Mercedes-Benz chief executive Ola Källenius has warned that excluding British manufacturers from European industrial preference rules would damage automotive production on both sides of the Channel, increasing pressure on Brussels ahead of negotiations over its proposed Industrial Accelerator Act.

The head of Mercedes-Benz has warned that excluding British manufacturers from the European Union’s proposed industrial preference rules would damage the competitiveness of carmakers across Europe, challenging Brussels over legislation intended to protect European production from growing international competition.

Ola Källenius, chief executive of Mercedes-Benz and president of the European Automobile Manufacturers’ Association (ACEA), criticised the prospect of restricting British participation in the forthcoming “Made in Europe” framework during discussions in Brussels on Wednesday, 14 October.

His intervention comes as European governments negotiate the Industrial Accelerator Act, which would introduce European-content requirements affecting public procurement and certain forms of industrial support.

The proposed legislation is intended to strengthen manufacturing within the EU, but its treatment of production in neighbouring countries has become contentious, particularly in an automotive industry whose factories and suppliers operate across national borders.

European production extends beyond the EU

British manufacturing remains closely integrated with continental European automotive production despite the United Kingdom’s departure from the single market.

Components manufactured in Britain are incorporated into vehicles assembled in EU member states, while British factories depend on engines, batteries, electronics and other parts produced in continental Europe.

The value of this integrated manufacturing system depends on companies being able to source components across borders without unnecessary restrictions.

Källenius warned that excluding the UK from the proposed rules would weaken manufacturers operating on both sides of the Channel.

His position reflects industry concerns that a narrowly defined European-content regime could impose additional costs on companies already facing pressure from Chinese competition, slowing demand and substantial investment requirements.

As EU Today reported in September, British Prime Minister Andy Burnham has been pressing Brussels to recognise the UK as a trusted industrial partner under the emerging framework.

Germany has also supported a broader approach that would allow selected trading partners to qualify under European-content rules where reciprocal conditions are met.

France has favoured stronger preferences for production within the EU itself, reflecting differences among member states over how far European industrial policy should extend beyond the Union’s borders.

A dispute over industrial sovereignty

The Industrial Accelerator Act proposed by the European Commission is intended to strengthen Europe’s manufacturing base and support production in strategically important sectors.

Its provisions address public procurement and industrial incentives affecting products including vehicles, steel, aluminium and clean technologies.

The Commission wants European public spending to support local industrial capacity rather than reinforce dependence on imports from major international competitors.

China has become the principal focus of those concerns because of its expanding manufacturing capacity, particularly in electric vehicles and batteries.

However, measures designed to counter Chinese industrial competition could also affect established trading partners whose manufacturers form part of European supply chains.

The United Kingdom, Norway, Switzerland and Turkey occupy different legal positions in their economic relations with the EU, but all maintain important industrial connections with member states.

An approach that treats their production as equivalent to imports from countries with substantially different market conditions could require European companies to reorganise existing supplier relationships.

For manufacturers, replacing a supplier may involve more than simply ordering components from another factory. Production standards, technical certification, logistics and long-term investment arrangements can make changes expensive and difficult.

Industry demands regulatory certainty

Following an ACEA board meeting on Wednesday, European manufacturers called for faster progress on the wider automotive legislative package.

In its 14 October statement, ACEA urged EU institutions to advance negotiations so that the package could be finalised early next year.

The association argues that manufacturers require a predictable regulatory framework to plan investments in electric vehicles, production facilities and new technologies.

Källenius linked the industry’s transition towards zero-emission mobility with the need to preserve employment and strengthen economic security.

European manufacturers are simultaneously investing heavily in electrification while competing against Chinese companies with established battery supply chains and significant production capacity.

The resulting financial pressures are particularly serious for manufacturers that must develop new vehicle platforms while maintaining existing factories and dealer networks.

Additional restrictions on component sourcing could complicate those decisions at a time when companies are seeking to reduce costs.

Britain refuses to follow EU tariffs automatically

The dispute has acquired a further dimension following remarks by British Business Secretary Jonathan Reynolds.

Speaking on Wednesday, Reynolds indicated that Britain would not automatically follow the European Union in imposing tariffs on Chinese vehicles.

The UK government maintains that trade measures must be determined according to British economic interests rather than adopted simply to align with Brussels.

That position complicates London’s attempt to secure favourable treatment under European industrial rules.

EU policymakers have argued that closer alignment on trade defences could support Britain’s claim to be treated as a trusted partner.

British ministers, however, must consider whether restrictions on Chinese imports would benefit domestic manufacturers and consumers.

The disagreement will form part of the broader economic relationship being discussed ahead of the next UK–EU summit, scheduled for 20 November.

The wider implications for EU–UK relations

The automotive dispute follows earlier negotiations over British participation in European defence procurement and other industrial programmes.

In both cases, London wants access to initiatives designed to strengthen European production while remaining outside the EU’s institutional framework.

Brussels must determine how far preferential treatment can extend to non-member countries without undermining the objectives of its industrial policy.

The Commission’s proposals have already revealed disagreements between governments favouring a tightly defined European manufacturing base and those seeking to preserve wider commercial partnerships.

Källenius’s intervention strengthens the argument that industrial protection cannot be considered separately from the supply chains on which European manufacturers depend.

The final legislation will influence investment decisions, procurement arrangements and the position of British suppliers within the continental automotive industry.

The outcome will also provide an indication of how far the EU is prepared to accommodate its closest trading partners as it attempts to strengthen European manufacturing against growing competition from China.

Ola Källenius says it will ‘weaken the industry on both sides’ ahead of act intended to counter non-EU competition

Locking the UK out of the EU’s flagship industrial “Made in Europe” legislation would amount to a “deliberate choice” by EU leaders to “hurt” the car industry across the bloc, the head of Mercedes-Benz has said.

Speaking in his capacity as president of the European Automobile Manufacturers’ Association (ACEA), Ola Källenius said such a move would “weaken the industry on both sides”.

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© Photograph: Christoph Steitz/Reuters

© Photograph: Christoph Steitz/Reuters

© Photograph: Christoph Steitz/Reuters

US defense-tech company CHAOS Industries introduced its Vespid interceptor family in Washington on 12 October, as the Association of the US Army (AUSA) annual meeting opened there, the company announced. CHAOS pitches the drones as low-cost defense against small and mid-size drones and one-way attack munitions. The company expects initial production capacity of 12,000 interceptors a year, expandable to 50,000 as demand grows.

The pitch lands as Russia moves its strike drones to jet power. Russia has stopped building the Geran-3, an earlier jet model, and makes about 3,000 faster Geran-4s and Geran-5s a month, Ukraine’s military intelligence (HUR) told Militarnyi in August. In mid-September, Ukrainian President Volodymyr Zelenskyy said two Ukrainian companies had passed combat tests with interceptors against such drones, while 67 were still working on them. Ukrainian defense outlet Defense Express measured the new US drones against exactly that threat.

One to carry, one to launch in batches

The Mk 1 made its first public appearance on 12 October aboard a Forterra MESA autonomous ground vehicle, Army Recognition reported. It fires from tubes on launchers such as the 10-round ISS Aerospace HAL10. It takes midcourse guidance from CHAOS radars or external command systems, then an AI-assisted infrared seeker handles the final approach, the company says. An electric ducted fan rather than a jet engine drives it, which CHAOS says cuts cost and logistics compared with turbojet interceptors.

The smaller Mk 0 is man-portable and needs no operator input once fired, its product page says. Both are rated to reach a target in under 100 seconds, with a listed range of 10+ km. Defense Express called that range a serious weakness that more launchers around a city could offset.

CHAOS lists cruise speeds of 100 m/s (360 km/h) for the Mk 0 and 150 m/s (540 km/h) for the Mk 1. Defense Express said those speeds may be enough to intercept the Geran-4 and Geran-5, which it puts at 340 km/h and 450–600 km/h.

Ukrainian makers say their interceptors already down jet Gerans

Wild Hornets’ Sting interceptors downed several of the slower jet-powered Geran-3s in November 2025. An unnamed Wild Hornets representative told NV, in an interview published on 22 September, that the company’s new interceptor had destroyed about ten Geran-4s and several Geran-5s in limited use. The company plans mass production within a month of finishing combat tests.

On 12 October, former Defense Minister Mykhailo Fedorov said he and Pavlo Yelizarov, commander of Lasar’s Group, had created a new interceptor with troops and engineers. He said it downed two Geran-5s headed for Kyiv.

Crews from Lasar’s Group, which Fedorov has called a National Guard special unit, flew those combat tests, he said. Separately, Fedorov reported in August that a Ukrainian jet interceptor with a top speed above 600 km/h had entered combat testing.

Firms turning crude oil into the ‘workhorse’ fuel stand to gain most despite economic fallout from record prices

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Days after Donald Trump announced a deal to import Russian diesel into the US in an effort to lower soaring pump prices, the world’s energy watchdog has warned that the global fuel shortage will drag into 2027.

Trump’s temporary sanctions reprieve was criticised for offering “too little, too late” to temper the sky high pump prices triggered by the shutdown of war-damaged refineries in the Middle East and Russia – once the world’s second-largest diesel exporter behind the US.

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© Photograph: Martin Meissner/AP

© Photograph: Martin Meissner/AP

© Photograph: Martin Meissner/AP

ArcelorMittal Kryvyi Rih has begun the process of placing its plant in cold shutdown following four Russian missile attacks, the company said on 10 October. The attacks killed six workers, injured more than 18 others, and forced the suspension of primary steel production.

ArcelorMittal Kryvyi Rih is Ukraine’s largest steelworks, so its shutdown adds to the pressure on an industry already hit by Russian attacks and disrupted exports.

ArcelorMittal Kryvyi Rih CEO Mauro Longobardo said the company’s priority was to protect workers and industrial assets. He said the ArcelorMittal Group would remain in Ukraine, but that its assessment was that safe operation was impossible while the war continued.

Workers and the city

As of July, ArcelorMittal Kryvyi Rih and its subsidiaries employed about 17,000 people, local outlet Pershyi Kryvorizkyi reported. On 29 September, the outlet reported that the company had not said how many workers could lose their jobs and was assessing its staffing needs after production stopped. It also said municipal water and heating utilities had about 1,000 vacancies and had been instructed to help ArcelorMittal workers find jobs. The outlet noted that it was unclear whether the vacancies were new and that the announcement did not specify the roles or salaries.

In late September, Kryvyi Rih defense council head Oleksandr Vilkul wrote on Telegram that the city would cut spending and stop a number of projects as tax revenues fell. He attributed the pressure to Russian attacks and the inability to export through seaports, and said several major industrial facilities were idle, including ArcelorMittal Kryvyi Rih and three mining and ore-processing plants.

September steel output down 4.7-fold

Ukraine’s steel production fell 4.7-fold year on year in September, to 131,000 tons, the steelmakers’ association Ukrmetalurhprom said, NV reported. Metinvest chief operating officer Oleksandr Myronenko told Forbes Ukraine on 15 September that the group would declare force majeure on some contracts after Zaporizhstal and Kametstal halted operations.

An expected $1 billion impairment

The ArcelorMittal Group said on 25 September that it expected to record a non-cash impairment of about $1 billion, mostly related to property, plant, and equipment. It also said it had provided more than $700 million in financial support to its Ukrainian business.

The European Union has adopted an unprecedented package of sanctions against Russia’s military-industrial complex, blacklisting 1,569 companies and individuals involved in supplying weapons for Moscow’s war against Ukraine.

The Council measures announced on 12 October target 826 companies and 743 executives. Unlike earlier sanctions targeting political figures, the latest listings reach deeper into the industrial supply chains needed to manufacture missiles, drones, aircraft and ammunition.

Ballistic missile supply chains

EU foreign policy chief Kaja Kallas said more than half the new listings concerned ballistic missile production. The Council identified electronics manufacturers, semiconductor suppliers, radar specialists, navigation equipment firms and producers of explosives.

These businesses occupy positions in production networks that enable Russia to sustain the manufacture of weapons despite restrictions on its access to Western technologies. The Council announcement estimates their combined annual turnover at at least €20 billion and employment at more than 250,000.

The move follows intensive Russian missile and drone strikes against Ukrainian cities and energy installations. European governments increasingly seek to undermine Moscow’s operational capacity by identifying businesses that procure or manufacture components for its armed forces.

Enforcement beyond EU borders

Listed firms face asset freezes, while EU businesses and citizens cannot make funds or economic resources available to them. The named executives also face travel restrictions. Suppliers and financial institutions will need to check commercial transactions for links to sanctioned entities.

The actual impact on Russian output remains uncertain. Businesses with few assets in Europe may experience limited immediate disruption. Moscow has developed alternative procurement channels through third countries, some involving intermediaries that acquire electronics or equipment originally manufactured elsewhere.

Sanctions effectiveness therefore depends on customs intelligence, financial due diligence, international cooperation and the willingness of commercial partners to stop dealing with listed companies. Targeting managers individually is also intended to raise the personal costs of directing Russia’s military production.

A test for Europe’s economic pressure

Precision navigation systems, sophisticated electronics and specialised manufacturing technology remain difficult to substitute rapidly. Nevertheless, listing a supplier cannot by itself prevent components from moving through indirect trading routes.

The sanctions coincide with renewed discussion of a possible halt to attacks on energy infrastructure. Brussels is signalling that negotiations about the war’s conduct need not entail relief from restrictions on Russia’s defence economy.

Whether the measures reduce missile production will depend on changes in procurement and output over the coming months. Their immediate significance is the EU’s decision to extend restrictions beyond the most visible weapons producers into the broader industrial networks sustaining Russia’s war.

The European Union has reached an agreement with China to restrict imports of Chinese hybrid vehicles to 350,000 annually, introducing a significant new barrier to the expansion of Chinese manufacturers in Europe’s automotive market.

The arrangement, confirmed on 12 October, follows months of negotiations between Brussels and Beijing and reflects growing concern about the competitive position of European carmakers.

The import ceiling could reduce Chinese hybrid vehicle sales in the EU by more than half compared with previously anticipated volumes, although the actual effect will depend on demand, product classifications and implementation.

The agreement comes as manufacturers gather for the Paris Motor Show, where the future of European vehicle production, Chinese competition and industrial policy have become central subjects.

China’s Commerce Ministry has presented the outcome as a negotiated arrangement intended to preserve trading relations, while the European side has emphasised the need to prevent rapidly increasing imports from undermining domestic production.

Chinese manufacturers confront a new European barrier

Chinese carmakers have expanded aggressively in overseas markets as domestic demand has weakened. Chinese passenger vehicle exports rose sharply in September, with manufacturers increasingly targeting Europe, Latin America and Asian markets.

Hybrid vehicles have become particularly important because they offer consumers lower fuel consumption without requiring the same degree of dependence on charging infrastructure as fully electric cars.

This has allowed Chinese brands to compete in market segments where European manufacturers retain substantial established production capacity.

The new quota limits the number of eligible Chinese hybrid vehicles permitted to enter the European market each year. According to details of the import restrictions, shipments exceeding the permitted volume would face restrictions at EU customs.

The mechanism differs from a conventional tariff because imports beyond the ceiling cannot simply enter the market by paying a higher duty. Manufacturers and importers will need to consider both delivery costs and the availability of import allocations.

European manufacturers seek protection

The measures arrive amid growing pressure on the European automotive industry, which faces high production costs, expensive energy, competition from Chinese manufacturers and the capital requirements of shifting towards electrified transport.

Companies operating in Germany, France, Italy and other established manufacturing centres must fund the development of new vehicles while maintaining existing factories and employment.

Chinese manufacturers benefit from extensive domestic production networks, considerable scale and access to battery manufacturing capacity.

European policymakers have questioned whether competition takes place under equivalent economic conditions, particularly where Chinese producers receive support from state-directed industrial policies.

Beijing rejects allegations that its export performance results principally from unfair state assistance, arguing that Chinese companies have achieved competitiveness through investment, innovation and efficiency.

The quota represents a departure from the assumption that European consumers will necessarily have unrestricted access to the lowest-priced imported vehicles.

Its economic effects will depend partly on whether European manufacturers can use the additional protection to improve productivity and develop more competitive models.

Will Chinese manufacturers move production into Europe?

Restrictions on imports do not necessarily reduce the presence of Chinese-owned companies in the European automotive industry.

Several manufacturers are already developing production capacity outside China, including within the European Union. BYD’s investment in Hungary is one example of how Chinese companies can pursue access to European consumers through local manufacturing rather than relying entirely on imported finished vehicles.

The new arrangements could strengthen the commercial incentive to expand such operations.

For European governments, Chinese investment presents a difficult calculation. New factories may create employment, increase industrial activity and preserve automotive supply chains, while also expanding the influence of Chinese manufacturers within Europe’s domestic market.

The economic consequences depend on how much research, component manufacturing, battery production and other high-value activity takes place locally.

A Chinese-owned assembly plant using predominantly imported components would provide different benefits from a fully developed European production network.

The British dimension

The debate is also drawing attention to the position of the United Kingdom, whose automotive industry remains closely integrated with European supply chains despite Brexit.

Executives from Stellantis and Renault have supported including Britain within proposed European industrial protection measures, reflecting the importance of UK manufacturing operations to their broader businesses.

Such an arrangement would raise questions about regulatory alignment, trade preferences and the conditions under which non-EU production could qualify for European industrial support.

British manufacturers also face the challenge of Chinese competition, and decisions taken in Brussels could influence investment strategies across the wider European automotive sector.

Protection versus competitiveness

The restrictions may offer European manufacturers additional time to adapt, but they do not eliminate the structural challenges confronting the industry.

Energy prices, labour costs, the availability of batteries and the affordability of new vehicles remain important factors in the competitiveness of European production.

Nor will the quota necessarily prevent Chinese firms from gaining market share through investment, partnerships or vehicles manufactured outside China.

The EU’s approach combines restrictions on imports with the possibility of continued Chinese industrial participation inside Europe.

The outcome will depend on whether European manufacturers use the reduced competitive pressure to strengthen their technological and manufacturing position, or whether the restrictions primarily accelerate the relocation of Chinese-owned production into the EU.

Washington’s proposed energy ceasefire could force Ukraine to abandon one of its most effective means of economic pressure against Russia without securing equivalent concessions from Moscow. Donald Trump’s parallel agreement with Vladimir Putin over Russian diesel raises further questions about whether American energy priorities are beginning to dictate the terms of negotiations over Ukraine.

President Volodymyr Zelenskyy has placed an important qualification on Donald Trump’s proposed energy ceasefire: Ukraine will stop attacking Russian energy facilities only if Moscow stops targeting Ukraine’s electricity generation and distribution infrastructure. Speaking at the Warsaw Security Forum on Monday, 12 October, Zelenskyy confirmed Kyiv’s willingness to accept a reciprocal arrangement while pointing out that Russian attacks had continued after the American president announced that a ceasefire was already in effect.

The sequence of events has exposed a fundamental weakness in Washington’s initiative. On 11 October, Trump announced an immediate energy ceasefire, declaring that Russia and Ukraine had both agreed to suspend attacks on energy infrastructure. Yet Kyiv had not received the agreement’s terms, Moscow had offered no public confirmation, and Russian drones continued striking Ukrainian power facilities, including a combined heat and power plant in Kharkiv.

Zelenskyy’s response was deliberately restrained. Rather than reject Trump’s initiative, he welcomed the possibility of an agreement while insisting that Russia demonstrate its acceptance through its actions. His remarks also exposed the difference between announcing a diplomatic understanding and establishing an enforceable military arrangement.

An unequal exchange

The apparent symmetry of an agreement prohibiting attacks on energy facilities disguises substantial differences between the two countries.

Russia retains an extensive oil-refining industry, producing fuels for domestic consumption, military operations and export. Ukrainian drone attacks on refineries have consequently become an instrument of economic warfare, disrupting production, increasing operating costs and forcing Moscow to divert resources towards protecting strategically important industrial installations.

Ukraine occupies a different position. Its major oil-refining capacity was devastated early in the full-scale invasion, including the Kremenchuk refinery. Russia’s present campaign is concentrated heavily on electricity generation, substations, heating systems and other installations essential to maintaining civilian life and economic activity.

An agreement narrowly focused on oil refineries would therefore protect an important Russian asset while offering Ukraine comparatively little protection. A comprehensive energy ceasefire could be reciprocal, but only if it explicitly covered the infrastructure each side actually possesses and attacks.

Zelenskyy’s insistence on equivalent obligations is consequently more than a negotiating formula. It seeks to prevent Washington from treating attacks on Russian fuel production and the destruction of Ukraine’s electricity and heating networks as interchangeable military activities without examining their respective consequences.

The distinction becomes particularly consequential with winter approaching. A Ukrainian suspension of attacks on Russian refineries could allow Moscow to restore production and rebuild damaged facilities. Unless Russia simultaneously halted attacks on Ukrainian energy infrastructure, Kyiv would surrender an important means of pressure while remaining exposed to further disruption of electricity and heating supplies.

The American pressure campaign

The concern in Kyiv is no longer confined to the proposed ceasefire’s wording. European officials have disclosed that Washington is threatening to restrict military assistance and intelligence sharing unless Ukraine suspends its strikes against Russian refineries.

According to accounts of the American pressure campaign, the threatened measures include suspending the Prioritised Ukraine Requirements List (PURL), the NATO-coordinated mechanism through which European countries finance purchases of American weapons for Ukraine. Reuters was unable to independently verify the reported threats, and the White House had not responded publicly.

If implemented, such restrictions would establish a direct connection between Ukraine’s willingness to accommodate Washington’s energy priorities and its access to essential military support.

This creates an imbalance in the negotiations. Moscow could continue military operations while Kyiv faced the possibility of losing American assistance for refusing an agreement whose Russian obligations remain undefined.

The diesel agreement and its political significance

The ceasefire proposal also needs to be examined alongside Trump’s separate agreement with Putin, announced on 9 October, to increase Russian diesel supplies.

Trump stated that Russia would initially release more than 300,000 tonnes of diesel, followed by another 500,000 tonnes in November and one million tonnes thereafter. Further supplies were envisaged, depending on Russia’s refining capacity.

The US Treasury subsequently issued General Licence 135, authorising transactions involving Russian-origin diesel that would otherwise face sanctions restrictions.

The initial volumes are unlikely to transform international diesel markets. Nevertheless, the agreement gives Washington a commercial interest in maintaining Russian refinery output at precisely the moment Ukrainian attacks are disrupting it.

Trump has an evident domestic incentive to seek lower fuel prices before the American congressional elections on 3 November. Putin, meanwhile, has an interest in preserving Russia’s refining capacity and reopening sanctioned markets.

These interests need not prove the existence of a coordinated political strategy against Kyiv. They do, however, create conditions in which American economic priorities and Russian military objectives could converge.

The possibility becomes more significant when considered alongside Trump’s public criticism of Zelenskyy and his suggestion that Ukraine requires different leadership.

The risk of a diplomatic trap

The most consequential scenario is one in which Washington demands immediate Ukrainian compliance while leaving Russia’s obligations subject to subsequent negotiation.

If Kyiv suspends refinery attacks without obtaining verifiable Russian commitments, Moscow gains relief from a costly Ukrainian campaign. If Kyiv refuses, Washington could present that refusal as an obstacle to peace and use it to justify restrictions on military assistance.

This is a possible negotiating outcome, not an established secret agreement between Trump and Putin. There is no publicly verified evidence that the two presidents arranged the ceasefire specifically to force Ukraine into such a position.

Nevertheless, the combination of the diesel agreement, American pressure over refinery strikes and the premature announcement of a ceasefire creates a credible risk that Ukraine could be required to make concessions before Russia demonstrates any corresponding restraint.

The implications extend beyond Ukraine. European governments financing American weapons through PURL would find their own assistance programmes vulnerable to Washington’s decisions over an energy arrangement negotiated separately with Moscow.

For Brussels, the immediate question is therefore whether European military support can remain dependable if American commercial interests increasingly influence the conditions attached to supplying Ukraine.

Kyiv’s remaining leverage

Ukraine’s attacks on Russian refineries cannot by themselves compel Moscow to end the war. They can, however, impose material economic costs and complicate Russia’s ability to maintain fuel production, exports and military logistics.

Abandoning those attacks without an enforceable agreement would remove pressure from Moscow without ensuring that Ukrainian civilians receive any corresponding protection.

Zelenskyy’s position preserves an alternative: simultaneous, reciprocal restrictions covering electricity generation, heating installations, oil refineries and other specified energy infrastructure, supported by clear verification procedures and consequences for violations.

Whether Washington is prepared to enforce such an arrangement against Russia remains unanswered.

The central danger for Kyiv is not an energy ceasefire itself. It is an arrangement in which Ukraine’s obligations are immediate and enforceable through the threat of lost American support, while Russia’s obligations remain uncertain.

Until that imbalance is resolved, Trump’s initiative risks delivering Moscow protection for its oil industry without securing protection for Ukraine’s energy system.

German industry expects Russian sabotage against the country’s companies to persist and take more forms, the deputy head of the Federation of German Industries (BDI) told Handelsblatt. His warning follows alarms from Germany’s intelligence services, which describe the country as a main target of Russia’s covert campaign in Europe.

Russia keeps striking Ukrainian cities and power plants every day while trying to weaken the European support that keeps Ukraine fighting. Germany is home to arms makers producing with and for Ukraine, so pressure on its companies targets the supply behind Ukraine’s defense.

Industry expects attacks to last and change form

The warning came from Holger Lösch, the BDI’s deputy managing director.

“German industry is preparing for the threat to persist and for attack methods to become more varied,” he told Handelsblatt. “Companies don’t end up in the crosshairs by chance,” he added.

Russian influence and sabotage operations are no longer an abstract scenario, and companies, critical infrastructure, and defense supply chains are already among their targets, Lösch said. Companies now receive more threat warnings, and their cooperation with the authorities has improved significantly, he noted. “What is still missing are joint procedures to quickly derive concrete measures from warnings,” Lösch said, calling the protection of the economy a cornerstone of national security.

German intelligence describes a Russian shadow war

The warning comes a week after a public hearing of the intelligence oversight panel of the Bundestag, Germany’s parliament, on 5 October. There, Martin Jäger, head of Germany’s Federal Intelligence Service (BND), said Russia was waging a shadow war against Germany. “Germany has become a main obstacle to Russian hegemonic power projection in Europe and thus a target of Russian action,” Jäger said. “The danger of attacks against targets in Germany remains real and present,” he warned.

Sinan Selen, head of the Federal Office for the Protection of the Constitution (BfV), Germany’s domestic intelligence agency, told the same hearing that Russia was showing a readiness for sabotage and killings.

German Chancellor Friedrich Merz said on 1 October that Germany was preparing for further hybrid attacks, “including serious ones,” and would respond “quickly and very clearly,” as it did after the drone attack at Leipzig airport.

Drone bombs, arson, and paid saboteurs on German soil

In August, a drone carrying Semtex explosives hit the wing of a Ukrainian An-124 cargo plane at Leipzig/Halle Airport but did not explode. Germany blamed Russia on 1 September, and German Foreign Minister Johann Wadephul said Germany was not at war with Russia but was a “target of war.”

German authorities suspect Russian intelligence of commissioning an arson attack near two Munich defense firms, and a confidential Federal Criminal Police Office (BKA) assessment counted more than 165 suspected sabotage cases in Germany between January and August. The same assessment recorded 747 suspicious drone incidents involving 1,068 drones over critical infrastructure, military sites, and defense companies.

Germany’s Military Counterintelligence Service (MAD) warns that the threat from low-level agents, locals paid small sums for one-off jobs such as arson or photographing military sites, has increased significantly. European intelligence agencies also report that Russia is increasingly targeting defense company executives, including at smaller drone makers, and the BfV has advised some German firms to hire close protection.

As long as Germany keeps backing Ukraine, Russian pressure on its companies is unlikely to ease, and the gap between warnings and action that industry flagged leaves smaller firms, with fewer resources for security, the most exposed.

Intelligence services from five European countries warn that Russia is expanding assassination and sabotage operations against defence manufacturers supplying Ukraine. The threats coincide with an alleged plot against Poland’s prime minister and defence minister, raising concerns about Moscow’s efforts to undermine European military assistance through intimidation and political destabilisation.

European intelligence agencies have warned that Russia is intensifying efforts to assassinate executives of defence companies supplying Ukraine, extending its campaign of sabotage and intimidation into the European military-industrial sector.

According to intelligence assessments obtained from five European security services, Moscow has ordered an expansion of covert operations targeting senior figures at major arms manufacturers and smaller companies producing drones and military components. Germany’s domestic intelligence agency, the BfV, has reportedly advised executives to strengthen personal security, while some manufacturers have already increased protection for senior personnel.

The warnings emerged alongside reports of an alleged assassination plot against Polish Prime Minister Donald Tusk and Defence Minister Władysław Kosiniak-Kamysz. Polish authorities convened an emergency security meeting and subsequently detained a suspect. No connection between the Polish case and Russian intelligence has been established.

Europe becomes Moscow’s principal target

The apparent expansion of Russian covert operations reflects a shift in Moscow’s calculations concerning Western military assistance.

President Vladimir Putin had reason to anticipate that Donald Trump’s return to the White House would weaken American support for Kyiv. Trump repeatedly questioned US military expenditure on Ukraine and advocated a negotiated settlement with Russia. A substantial reduction in American weapons deliveries could have increased pressure on Ukraine to accept Moscow’s territorial demands.

Instead, European governments assumed greater responsibility for sustaining Ukrainian defence capabilities, including financing weapons purchases and expanding domestic production.

The European Union’s €90 billion support programme for 2026–2027 allocates €60 billion to defence procurement and industrial capacity. The EU has also established mechanisms allowing Ukraine to participate in European joint procurement programmes.

Disrupting European manufacturers therefore offers Moscow a means of restricting Ukraine’s military capabilities without directly confronting NATO.

Assassination threats can interfere with procurement even when attacks are never carried out. Large manufacturers can afford extensive security arrangements, but smaller companies producing electronics, drone components and specialised equipment often lack comparable resources.

Intimidation could delay contracts, discourage investment and persuade individual suppliers to withdraw from Ukrainian defence programmes.

Sabotage as an instrument of political pressure

Russia’s alleged interest in targeting defence executives is not unprecedented. In 2024, American intelligence reportedly uncovered a Russian plot to assassinate Armin Papperger, chief executive of Rheinmetall, one of Germany’s principal suppliers of ammunition and military equipment to Ukraine.

As EU Today previously reported, Moscow has also publicly identified European factories involved in Ukrainian drone production, increasing concerns that civilian industrial facilities could become targets of Russian operations.

European authorities have investigated suspected Russian involvement in arson, infrastructure attacks and clandestine networks. An earlier cross-border investigation into alleged assassination and sabotage preparations demonstrated how intermediaries could be recruited to conduct operations while obscuring their sponsors.

Such activity also carries political consequences. Attacks against infrastructure and industrial facilities can reinforce public fears about confrontation with Russia, particularly during elections when parties advocating accommodation with Moscow seek to exploit security concerns.

Poland has already experienced mounting Russian hybrid pressure, including threats to critical infrastructure and information operations intended to aggravate domestic political divisions.

Putin’s strategy against European rearmament

Ukraine’s continuing strikes against Russian refineries and military-industrial facilities have added economic and operational pressures to Moscow’s prolonged war effort. Russia retains substantial military production capacity, but the costs of sustaining the conflict remain considerable.

Interfering with European weapons manufacturing could serve two objectives: restricting Ukraine’s access to equipment and obstructing Europe’s longer-term rearmament.

The Kremlin does not necessarily need European governments to abandon Ukraine formally. Production delays, disrupted contracts and reluctant suppliers could reduce the practical effect of military assistance even while political commitments remain unchanged.

European governments have acknowledged the industrial challenge. In its June conclusions on European defence, the European Council called for accelerated manufacturing capacity, stronger supply chains and closer cooperation with Ukraine’s defence industry.

Russia’s apparent strategy seeks to exploit the dependence of these programmes on private companies and skilled civilian personnel.

The warnings from European intelligence agencies suggest that protecting defence executives, engineers and contractors is becoming part of the continent’s wider security responsibilities.

For Moscow, intimidation offers the possibility of weakening Ukrainian military resistance without an open confrontation with NATO. For European governments, preventing covert operations from disrupting weapons production is increasingly inseparable from their commitment to sustain Ukraine’s defence.

Ukraine’s Defense Procurement Agency has contracted about 5.5 times as many drones of various types in recent months as in the same period of 2025. It is roughly 300% more over the year as a whole, the Defense Ministry said.

Drones are the weapons this war runs on, from short-range strikes to hits deep inside Russia, and Ukraine has raced to build and buy more of them while sparing its troops. The agency contracted for about $8 billion worth of drones in the first half of 2026 alone, double the amount for the same period last year.

The ministry wants to arm the force at every level, Defense Minister Yevhenii Khmara stresses. Deep-strike drones hit targets far inside Russia, while middle-strike drones kill enemy drone crews and burn logistics and command posts, lowering the risk to Ukrainian soldiers.

“Technology and having enough of these systems raise combat effectiveness and at the same time reduce the risks for our soldiers,” Khmara said.

FPV drones lead the surge

The sharpest growth is in FPV drones, the cheap first-person-view quadcopters that do much of the killing on the front. Contracting for them in 2026 already exceeds the total for all of 2025 by 54%, and deliveries have risen almost 3.7 times, the ministry notes.

International support and the scaling of Ukraine’s own defense industry made the jump possible, Khmara adds. Much of the buying now runs through the DOT-Chain Defense marketplace, where units select what they need, and the agency handles contracts and logistics, cutting the average delivery time for in-stock items to 9 days.

Making supply predictable

The ministry is trying to make deliveries steadier, Khmara explains. It is aligning the front’s needs, purchase planning, and the production capacity of the Ukrainian industry, making supply more predictable.

Predictable contracting lets manufacturers build their production lines step by step, plan logistics and order components in advance, he says. The ministry frames the push as a larger order book for the domestic industry and a way to scale the solutions that work in combat.

Ukraine wants to build more weapons at home while making it easier to draft the people who build them. Kyiv has proposed cutting the draft-exemption quota for defense-industry enterprises from 100% of their workers to 85%, while the Ukrainian Council of Arms Manufacturers says the limit should stay at the previous level for qualifying critical plants.

The change would strip the draft shield from 15% of the workers at plants the Defense Ministry has deemed critical to the economy. Those are the people who set production volumes, delivery dates, and new designs, the council argues, so losing them would hit output just as Ukraine pushes to make more of its own weapons.

The draft resolution has already been sent to the Cabinet of Ministers for approval.

“We consider that the proposed reduction of the limit does not account for the staffing needs of defense production,” the council says.

A workforce that takes years to build

Ukraine’s defense industry is still growing, with new plants, expanding capacity, and new technologies, the council adds. Raising the share of Ukrainian-made weapons in the forces, localizing components, and cutting reliance on imports all require more specialists, not fewer.

These teams are built over the years, the manufacturers add. Companies invest in finding and training people who master specific technologies and production processes, and keeping them is what lets firms plan expansion and take on new commitments to the military.

Uncertainty at the worst moment

Cutting the exemption limit would add uncertainty, just as the state expects producers to raise output. The fallout could affect both manufacturers and military units awaiting their weapons.

The council urges the Economy Ministry to drop the cut to 85%and asks the Defense Ministry and the Cabinet to maintain exemptions of up to 100% for qualifying defense workers. It offers to share data on the industry’s staffing needs and help assess how the change would affect defense orders.

The reservation rules must reflect the growth of the defense industry and Ukraine’s need for more of its own weapons, it concludes.

Según revela Instituto Alemán de Economía (IW), durante la primera mitad de la década de 2020-2025, la economía germana creció un 0,2% anual y esa tasa se debió mayormente al gasto público, el cual, solamente en el segundo trimestre del 2026, fue superior a la media anual de 2019.

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Lo que significa que se diluye la “Alemania como motor económico europeo” de la que tanto se habló en el último medio siglo.

El empresariado invirtió muy poco en estos años y en el entorno productivo y de realce económico nacional ha caído drásticamente.

El mismo gobierno federal reconoció, a principios de este mes, que la situación de crecimiento es “precaria” y, en los círculos cerrados del empresariado escasean los vaticinios halagueños para el 2027 y 2028.

Creditreform informó que 1 de cada 3 empresas está muy endeudada y que las inversiones retrocedieron a su rango de 2013.

Durante el pasado mes de abril, más de 2 mil empresas quebraron, destacándose entre estas empresas las abocadas al transporte, la logística, la hotelería y la cervecería.

Klaus Wohlrabe, jefe de estudios del Instituto Ifo de Investigación Económica, declaró que todavía no se vislumbra una recuperación real para el mercado laboral y “Los despidos continúan en la industria manufacturera y el comercio”.

Por su parte, Rolf Bürkl, experto en consumo del NIM, dijo que “La mayoría de los hogares prevé que los altos precios de la energía reduzcan su poder adquisitivo” y, en consecuencia, “se muestran más escépticos sobre sus perspectivas de ingresos para los próximos doce meses”.

El agricultor e influencer, Hannes Kuhnwald («Landwirt aus MV»), pronosticó que se avecina una crisis en la agricultura ya que “Cada vez cierran más explotaciones. Y las pequeñas son las primeras en verse afectadas. Ahora, las grandes empresas se benefician de ello. Y muchas corporaciones también”, afirmando que las explotaciones pequeñas y medianas no pueden competir con las compañías grandes y que, por lo tanto, la clase política debería aplicar medidas sensatas para proteger de la pauperización, la quiebra y la exclusión económica a los pequeños y medianos productores agrícolas.

Dentro de la misma Alemania hay quienes se quejan de la forma en que llegan los fondos provenientes de la UE, pidiendo, como una de las soluciones más rápidas, que dichos fondos lleguen hacia abajo de una forma más equitativa.

Simultáneamente, se produce, en esta segunda mitad del 2026, un descenso pronunciado en las ventas del sector minorista, cuyos niveles son, según consignas las estadísticas más fiables, de mayor caída en los últimos cinco años.

Hay negocios de los más consolidados que, debido a la situación, están llegando al límite.

El Grupo Theo Müller -líder de la industria alimentaria- anunció, en esta semana, que cerrará dos de sus plantas más importantes con la consecuencia de cientos de empleados que serán despedidos.

Asimismo, en entorno de Volkswagen seguirá convulso en lo que resta de este año y en 2027.

Publicado originalmente por  Geopolítica rugiente

Ukraine, which long kept its weapons at home, is now clearing its arms makers to sell abroad. Its Commission on Export Control has granted 18 Ukrainian companies permission to send their finished weapons abroad and has processed more than 400 export applications, with over 90% approved, the National Security and Defense Council says, citing commission head Davyd Aloian.

Ukraine now produces far more weapons than it can afford, with defense production growing from about $1 billion a year at the start of the invasion to a projected $55 billion in 2026.

The exports are reportedly conducted under the Drone Deals framework that President Volodymyr Zelenskyy unveiled in April, which allows controlled sales of surplus weapons to partner countries while the Defense Ministry and General Staff retain first claim to everything the front needs. Some categories already run up to 50% beyond what Ukraine can use or finance.

From a stalled commission to 18 approvals

The commission’s work had been halting. It resumed in February after an eight-month freeze and issued the first permits then, and its updated membership has been working since, Aloian notes.

Building partnerships abroad

Aloian framed the goal as scaling Ukrainian technology rather than one-off deals. The state wants domestic producers to expand abroad while partners get working solutions, he says, and is open to dialogue with the defense industry to fix problems as they arise.

Earlier, an industry group that represents more than 400 companies warned in September that the mechanism was choking. A new 20-to-30% fee on export permits priced Ukrainian goods out of the market, it said, and a joint-production program had stalled with hundreds of foreign bids pending.

Euromaidan Press cannot verify whether the Commission on Export Control has taken the issue into consideration.

The council recently met a UK Defense Ministry delegation to discuss closer cooperation, including a Drone Deal, an anti-ballistic coalition, and joint production, Aloian adds. Reaching foreign markets enables producers to attract new orders and investment, scale up, and build long-term partnerships.

Two Ukrainian defense-tech firms, The Fourth Law and Odd Systems, have joined forces to mass-produce thermal imaging sensors in Europe and the US, The Fourth Law told Militarnyi. The goal is to wean Western militaries off foreign suppliers, chiefly China, for the core part of every thermal camera.

Amid Russia's daily attacks, Ukrainian drone makers have been shifting production to allied countries. Linza and Zoom drones are now built in Germany, and another top manufacturer has taken its technology to Canada and Finland. Sensor plants would move a core component west, not just finished drones.

A Western answer to Chinese sensors

The project, called Project Foundation, will build long-wave infrared sensors, known as microbolometers. These chips register heat, so a camera can pick out a person or vehicle at night or through smoke. The aim, The Fourth Law said, is to "ensure the sovereignty of Western countries in the field of thermal imaging technology."

Plants in Europe and the US from 2027

The project will run two sites, First Foundation in Europe and Second Foundation in the US, from a headquarters in Eindhoven, a Dutch semiconductor hub. Mass production is due to start in 2027. Within three years, the partners want to quadruple Europe's output of these sensors and double America's.

Why Europe's supply isn't enough

Ukraine's front line burns through sensors faster than Europe can make them. "Europe currently produces less than 500,000 such sensors per year, while Ukraine consumes this amount in about five months," Odd Systems co-founder Yaroslav Azhniuk said in February, when he first announced plans for a plant able to make one million sensors a year. European sensors cost about five times as much as Chinese ones and are hard to buy at all, because Europeans need them too, he added.

Factories working for Ukraine abroad have already become sabotage targets. In March, an arson attack in Pardubice, Czechia, destroyed nearly all the production capacity of a plant making drones and thermal sights for Ukraine's army. Czech investigators are looking into a possible Russian trail behind the attack.

A drone attack overnight on 8 October caused a fire that hit part of Yandex's data center in Sasovo, Ryazan Oblast, about 580 km from Ukraine, and the site is fully stopped, the Russian tech company told Russian media. The data center sits on the grounds of Sasta, a sanctioned machine-tool plant, Russian outlet Astra said, citing Wikimapia data. Astra's OSINT analyst found from eyewitness footage that the fire hit the plant.

Since late September, Russia has been striking data centers in Kyiv that keep Ukraine's internet and online services running. Now a drone attack has stopped one of the data centers that Russia's largest tech company relies on.

Yandex counts the damage

Yandex warned that some services may be unavailable, while its core services kept running and no one was hurt. Ryazan Oblast Governor Pavel Malkov claimed two drones were downed, a roof caught fire at an enterprise in the Sasovo district, and windows were blown out in several homes.

The power failure took down a wide range of Yandex Cloud infrastructure, including computing capacity, networks, data storage, databases, Kubernetes, cloud services, AI, and security and monitoring systems, Ukrainian outlet ZN.ua reported, citing Exilenova+.

Ukrainian monitoring channel Exilenova+ reported that the plant was hit, without naming an attacker. The channel said Sasta, which claims a place on Russia's register of defense-industry companies, makes computer-controlled machine tools, including five-axis machining centers, and previously supplied the Tactical Missiles Corporation (KTRV) and Roscosmos. The plant's value to the arms industry lies in machines that cut precision parts, not in finished weapons, the channel said.

Citing Exilenova+, Militarnyi reported that Ukraine's Defense Forces hit the plant. It also linked Sasta to Iskander missile supply chains. No source has said whether the plant or the data center was the target, and no Ukrainian official has claimed the Sasovo strike. Sasta has been under US sanctions since November 2023, UK sanctions since February 2024, and Ukrainian sanctions since April 2025, a sanctions database shows.

Salavat: Kyiv reports a hit

Ukrainian forces hit the Gazprom Neftekhim Salavat complex in Bashkortostan, about 1,380 km from the front line, causing a fire, Ukraine's General Staff said. It said the complex processes up to 10 million metric tons of hydrocarbons a year and serves Russia's armed forces. Its key unit, the ELOU-AVT-6 primary oil refining unit launched in 2012, can process 6 million metric tons a year, Militarnyi reported. Astra's analyst placed the fire a few kilometers outside Salavat, possibly near the refinery.

Salavat oil refinery moment of attack pic.twitter.com/bUxuRshSK1

— Exilenova+ (@Exilenova_plus) October 8, 2026

Salavat Mayor Marat Zagidullin claimed that debris from several drones fell in the industrial zone that morning and started a fire.

"The enterprise continues to work," he said.

Astra noted earlier hits on the complex on 24 September 2025, on 14 July 2026, when refining fully stopped, and on 13 August 2026.

Russia's strikes on Ukraine's data centers

Russia has repeatedly hit data centers in Kyiv since 23 September. Strikes hit the COSMONOVA data center twice, the second time knocking it out, and the Parkovyi data center stopped working completely on 1 October after a series of strikes. In early October, Russia destroyed the dline.ua data center in Kyiv.

A company of unmanned ground systems from Ukraine's 92nd Assault Brigade used the robotic system Frodo to evacuate a wounded soldier, Frontline Robotics told Militarnyi on 7 October.

Ground robots are being used to evacuate wounded soldiers from the drone-dominated "kill zone," a band tens of kilometers deep on both sides of the front line. About 112,000 logistics and evacuation missions by ground robotic systems were recorded from January through August 2026, according to Ukraine's Defense Ministry.

Operator credits speed and suspension

The operator, callsign Tango, named speed and the ability to perform complex maneuvers as the robot's main advantages, according to Militarnyi. The unit also praised Frodo's adaptive suspension, which it said smoothed out rough terrain and kept the wounded soldier's transport relatively comfortable.

What Frodo can carry, and how far

The robot has a 6×6 wheel layout with independent suspension, adjustable ground clearance of 170–330 mm, and a top speed of 40 km/h. Its recommended payload is 200 kg, and its maximum is 400 kg, according to Frontline Robotics. The company lists its range as 150 km on asphalt and up to 90 km over rough terrain with the recommended load. Frodo supports several communication channels, and one person can swap its batteries in about two minutes.

Frodo had passed the Defense Ministry's codification and could carry remote-controlled modules such as the Burya turret, Militarnyi reported on 30 September.

The 92nd Brigade had used ground robots to evacuate wounded soldiers before. In September 2025, the brigade evacuated three wounded soldiers using a ground robot, according to Militarnyi.

Russia has shown a drone interceptor built on the Alazan, a civilian anti-hail rocket, Militarnyi reported. The sample went on display at a weapons exhibition that Russian dictator Vladimir Putin toured at the Chebarkul training range in the Urals on 2 October.

Ukraine now sends drones at Russia by the hundreds, by Moscow's own count. Russia's Defense Ministry claimed its air defenses intercepted nearly 900 overnight into 6 October. Russia's missile-based air defense was built to repel aircraft raids and a few cruise missiles, not swarms of low-flying drones.

In May, Ukrainian intelligence said Russia was adding four regiments, 24 battalions, and 162 batteries to counter Ukrainian strike drones. The converted Alazan, which Militarnyi calls an anti-drone system, is one more piece of that search. Meanwhile, the commander of Ukraine's Unmanned Systems Forces, Robert Brovdi, said his forces struck 300 Russian air-defense assets between January and 19 September.

From hail reagent to shrapnel

Based on the size of the sample on display, the interceptor builds on the Alazan-2M or Alazan-6 series, Militarnyi assessed. The outlet put the stated cost at up to $12,000 per unit but did not say who named the figure. In civilian service, the rocket flies about 10 km, climbs up to 8 km, and carries about 0.5 kg of reagent. For air defense, the developers plan to replace that reagent with a fragmentation warhead.

Militarnyi's analysis of the published photos describes the front end as a steering assembly: four cruciform deflector fins, probably paired with a seeker or a fuze. At the rear sit folding stabilizers and the open nozzle of a solid-fuel motor, held in a metal cradle.

One sample among 300 exhibits

The Kremlin's account of the visit lists more than 300 weapons on display, including interceptor drones, but does not mention the rocket. Propaganda channel Russia 1 aired the interceptor in its report from the visit, and the Kremlin pool of state news agency RIA posted photos.

France and Germany are at odds over how the European Union should define European production under its emerging industrial preference rules, with Paris favouring a narrow EU-only system while Berlin wants trusted trade partners including Britain, Canada and Japan to remain eligible.

France and Germany have reopened a fundamental dispute over the European Union’s “Made in Europe” industrial policy, this time over the question that will determine how far-reaching the programme eventually becomes: which countries should qualify as European suppliers.

The disagreement centres on the Industrial Accelerator Act, under which the EU wants to use subsidies and public procurement to strengthen domestic manufacturing and reduce dependence on Chinese production in strategic sectors.

France is pressing for a restrictive definition centred on manufacturing within the EU’s 27 member states. Germany favours a broader approach that could extend preferential treatment to countries with close trade agreements or reciprocal industrial relationships with the Union.

That could bring Britain, Canada, Japan and potentially Turkey within the system rather than treating their products in the same way as goods from China and other outside suppliers, according to reporting on the Franco-German dispute.

The dispute has important consequences because “Made in Europe” is intended to influence how large amounts of public money are spent.

The Industrial Accelerator Act is designed to introduce European-content requirements into selected subsidy schemes and public contracts in sectors including electric vehicles, batteries and clean technology. The underlying objective is to ensure that European public spending supports European industrial capacity rather than increasing dependence on imported technologies.

EU Today has followed the argument since the proposals began taking shape. In February, it reported that the Commission was preparing local-content rules for strategic technologies. The debate has since moved from whether such preferences should exist to how broadly “European” should be interpreted.

Paris wants the benefits concentrated inside the EU. The French position reflects concern that allowing manufacturers in countries with EU trade agreements to qualify could dilute the purpose of the scheme. If access is too broad, the argument runs, public procurement may do little to increase production or employment within the Union itself.

Germany is more cautious about creating a closed EU system. Its manufacturing economy is embedded in supply chains extending across Europe and into neighbouring markets, including Britain and Turkey. Berlin has therefore argued for a “made with EU” approach under which trusted trade partners could participate if their markets also provide reciprocal access to European industry.

That disagreement has become increasingly important for Britain. British manufacturers, particularly in the automotive sector, remain closely integrated into continental production networks despite Brexit.

A strict EU27 definition could therefore produce situations in which components made in Britain count as foreign content even when they are incorporated into vehicles assembled inside the Union.

France and Germany had appeared to be moving towards a broader industrial compromise last week. Their negotiations combined the “Made in Europe” question with disagreements over vehicle-emission rules and the future treatment of combustion-engine technology. The latest discussions show that one of the hardest questions remains unresolved.

There is also concern among some EU governments that an overly broad system could create routes for companies from countries such as China to obtain favourable treatment indirectly.

The argument mirrors a wider change in EU economic policy. Supply disruptions, Russia’s war against Ukraine and China’s dominance of several strategic manufacturing sectors have pushed Brussels towards a more interventionist approach.

France sees public purchasing power as an instrument for rebuilding production specifically within the Union. Germany is seeking greater flexibility for supply chains involving trusted partners and appears more concerned about the trade consequences of drawing the boundary too tightly.

For Brussels, the problem is now practical rather than theoretical. The narrower the definition, the more industrial support remains inside the EU; the broader it becomes, the easier it is to preserve existing supply chains and relations with allies.

Russia's Kalashnikov concern has met its annual arms contract. The top producer of small arms has announced it delivered a batch of classic 7.62mm Dragunov sniper rifles to a Russian Security Forces customer and fully met its 2026 contract on time

The delivery shows how little the sanctions regime slows Russia's arms maker. In February 2026, Ukraine's Defense Intelligence said that nearly half of Kalashnikov's plants were still not subject to sanctions by any coalition country. Eight months later, the concern reports a full year's order delivered on schedule.

"The items were shipped on the set deadline, the obligations under the 2026 contract fully met," the manufacturer said.

A rifle in service for six decades

The weapon in that batch is not new. Designed by Yevgeny Dragunov between 1958 and 1963, the Dragunov sniper rifle entered serial production at the Izhevsk machine-building plant in 1963, so in 2026, it has remained in serial production for more than 60 years.

The self-loading 7.62mm rifle is meant to hit personnel and unarmored targets at ranges up to 800 meters, the concern said. It uses gas-operated automatics with a short-stroke piston and a gas regulator, and can fire any 7.62x54R round, though sniper ammunition yields the best grouping, according to the maker.

Sanctions chase a moving network

The sniper rifles are only one line in Kalashnikov's output. Russia's defense industry has leaned heavily on refurbishing Soviet-era armor as newer reserves run low, with Ukraine's intelligence reporting in June 2025 that Russia had begun deploying 1960s-era T-62 tanks.

The restoration work was centered primarily at the 103rd Armored Repair Plant in Atamanovka, Trans-Baikal Territory of Siberia. Ukrainian intelligence documented the transfer of 21 T-62 tanks from the eastern region to the western part.

Small arms are a different line of production, built new rather than pulled from storage. That is why a 1963 design keeps rolling off the line while the sanctions net, as Ukraine's intelligence describes it, still has holes.