Brussels is drafting a proposal to use the EU budget to pre-finance the purchase of weapons and ammunition, a first-of-its-kind entry into the defense business intended to expedite the delivery of munitions to Ukraine.
According to reports, the European Commission is examining how it may use the bloc's budget to offer downpayments to arms manufacturers as an incentive for higher production. Concerns exist as to whether Europe can develop sufficient armaments at the same rate as Ukraine consumes them in its defense against Russian invasion.
One of the sources noted that a final commission plan will be distributed to the EU's 27 members prior to a meeting of defence ministers on March 7.
"We need a new injection to get the defence industry moving," said one of the officials, who all declined to be identified because the plans are confidential. "The reality has moved beyond the current systems."
Given that the EU's governing treaties prohibit the use of bloc finances for military purposes, the plans are being developed with the assistance of commission lawyers. Given the legal difficulties, they could be altered before they are made public, according to the people.
The idea would mirror the commission's initiative to procure Covid-19 vaccinations before to the pandemic's outbreak. Then, Brussels offered upfront payments to pharmaceutical companies to assure sufficient supply for member states, who covered the ultimate cost of the vaccinations.
The president of the European Commission, Ursula von der Leyen, stated over the weekend that advance purchase agreements will "give the defence industry the possibility to invest in production lines now to be faster and to increase the amount they can deliver."
In response to a question on the draft plan, the commission stated that the bloc "is considering options to jointly procure standardised defence products such as ammunitions."
In recent weeks, securing adequate ammunition supply for Ukraine has been a pressing concern, as senior officials including NATO Secretary-General Jens Stoltenberg have cautioned that Europe's defense sector is "under strain" to meet demand.
Each day, Russia fires more than 20,000 artillery shells into Ukraine, which is as much as European factories produce in a single month. Ukraine fires roughly a fourth of that amount.
In response, EU capitals have backed plans for joint procurement contracts to expedite defence orders and encourage manufacturers to boost output, such as an Estonian proposal for countries to collaborate on a $4 billion contract to purchase one million artillery shells.
The commission's plan, which was presented to EU foreign ministers on Monday, would greatly enhance this effort by utilizing the bloc's €1 trillion budget over seven years to guarantee these instructions.
A second official stated, "The EU has multiple ways to proceed with such a project. ."
After nearly a year of the EU's so-called European Peace Facility fund, which has been used to reimburse member states for weaponry they delivered to Kyiv, work has begun on the commission's prepayment proposal.
Yet, according to officials, the urgent need to incentivize the defense industry to increase output necessitates that funds be allocated in advance, rather than retroactively.
"[Ukraine] has cannons, but they lack ammunition," EU's foreign and security chief Josep Borrell stated on Monday. "So, we do everything we can," he said, referring to the current refund plan and new methods including the commission to "do common purchase."
By fLEXI tEAM