The European Union wants to rapidly produce more war munitions to help Ukraine, and then to bring its own stocks up to standard.
Brussels put a concrete plan on the table on Wednesday. The door to a kind of “war economy” is ajar.
European Commissioner Thierry Breton (Internal Market) has traveled through Europe in recent weeks to visit ammunition factories. Since the end of the Cold War, many production locations have been (partly) mothballed. “But the infrastructure is there,” says the Frenchman optimistically. “Because of our history, Europe has more production capacity than the US.”
Donation
But the factories are not always running at full capacity. Brussels proposes to put production lines back into operation, to increase them or even to build new factories where necessary. To help Ukraine, EU member states decided earlier this spring to allocate 1 billion euros from the Peace Facility to donate ammunition from their stocks. In addition, it was decided to jointly purchase ammunition for another 1 billion euros. Norway is also participating.
Kiev does not let a moment pass to ask Europe for more ammunition. The country is happy with all donated armored howitzers and main battle tanks. But in the fight against the Russians, the Ukrainian forces are firing more shells than Europe can produce now.
‘Third Rail’
That is why the country bloc wants to increase production in addition to joint purchasing and emptying its own pantry. In Brussels they call this the ‘third track’. European Commissioner Breton presented a proposal for the implementation of this plan on Wednesday. Brussels wants to allocate 500 million euros for this. In practice, this amounts to more than 1 billion in investments. Because member states and industry must finance 60 percent themselves.
The money, Brussels proposes, can be used for all kinds of things. For restarting production lines, but also for suppliers or retraining personnel. Breton also wants to put money from the corona recovery fund and the regional fund into the defense industry. This is particularly sensitive in Member States with strict neutrality policies, such as Ireland and Austria.
‘Race against the clock’
Why is tax money needed for an industry where they can no longer handle orders? “The European defense industry is not homogeneous. During my visits I have seen that there are problems with financing,” says Breton.
Although labor is not an EU competence, Breton wants to urge member states to pull out all the stops. “Night work or production during the weekend is sometimes not allowed by rules. But it takes a lot of time to restart the machines in the morning,” says the European Commissioner. “It is a race against time. So we are going to investigate with member states whether things can be done differently.”
Emergencies
In addition to a pot of money, Breton has proposed new European legislation to reduce the administrative burden. And he opens the door to a kind of ‘war economy’.
The EU administrator wants to make it possible in an emergency to enforce priority orders for ammunition or components needed for making grenades. Companies can be fined if they do not cooperate. Entrepreneurs should be given an exemption if they prove that it really is not possible.
Breton hopes that the European Parliament and member states will agree before the summer. That is exceptionally fast by European standards. “It should be possible to get ammunition production to 1 million units per year within 12 months.”