Reforming the European Military Aid Fund for Ukraine

The European Union intends to reform the fund providing military assistance to Ukraine by 5 billion euros. The bloc plans to switch from sending weapons from existing stocks to purchasing new ones.

Under the current funding mechanism, known as the European Peace Fund, member countries are reimbursed for the weapons they send to Ukraine. Member countries EU submitted a proposal to reorganize the fund, reports Bloomberg with reference to the relevant document.

It sets out the conditions for the creation of a previously proposed Ukraine Assistance Fund with an annual budget of about 5 billion euros, which EU governments had previously been unable to agree on. The size of the fund has been increased several times, but the decision to allocate and disburse funds requires unanimous support. The document says:

“It is necessary to reach political agreement as quickly as possible on the proposed goal of increasing the overall financial ceiling of the EMF by 5 billion euros, specifically earmarked for Ukraine.”

Further comparable annual increases could be envisaged until 2027, based on Ukraine’s needs and subject to political leadership from Member States.

Diplomatic representatives from several countries, including Germany, suggested at a meeting on Wednesday that the EMF in its current form is becoming less effective as most future supplies will come from new arms purchases rather than from existing stockpiles. The publication notes that other member countries would like to see the relief fund built into the EMF, and some countries want to maintain the current mechanism.

The EU foreign policy proposal aims to reconcile the different positions by changing the management of the fund, including fixing reimbursement rates and providing a higher bonus for joint initiatives between European and Ukrainian industry. The draft assumes that reimbursement for supplies from warehouses and one-way purchases will be phased out. The Fund will have two main directions supported through the EMF:

1. Providing lethal and non-lethal support to Ukraine through joint procurement through European industry.
2. Continued training and equipment of Ukrainian troops.

This instrument should complement any bilateral assistance provided to Kyiv by member states. It is planned that the fund will be used to meet Ukraine’s current needs for artillery, specialized ammunition, drones, air defense, non-lethal elements – mine clearance, military medical support, cyber security. The involvement of non-European weapons and services in the EU’s efforts to train and equip Ukrainian forces, for example through the F-16 coalition, must be considered on a case-by-case basis.

On an irrevocable basis, Ukraine received 150 million euros in financial assistance from the European Union.

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