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EU’s Ukraine war fund ready for sign off, with flexibility in buying non-EU weapons

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EU ambassadors gave their green light on the creation of the long-awaited fund for Ukraine’s military support on Wednesday (13 March), after removing French and German concerns, in a bid to ensure more sustainable aid flow to the war-torn country.

EU member states agreed to set up the €5 billion Ukraine Assistance Fund (UAF), to be boosted up to €17 billion in current prices (€20 billion in 2018 prices) until 2027 if necessary, according to the draft decision seen by Euractiv.

“The message is clear: we will support Ukraine with whatever it takes to prevail,” EU’s chief diplomat Josep Borrell posted on social media platform X after the decision.

This is yet another powerful and timely demonstration of European unity and determination in achieving our common victory,” Ukraine’s Foreign Minister Dmytro Kuleba wrote on X.
“We look forward to the final decision being approved at the next EU Foreign Affairs Council meeting,” he added.

The decision comes as EU envoys to Brussels have held weeks of intense discussions around the reform of the new European Peace Facility. The existing fund has been topped up to reimburse EU countries for their weapons donations to Kyiv for almost two years, while Ukraine starves for ammunition, weapons and other defence equipment.

Questions around the origin of the equipment that can be jointly procured with the extra cash, in line with long-standing French demands to boost the bloc’s industry and independence, are loosely taken into account, giving way to purchase outside the EU and Norway.

The matter of how flexible the rules are will be up to each country’s political interpretation.

In comparison to the current rules of the European Peace Facility established in 2021, they are highly restrictive. However, in ammunition plan to deliver to one million rounds of ammunition to Ukraine under one year set up last March, it is highly flexible.

The accounting trick to offset contributions requested by Germany – while it is not featured in the draft text read by Euractiv – also seems concluded.

As reported by Euractiv, the text also offers a work-around for the veto of any EU country which prefers to not support Ukraine, where the abstaining government will place its contribution to another assistance measure, in a bid to avoid Hungary or Slovakia blocking the allocation of funds to Ukraine.

EU leaders meeting for their regular summit next week in Brussels have set a rendez-vous set to sign it off, according to a draft decision seen by Euractiv, where they “welcome the adoption, which ensures the continuation of military support for Ukraine”.

According to the rules listed for the use of the UAF, joint procurement of weapons would be a priority in the medium to longer term, instead of unilateral purchases or donations from the stocks.

The joint procurement of the “required” defence equipment by the Ukrainians would come “from the European defence industry and Norway, including small and medium-sized (SMEs) enterprises” the text reads.

However, exceptions to the Buy European clause will be made to allow for “flexibility in supply chains which may include operators established or having their production outside of the Union or Norway”, as the Old Continent finds it difficult to find pure EU-and Norway-made products, with no American component for instance.

Some countries also considered that strict rules would lengthen the process.

Needs identified and procurement made possible within the framework of the capability coalitions will also have to be taken into account in deciding where to purchase, the draft text suggests.

Western countries vowed this autumn to organise weapons production under the Ramstein support group for Kyiv a bid to keep up and increase military aid to the war-torn country after almost two years of fighting.

Coalitions are focused on a specific type of combat capability (air defence, maritime, IT, drones, etc.) and include non-EU countries such as the US and the UK.

“Initiatives that bring together European and Ukrainian defence industry partners, including through joint ventures, should be promoted,” the document also reads, in what looks like a reference to the proposed European Defence Investment Programme (EDIP) to boost production capacity around the continent that would associate the Ukrainian industry.

The transition period to continue to allow reimbursement of member states other deliveries than joint procurement – ie. from stocks, unilateral procurement, including outside the bloc and Norway – is not set yet.

As expected, experts sitting in the ‘European Peace Facility Committee’ will decide “taking into account Ukraine’s priority military needs, once the dedicated amount is nearing depletion”.

During that transition period, member states will “give priority” to the European and Norwegian defence industry for placing joint procurement orders concluded under the umbrella of the Ramstein capability coalitions.

In a move that gives a lot of ways for the Europeans who prefer to shop outside the continent and forces the bloc’s industry to boost production capacity, flexibility will be allowed when the industry “cannot provide within a timeframe compatible with Ukrainian needs”.

[Edited by Alexandra Brzozowski/Nathalie Weatherald]

Read more with Euractiv

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