Espreso. Global

EU prepares multi-year military aid package for Ukraine worth EUR 20bn

22 January, 2024 Monday

Josep Borrell's office has put forward a proposal to reform the European Peace Fund, which reimbursed EU member states for the cost of weapons transferred to Ukraine, and to create a special military fund on its basis

Radio Liberty reports this, referring to an unofficial document of the EU Foreign Policy Service.

The funds are supposed to be used for joint purchases of weapons for Ukraine and training of its military, and will make military assistance more structured and predictable.

"This will be of greater value in terms of providing more and better operational support to Ukraine than would be the case if member states acted individually," the document says.

The idea must be approved by the leaders of the EU member states. It is expected that they will try to reach an agreement at an extraordinary summit of the member states on February 1.

"An early political agreement is needed on the proposed target of increasing the overall financial ceiling of the European Peace Fund by EUR 5 billion, specifically earmarked for Ukraine... Further comparable annual increases could be envisaged until 2027, based on Ukraine's needs and subject to political guidance from the Council," the EU External Action Service document says.

Reimbursements to member states for the supply of weapons from their own stockpiles or unilateral purchases, as was the case with the European Peace Fund, will be gradually phased out, taking into account the possible timing of deliveries through joint procurement and Ukraine's urgent, short-term needs for materials. The document mentions a transition period, the duration of which will be agreed upon separately.

Among the key needs of the Ukrainian Armed Forces is the provision of ammunition for both artillery and air defense systems. It also emphasizes the need to restore its stockpiles of shells, produce drones, and replace artillery barrels. Special emphasis is placed on repair and maintenance of the equipment already provided.

The key challenge is to increase the defense industry's capacity to restore stocks, and a "bonus" is planned for orders that will develop cooperation between European manufacturers and Ukrainian ones.

"Member states should seek to contribute to these policy objectives either through unilateral procurement or through participation in joint procurement efforts... Special financial incentives could also be provided for joint procurement that brings together European and Ukrainian defense industry partners, i.e. joint ventures, for example, by applying a higher reimbursement rate," the document says.

Another track that will be allocated from the military special fund, if approved, is training. The document states that given the high level of "exhaustion" and the difficult situation on the front line, the training needs of the Armed Forces will only increase.

"In December 2023, President Zelenskyy announced an urgent requirement to mobilize another 500,000 conscripts. This will significantly affect the requirements of the EU military training mission to provide basic training for recruits, along with the appropriate provision of basic equipment," the document says.

Borrell's office refers to European Council declarations in which EU leaders emphasize the importance of stable and predictable military support for Ukraine and note that Russia is making considerable efforts to restore its combat capability.

"Given Ukraine's dependence on external support, the choices made by EU member states and partners in the coming period will either allow Ukraine to make decisive progress or seriously undermine its ability to resist. Uncertainty about the predictable and structured provision of military assistance to Ukraine will have a corresponding impact on Ukraine," the EU diplomatic service summarizes.

On February 1, EU leaders gathered for an extraordinary summit to agree on 50 billion in macro-financial assistance to Ukraine, which was blocked by Hungarian Prime Minister Viktor Orban in December.

For eight months, Hungary has also been blocking the next tranche of EUR 500 million from the European Peace Fund for weapons that member states are transferring to Ukraine.

The creation of a separate fund to meet its military needs, as well as the coordination of its content for the next four years, is intended, among other things, to ensure the smooth operation of this process and avoid vetoes on each payment.

Through the European Peace Fund, seven support packages were approved to reimburse lethal and non-lethal military support to Ukraine for a total base amount of EUR 3.5 billion.

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