A N A LYS I S Defence Industry in Central Eastern Europe The Defence Sector in Central and Eastern Europe – The Hungarian Case Tamás Csiki Varga The Hungarian defence ecosystem has been undergoing a fundamental transformation since 2016, when the compre ­hensive armed forces development program(originally dubbed“Zrínyi-2026”) was initiated. The program consti ­tutes not only a technology upgrade in equipment, but the adoption of suitable modern doctrines and operating pro ­cedures, as well as adapting the workforce and service(wo) men’s training to the use of the new hardware and soft ­ware. To underpin this modernisation effort, the national defence technological and industrial base(NDTIB) has also been undergoing a similar upgrade and transformation in its functioning with the aim of creating and/or strengthen ­ing certain pillars of the defence industry, which have been weak or non-existent in Hungary since the Cold War. These include the assembly, production and future development of small arms and light weapons, artillery and ammuni ­tions, armoured vehicles, drones, as well as radars, sensors, and related space technologies. The transformation is driv ­en by a strong tie-in to major European arms manufactur ­ers’ networks(Rheinmetall, Krauss-Maffei Wegmann, Air ­bus), and the acquisition(Hirtenberger, Aero Vodochody) or establishment(Lynx, Gidran, ZalaZone) of new defence in ­dustrial plants. This paper offers an overview and assess ­ment of the development of the Hungarian defence indus ­try throughout the past decade, outlines the current situa ­tion, and identifies prospects and challenges. First, introducing the strategic framework of the comprehensive armed forces development program identifies the place and function of the defence industry in these processes, followed by conceptualising the model of operation. Then, defence industry landscaping shows current capabilities in the field through an overview of the defence industrial eco ­system, specifically the eight defence industrial clusters and the innovation potential currently being developed in Hungary. The Strategic Framework The planning and preparation for the development of com ­prehensive defence capability took place around 2015 in full confidentiality in a“black box” manned by the Chief of De ­fence Staff, the Ministry of Defence, and the Prime Minis ­ter’s Office, and transparency has remained limited ever since. The Homeland Defence and Armed Forces Develop ­ment Programme was formally initiated in 2017(Decree 1298/2017), later underpinned by a(non-public) Defence In ­dustrial Strategy in 2019. The 2020 National Security Strate ­The Hungarian Case 1