For months, EU members have struggled over how they want to finance further military aid to Ukraine. Now a decision has been made.
After months of negotiations, the EU states have agreed to continue joint financing of military equipment for Ukraine. According to the agreement reached in Brussels on Wednesday, the move is intended to guarantee the supply of weapons, ammunition and other goods worth at least five billion euros. This emerges from information from the current Belgian EU Council Presidency.
Ukraine has been defending itself against Russia’s war of aggression for more than two years. Western allies are supporting it with financial and military aid. The sum that the EU countries have now agreed on comes from the EU aid fund. According to the information, the representatives of the 27 EU member states had previously agreed on the revision of the fund in Brussels.
Specifically, it is planned to provide the European Peace Facility (EFF) with additional funds. This financing instrument can be used to reimburse EU member states for military support to Ukraine attacked by Russia and to pay for joint orders.
Demands from France and Germany
The negotiations were particularly difficult because of demands from Germany and France. The Federal Government only gave the necessary consent after it was agreed that future bilateral support payments for Ukraine would be taken into account in the necessary payments into the Peace Facility. Berlin had previously argued that bilateral aid could often be provided more quickly and efficiently.
The federal government also pointed out that Hungary has been blocking planned disbursements from remaining Peace Facility funds for months and could theoretically continue to do so in the future because it requires the consent of all member states for any disbursement decision.
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In the end there is a compromise
At the same time, the new rules are intended to ensure more fairness in support for Ukraine. This is relevant for the federal government because it has already promised Ukraine military aid worth more than seven billion euros this year alone, and at the same time Germany, as the largest economy, usually finances around a quarter of the EU’s joint spending. The new rules should now make it possible for bilateral aid to be counted towards around half of the EU financing contribution.
The negotiations were further complicated by France’s demand that only weapons and ammunition produced in Europe be financed with EU funds. The government in Paris argued that the defense industry in the EU needed firm orders in order to be able to permanently expand its production and survive against international competition. Opponents of the regulation, however, argued that the first thing to do was to quickly support Ukraine.
In the end there is now a compromise that the European defense industry should be given priority for orders. However, if this cannot deliver quickly enough for Ukraine’s needs, EU money should also be able to be used to pay for orders to companies in non-EU countries. German EU Ambassador Michael Clauss described the agreement on Wednesday evening as “good news for Ukraine.” It enables the particularly quick and unbureaucratic bilateral delivery of military goods as part of the EU support for Ukraine, he said.
The situation at the front created pressure
Pressure on the negotiations has recently arisen primarily from the tense situation at the front and the unresolved domestic political dispute over new aid to Ukraine in the USA. According to their own statements, the Ukrainian armed forces urgently need further deliveries of weapons and ammunition in order to be able to hold their own against the attackers from Russia.
The European Peace Facility was created before the start of the war in Ukraine to provide military support to partner countries and was originally only endowed with around five billion euros for the period 2021-2027. However, due to the unexpected Russian war of aggression against Ukraine, these resources are far from sufficient. The financial upper limit for spending has already been increased to around twelve billion euros. To date, around 5.6 billion euros have been released for aid to the Ukrainian armed forces alone.
In addition to Ukraine, countries such as Bosnia-Herzegovina, Georgia, Lebanon and Mauritania also benefit from the peace facility to a much lesser extent. The agreement reached on Wednesday must now be confirmed again by the Council of Member States. However, this is considered a formality.