Europe is funding Ukrainian weapon production due to its capacity constraints.

European allies, struggling to produce enough weapons for Kyiv’s war effort, are taking a new approach: giving Ukrainians money to do it themselves.

Under the new approach, Europeans are funding government contracts with Ukrainian weapons manufacturers, including the production of missiles and drones capable of striking Russian territory. Kyiv tells its allies which companies to work with and what weapons to buy, and European officials can vet manufacturers before agreeing to deals.

Proponents of the approach argue that Ukrainian defense companies can produce many systems faster and cheaper than Western suppliers. Ukrainian firms are also adapting equipment to the ever-changing needs at the front while strengthening their defense industry for the future, freeing up European capacity to build up their own weapons stockpiles.

The so-called Danish model is attracting more and more attention and interest from other countries: Norway, Sweden, Lithuania, Germany, the Netherlands. Denmark has already committed about $680M to Ukraine’s military-industrial complex.