How we cee it. – June 2025 Digest

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Week 23

Ukraine Destroyed Russia’s Bombers with Cheap Drones and Ingenuity

Ukraine rewrote the rules of warfare on Sunday with a bold mission deep inside Russian territory.

Operation Spiderweb, a coordinated drone assault, struck four air bases, some thousands of kilometers inside Russia, targeting heavy bombers.

Since the start of Russia’s full-scale invasion, its bombers have launched mass missile strikes on Ukrainian cities, especially energy infrastructure, causing blackouts, deaths, and injuries. These aircraft operate from distant bases, beyond the reach of Ukrainian air defenses and Western-supplied missiles.

According to Ukraine’s SBU, the drones were smuggled into Russia, hidden in the roofs of wooden modular cabins, then trucked to the targeted bases by unwitting Russian truck drivers. Once there, the roofs retracted remotely, and more than 100 drones launched toward their targets.

Ukraine deployed a hybrid model of drone warfare, blending remote human control with elements of autonomy and likely AI-assisted functionality. While not fully autonomous, available evidence suggests AI-supported flight stability and precision targeting.

Drones were likely pre-programmed to launch from trucks, with operators taking control via Russian mobile networks, including 4G and LTE, enabling real-time video and command inputs over long distances. This allowed Ukrainian operators to manage the mission from outside Russian territory, eliminating the need for on-site ground control.

Although independent damage assessment is not yet available, the SBU claimed the operation hit over 40 aircraft, some nuclear-capable, across four airfields. If the numbers are true, this would mean that Russia lost a third of its cruise missile bombers worth $7 billion in one day. They were destroyed with drones worth just a couple of hundred dollars each.

New President, New Uncertainty

Poland’s presidential election has ushered in a new phase of political uncertainty. Karol Nawrocki, a nationalist aligned with the Law and Justice (PiS) party, narrowly defeated pro-EU candidate Rafał Trzaskowski, dealing a significant blow to Prime Minister Donald Tusk’s centrist coalition. Nawrocki’s victory threatens to stall Tusk’s reform agenda, particularly judicial changes crucial for unlocking billions of euros in EU funds. With the president’s veto power, Nawrocki can obstruct legislation, potentially leading to prolonged gridlock and jeopardizing Poland’s pro-European trajectory. In response, Tusk has called for a parliamentary vote of confidence on June 11 to reaffirm his government’s mandate amid growing political tensions.

A Crazy Crypto Scandal in the Czech Government

Tomáš Jiřikovský ran the largest darknet drug marketplace ever uncovered in the Czech Republic. After serving nine years in prison for embezzlement and drug trafficking, he was released in 2021.

Earlier this year, a court ordered the return of his seized electronics, including a bitcoin wallet now worth over 3 billion crowns (~€120 million).

Then came the twist: Jiřikovský, through his lawyer Kárim Titz—an acquaintance of Justice Minister Pavel Blažek—offered the ministry 30% of the bitcoin as an act of goodwill.

Blažek accepted the offer, thereby legitimizing the funds, despite their highly suspicious origin.

The bitcoin affair led to Blažek’s resignation and prompted Prime Minister Petr Fiala to convene the State Security Council.

Nippon’s U.S. Steel Deal Adds New Safeguards — What It Means for Slovakia

Nippon Steel’s takeover of U.S. Steel is moving forward under a new agreement that gives the U.S. government a so-called “golden share,” allowing it to veto key decisions. The deal is meant to ease national security concerns, but it could also have implications for U.S. Steel Košice, the major Slovak steel plant we wrote about earlier. The factory, a major employer in eastern Slovakia, has struggled financially, and it wasn’t clear whether it would survive under new ownership. While the golden share doesn’t guarantee anything, it offers a new layer of protection that could favor keeping strategic assets like Košice running.

Week 24

Slovak Defense Shopping Spree Raises Eyebrows

Since 2023, Slovakia’s Ministry of Defense has signed new procurement deals for weapons and military gear worth €1.8 billion—most of them under the leadership of current minister Robert Kaliňák.

According to an analysis by the Ján Kuciak Investigative Centre in collaboration with the Stop Corruption Foundation, the figure represents more than a third of the total defense investments made by previous Slovak governments over a 12-year period from 2010 to 2022.

Three out of the five largest contracts under Robert Fico’s fourth government have gone to firms linked to the Czech arms-manufacturing Strnad family. The biggest, worth hundreds of millions of euros, were awarded non-transparently and without tenders, under the label of “strategic investments.”

The surge in military spending stands in stark contrast to the government’s public messaging, which leans heavily on “peace” rhetoric and consistently downplays both the threat posed by Russia and its war crimes in Ukraine.

For Prime Minister Robert Fico and Defence Minister Kaliňák, there is political calculus at play: around 30% of their party Smer’s voters are opposed to rearmament.

Meanwhile, Defence Minister Kaliňák has quietly assembled a staggering €6 billion procurement list, also largely outside of public tenders or strategic defense reviews. The list includes everything from VIP jets and used Black Hawk helicopters to Israeli-Indian missile systems, tanks, and military hospitals.

Critics warn that these opaque purchases could lock Slovakia into a rigid defense budget for at least two election cycles. A significant portion of the contracts is again expected to flow through companies linked to Czech arms magnate Michal Strnad, whose firms—including Tatra and CSG—maintain strong ties with both Slovak and Hungarian political elites.

The potential acquisition of twelve L-39 Skyfox jets from Czech aircraft manufacturer Aero Vodochody further illustrates the growing overlap between Slovak defense procurement and Hungarian political-business interests. Aero Vodochody is now co-owned by Oszkár Világi—a key Slovak-Hungarian businessman tied to energy giant MOL and football club DAC—alongside Hungarian oligarchs close to Prime Minister Viktor Orbán.

Romania Weighs a Tax on Financial Transactions

The Romanian government is discussing a new tax that would add a commission of 1 to 3 lei (€0.2-€0.6) every time bank clients use their cards to pay a bill or make a bank transfer.

The measure is part of a broader fiscal consolidation package aimed at reducing the state deficit from last year’s sky-high 9.3% to 7% this year.

What could go wrong? Romanian politicians might want to look at Slovakia, which introduced a similar tax in January this year. The tax has also been adopted in Hungary.

In Slovakia, a 0.4% fee, capped at €40 per transaction, applies to all businesses, with the first payments collected in April.

The European Commission has already issued a warning about the damage this tax is doing to the business sector in Slovakia.

When the tax came into effect, banks began displaying it clearly in their apps for every business customer. The measure proved so unpopular that the Slovak government is already pushing amendments to exempt self-employed individuals and SMEs with annual turnover below €100,000.

The cash economy has come roaring back, with nearly half of Slovaks saying they’ve been avoiding card payments since the tax was introduced. Paying with cash in cafés and restaurants has become something of a solidarity statement towards SMEs.

Reebok’s Czech Pricing Fail Was Too Good to Be True

Shoppers in Czechia were treated to what looked like the deal of the summer. Reebok’s online store mistakenly listed prices in euros but charged in Czech crowns, effectively selling €100 sneakers for just €4 (100CZK). While customers rushed to place orders, the company quickly canceled them, citing a pricing error. Reebok had a choice: lean into the mistake and score love-brand points, or hit cancel on all transactions. They chose the latter — and with that, maybe missed a rare viral marketing moment.

Week 25

Ukraine Pushes Forward on U.S. Minerals Pact

Dobra Block of Lithium Ore.. Source: Ukrainian Geological Survey

Ukraine has taken its first concrete step to activate a landmark minerals deal with the United States, according to the New York Times. This week, the government began preparing a tender to open up the Dobra lithium field to private investors. Among those eyeing the deal is a consortium backed by Trump ally Ronald Lauder and a U.S. government–linked energy investment firm, TechMet. The project would be the first under a U.S.-Ukraine arrangement that splits mineral revenues through a joint investment fund, framed by Trump as a way to “repay” past American aid.

Kyiv hopes this early move demonstrates to Washington that it can deliver on strategic partnerships. The minerals fund is part of a broader effort to draw American capital into Ukraine’s critical industries. While the country holds massive reserves of minerals like lithium, titanium, and graphite, most of them won’t be operational for a decade or more. This led Ukrainian officials to also pitch the country’s booming defense industry, which is one of the most cost-efficient in Europe, as a faster route to mutual returns.

For Central and Eastern Europe, Ukraine’s pivot from battlefield aid to industrial partnership is worth watching. As global powers realign supply chains and re-evaluate their dependency on China, Ukraine is offering itself as a long-term alternative — if investors can bear the risks.

The Israel-Iran War: A Blessing for Kremlin’s Murder Campaign?

Israel’s strikes on Iran could become a blessing for the Russian war machine- and a threat to Ukraine, together with the rest of Europe.

The clue lies in oil prices. Ever since Donald Trump launched his on-again, off-again tariff policy, the price of the black gold, dropped to its lowest level since the pandemic.

This hurt the Russian economy, which is heavily dependent on crude oil revenues: If the price of Urals crude oil exceeds $60 per barrel, Russia’s National Welfare Fund is replenished through additional taxes. If the price falls below that threshold, funds from the reserve are used to cover the budget deficit.

After the EU imposed another round of sanctions against Russia in May, the price of Urals crude dropped to $55 a barrel—the lowest level in five years. Since then, prices have risen amid growing geopolitical tensions, with the biggest jump recorded on Friday following the escalation between Israel and Iran.

For Russia’s war machine, further instability in the Middle East could be a lifeline. But for Ukraine’s defense—and the security of the European continent—it may prove to be a serious setback.

The EU Uses Whalebone to Gain Sovereignty in DNS

The European Commission has launched an initiative to offer an alternative to the public DNS resolvers that currently dominate the market, including Cloudflare, Google, Akamai, and others. The €14 million project, called DNS4EU and funded by the Commission, is led by the Czech cybersecurity company Whalebone. It is designed to strengthen the EU’s digital sovereignty and enhance cybersecurity.

The DNS system acts like a translator, connecting website names—such as “howweceeit.com,” which humans use—into IP addresses, which are how computers locate websites.

Week 26

Trump Promises to Back Article 5, NATO Members Agree to Increase Spending

As Russia accelerates weapons production and Putin grows more assertive, NATO countries — especially those on the alliance’s eastern flank — are preparing for scenarios once deemed unthinkable. Bloomberg reports that Russia will soon be producing more military equipment than its forces in Ukraine can consume, while its nuclear base in Kaliningrad and its presence in Belarus are raising red flags across the Baltic.

Even more alarming, Danish intelligence officials warn that a Russian attack against NATO could come as soon as six months from now.

Under this mounting pressure, NATO leaders meeting in The Hague on Wednesday agreed to increase defense spending to 5% of GDP and renewed their “ironclad commitment” to mutual security. The U.S. president, who had wavered in his stance ahead of the summit, pledged his backing for Article 5 — the alliance’s core principle that an attack on one member is an attack on all.

Whether member states will ultimately meet the spending goals agreed on Wednesday remains an open question. Spain and Slovakia have already expressed doubts about allocating such a significant share of their budgets to defense.

For the Baltics and Poland — where defense spending is already among the highest in NATO — the unity of the alliance and its ability to deter Russia are of existential importance.

Bloomberg Economics estimates that a Russian invasion of the Baltic could shrink the economies of the region by up to 43% in the first year, while EU GDP would fall by 1.2%. Despite the improbability of a full-scale war, officials warn the region must be prepared for hybrid attacks, infrastructure sabotage, or staged provocations.

Bruegel Report: Europe’s Military Lacks Mass, Modern Systems

Bruegel and the Kiel Institute for the World Economy have released the first comprehensive report on military procurement and defense spending in Europe’s four key armies: the UK, France, Germany, and Poland. It delivers a sobering assessment of Europe’s readiness for a potential Russian attack on NATO.

Europe’s capabilities remain insufficient, according to analysts. Equipment stocks have declined sharply since the Cold War, and rearmament efforts have yet to reverse the trend. Strategic enablers like military satellites are a critical weakness, with Europe trailing not just the US and China, but also Russia.

Procurement volumes are low. While artillery shells and howitzer production are nearing demand, output for tanks, IFVs, missiles, and fighter jets remains inadequate, with delivery times often exceeding three years. Development of advanced systems—rocket artillery, autonomous platforms, AI-integrated tech, and sixth-generation aircraft—is minimal or absent.

Poland is the only CEE country identified as a key military actor alongside the UK, France, and Germany. Since Russia’s full-scale invasion in 2022, it has placed 97 orders worth €66 billion.

Land capabilities are the clear priority in Poland’s procurement strategy. Procurement in other domains has remained largely stable. This stands in stark contrast to the UK—where naval platforms dominate procurement—but mirrors Germany’s recent pivot towards land forces.

Czech AI Startup Filuta Secures $4.2M to Scale Military-Grade Tech

Prague-based Filuta AI has raised $4.2 million in seed funding led by Rockaway Ventures, with Tarpan Capital and Lion Beat Capital also participating. The company, founded in 2022 by Filip Dvořák, who brings experience from Google, Microsoft, and DARPA, develops composite AI platforms used for autonomous simulations across various industries, including military training. With 20 PhDs and several professors on board, Filuta claims one of the strongest AI teams in the region and aims to capture a significant share of the global simulation market.