Defence Industry Transformation and EU and NATO Enlargement The Choices of Central Europe

The defence industry was one of the pillars of the classic command economysystem in Central Europe. Since the early 1990s the sector has gone throughdramatic changes. It was radically downsized, reorganized and restructuredaccording to the needs of the emerging new socio-economic systems. One of themajor factors that shaped this adjustment was the enlargement of NATO and theEuropean Union and the prospect of integration into these two organizations. Themilitary establishments and defence industries became principal actors in theintegration process, which helped them to acquire new economic resources andpolitical legitimization. At the same time, integration presented unexpected newchallenges and constraints for the restructuring defence industry in the region.This report describes how the defence industry adjusted to the changed politicaland economic environment in both the domestic and international context. Thecomparative analysis of the post-cold war experience of six Central Europeancountries - Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia,which joined in the first two waves of enlargement - provides valuable lessonsfor other countries in their processes of socio-economic transformation.