A N A LYS I S Defence Industry in Central Eastern Europe The Romanian Defence Sector: An Analysis of Industrial Capacity, Fiscal Challenges, and the Potential for European Cooperation Claudiu Degeratu 1. The Romanian Defence Sector: Context and Trajectory The New Geostrategic Imperative in the Black Sea Region Romania’s defence sector is in the midst of the most pro­found and urgent transformation since the country’s inte­gration into Euro-Atlantic structures. The European security environment, altered by Russia’s full-scale invasion of Ukraine in 2022, served as a powerful catalyst, validating Bucharest’s long-standing strategic assessments and requir­ing a complete review of its defence posture(MApN, 2020; Stockholm International Peace Research Institute, 2018). Romania’s official position identifies the Russian Federation as a revisionist actor that uses hybrid warfare to undermine the European order, with the Black Sea region being an area of critical strategic importance and vulnerability (CSAT, 2020; Binnendijk et al., 2020). In response, the government followed a two-pronged strategy: the rapid modernisation of the Romanian Armed Forces to achieve full interoperability and credible deter­rence within NATO, and the parallel revitalisation of the nation’s Defence Technological and Industrial Base(DTIB) (MApN, 2020). This strategy is fuelled by a baseline policy decision to increase the defence budget to 2.5% of GDP from 2023 onwards, a significant increase from the previous target of 2% set in 2015(Center for European Policy Analy ­sis[CEPA], 2020; GMFUS, 2024). Although the execution and absorption of these funds have faced challenges, the commitment signals a clear and sustained political will to allocate resources to the country’s defence ambitions. The Romanian Defence Sector 1