EU proposes changes to €5 billion military aid fund for Ukraine - Bloomberg
Kyiv • UNN
The EU Foreign Affairs Ministry has proposed changes to the fund offering military assistance to Ukraine
The European Union's foreign policy arm has proposed that the bloc's member states review the fund that provides military support to Ukraine as the EU shifts from sending weapons from existing stockpiles to buying new ones, Bloomberg reported on January 19, citing the document, UNN reported .
Details
A document from the European External Action Service reportedly lays out the conditions for the creation of a previously proposed Ukraine Assistance Fund with an annual budget of about 5 billion euros ($5.4 billion), which EU governments have been unable to agree on.
Under the current funding mechanism, known as the European Peace Facility (EPF), member states are compensated for weapons they send to Ukraine. The size of the fund has been increased several times, but decisions to allocate and disburse funds require unanimous support, and there is a backlog that will need to be covered, the publication notes.
Since Russia's full-scale invasion of Ukraine almost two years ago, seven packages totaling €3.5 billion have been approved, including €2 billion for ammunition. Member states disputed the reimbursement rates and the use of the mechanism to offset the purchases, while Hungary blocked the eighth tranche of funding to compensate EU countries for the supplies.
At a meeting on Wednesday, diplomatic envoys from several countries, including Germany, suggested that the EPF in its current form is becoming less effective as more supplies will come from newly purchased weapons rather than existing stockpiles in the future.
Other member states would prefer the bailout fund to be incorporated into the EPF, while some countries want to continue using the current arrangement, as previously reported by Bloomberg.
The proposal of the European External Action Service, as noted, aims to reconcile different positions by changing the management of the fund, including fixing reimbursement rates and providing a higher bonus for joint initiatives of European and Ukrainian industry. The draft states that compensation for supplies from stocks and unilateral purchases will be gradually phased out.
The fund will have two main "European pillars" supported through the EPF: providing lethal and non-lethal support to Ukraine through joint procurement through European industry and continuing to train and equip Ukrainian troops. This instrument will complement any bilateral assistance provided by member states, the newspaper writes.
The European External Action Service states that the fund will be used to meet Ukraine's most urgent needs for artillery, specialized ammunition, drones and air defense, as well as non-lethal elements such as demining, military medical support and cybersecurity.
As part of the proposals, the EU should consider setting targets with specific outcomes and timelines, and member states should indicate how they intend to contribute to their achievement.
The use of non-European equipment and services in the work of the block for training and equipping Ukrainian troops, for example, as part of the F-16 coalition, should be considered on a case-by-case basis, the project suggests.
An EU diplomat said the provision was a tribute to countries such as France, which want the fund to be spent primarily on EU industry. Some member states have criticized this approach, arguing that weapons for Ukraine should come from where they are currently available.
"A political agreement should be reached as soon as possible on the proposed goal of increasing the overall financial ceiling of the EPF by €5 billion, specifically earmarked for Ukraine," the document says.
A further annual increase of the fund by a comparable amount may be envisaged until 2027, based on Ukraine's needs and subject to the political leadership of the Member States, it adds.
