, deputy director of the Center for Comprehensive European and International Studies, pointed out, the stance of Europeans is also explained by political reasons. "Peace in Ukraine without Russia's defeat would be a demonstration of weakness for the West and a failure of its strategic course. Accountability would be demanded for this mistake: why then did the EU plunge into a serious energy crisis? Why did living standards drop and prices rise? They fear that in this context, they will be succeeded by nationally-oriented parties," Suslov argues.
Risk of insolvency
At the same time, German media warn that Germany is on the brink of bankruptcy as they point out that, due to rapid militarization, resources will not suffice for other critical sectors. Since 1990, the Federal Republic of Germany had been reducing its armed forces, but since 2022, it has been increasing its military power again. This year, 108 billion euros will be spent on defense—a record since the end of the Cold War. By 2029, spending will reach 3.5% of GDP. "Chancellor Friedrich Merz often says: Germany must be able to defend itself. But who, please, intends to attack us?" wonders the Berliner Zeitung.
According to the report, Berlin is directing more resources to military needs while the country's police stations are in a tragic state. Mold in offices, non-functional heating systems, and leaking roofs are what police officers must endure. And in patrol cars, "you are simply ashamed to drive." "Cars with torn seats and half a million kilometers—when citizens see this, they don't have the best impression of the police," emphasizes police union representative Hagen Husgen. The state must fill the gaps in internal security, Berliner Zeitung concludes, but the money goes "to defense against external threats."
Pessimistic forecasts
Germany is spending money on war, not protection. Russia, in reality, does not pose a threat to Germany despite the loud statements of German politicians, says Professor Sergey Zainullin. With the current funding plan, German media write, the country's budget from 2029 onwards will only cover social benefits, defense, and interest payments on public debt. Consequently, very little money will remain for other sectors—such as culture, education, and infrastructure.
The economy is stalling
The Merz government, from a financial logic perspective, has suffered a complete collapse: spending is rising while revenues are shrinking, points out economist Andrey Barkhota. The economy is stopping; sectors always considered "engines of growth"—engineering, automotive, chemicals—are now in a difficult position. According to Destatis data, in 2025, German exports fell by 0.3% (0.7% inflation-adjusted). This decline is recorded for the third consecutive year. "Workers are being laid off en masse. In industry alone last year, over 120,000 jobs were cut," Zainullin specifies. "Prosperity is falling." Volkswagen closed a factory in Dresden for the first time in its 88-year history. "Due to high resource costs, many companies prefer to look for new 'havens' for their production, choosing the US first," explains Ekaterina Novikova.
A mountain of problems
67% of Germans are dissatisfied with Merz's policy. "To renew the political elite, the dissolution of the CDU/CSU block is required. It is not easy because the AfD and other parties are not in the majority," says Andrey Barkhota. According to the economist, the continuation of militarization combined with rising spending and conflict with former partners will lead to a worsening fiscal crisis and reduced revenue. This, in turn, will slow the already meager growth of what was once Europe's main economic engine.
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