NATO member Romania signed an agreement Monday with German defense company Rheinmetall to build a gunpowder factory in central Romania, as Europe races to rearm itself in the face of an increasingly provocative Russia.

After signing the deal, Prime Minister Ilie Bolojan hailed the joint venture between the Romanian state and Europe’s largest arms producer as a sign that Romania is “emerging as a player with potential in the defense industry of Southeast Europe.”

Construction of the 535 million-euro ($616 million) plant in the town of Victoria in Brasov County is expected to start in 2026, take three years to complete and create about 700 local jobs, he said. Romania will seek to finance part of its contributions through the European SAFE mechanism to encourage defense readiness.

“After

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