On Wednesday (15 July), the European Union announced a major expansion of its defence cooperation with Ukraine, unveiling a new defence industrial partnership, launching the EU–Ukraine Drone Deal and disbursing a further €1 billion for drone procurement. Announced during European Commission President Ursula von der Leyen’s visit to Kyiv, the initiatives aim to strengthen Ukraine’s ability to defend itself against Russia’s ongoing aggression while accelerating the integration of the European and Ukrainian defence industries.
A Unified framework for joint production
The newly signed EU–Ukraine Defence Industrial Partnership establishes a single, coherent framework to coordinate and support existing bilateral drone agreements between Ukraine and individual EU Member States. By removing trade barriers and accelerating the alignment of technical standards, spanning areas from defence procurement to the protection of intellectual property, the initiative allows European and Ukrainian companies to form joint ventures and cooperate more seamlessly.
Under this framework, the EU and Ukraine have agreed to promote the joint production of drones and counter-drone systems by the end of 2026. This collaboration is designed to scale up the deployment of battle-proven systems to counter low- to mid-range drones and missiles, providing the long-term predictability needed to step up investment in both defence industrial bases.
Building on this approach, the cooperation will expand to the joint production of cost-effective anti-ballistic missiles by 2028 to address critical air defence gaps, while continuing to strengthen artillery production and secure key supply chains.
To drive this technological cooperation, the newly established EU–Ukraine Drone Deal will combine Ukraine’s battlefield-tested innovation with Europe’s manufacturing scale. The deal features 18 founding members, split equally between EU-based firms and Ukrainian developers. The group’s first meeting is scheduled to take place in Brussels this September, focusing on targeted technology transfers and dual-use investments.
Financing capabilities and innovation
Substantial, structured financial commitments from the European Union back this industrial integration. Today’s €1 billion disbursement represents the second payment under a €6 billion tranche of the Ukraine Support Loan (USL) dedicated specifically to drone procurement, which follows a €3.9 billion drone procurement payment on 30 June and a €3.2 billion Macro-Financial Assistance instalment on 25 June.
Established in February 2026, the USL provides up to €90 billion in overall support. For the year 2026, the Council has approved up to €45 billion in assistance, comprising €16.7 billion in budget support and €28.3 billion directly allocated to support Ukraine’s defence industrial capacities. To maintain this momentum, the Commission has approved a €10 billion disbursement plan to finance additional drones, missiles, and fighter aircraft in the future.
Beyond direct procurement, the joint “BraveTechEU” initiative is active in fast-tracking military technology by selecting six promising companies (Soraccel, EdgeX Robotics, Smaesh, Kova Labs, Tempterno Defence, and Rannon) to advance to the next phase of development. Their solutions will undergo testing under conditions reflecting the active war theatre in Ukraine, ensuring they respond directly to real battlefield needs.
Furthermore, Ukraine has been fully associated with the European Defence Fund (EDF), which has a €7.3 billion budget for 2021–2027, and the European Defence Industry Programme (EDIP), enabling Ukrainian and EU companies to form consortia and jointly participate in collaborative defence research and development.
Next steps
Ultimately, these developments signal a transition from short-term financial aid to a deeply integrated, long-term security alliance. By combining European industrial capacity with Ukraine’s rapid battlefield innovation, the EU and Ukraine are actively co-developing the future of European defence.
