GeoPolitics

Lithuania's new three-party coalition government, approved July 14, 2026, has committed to normalising ambassador-level diplomatic relations with China and allowed Beijing to open a chargé d'affaires office in Vilnius, reversing a five-year standoff that began when Lithuania permitted a Taiwanese Representative Office to use the name 'Taiwanese' rather than 'Taipei.' The government has not committed to renaming or closing that office, a condition Beijing continues to insist upon, leaving the central dispute unresolved. On Russia, the cabinet maintains continuity: defence spending remains near 5% of GDP, sanctions coordination continues, and a German brigade is scheduled for permanent stationing in Lithuania by 2027.

On 15 July 2026, the EU and Ukraine signed a Letter of Intent establishing a Strategic Defence Industrial Partnership, accompanied by a €1 billion disbursement specifically for Ukrainian drone procurement. The agreement outlines three cooperation tracks: joint drone and counter-drone production by end-2026, joint anti-ballistic missile production by 2028, and supply chain integration covering critical raw materials. A central driver is a stark production gap: Ukrainian industry is projected to manufacture approximately nine million drones in 2026 compared to fewer than one million from the entire European defence industrial base, a disparity the pact aims to close through shared standards, intellectual property protections, and reciprocal market access.