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EU can reform 5 billion euro military aid fund for Ukraine - Bloomberg

EU can reform 5 billion euro military aid fund for Ukraine - Bloomberg Photo: The EU may reform the military aid fund for Ukraine by 5 billion euros (Getty Images)

European Union member countries have been presented with a proposal to reorganize the fund that provides military support to Ukraine. The bloc plans to shift from sending weaponry from existing stocks to procuring new ones, according to Bloomberg.

According to documents from the European External Action Service, the terms for establishing the previously proposed Aid Fund for Ukraine with an annual budget of approximately 5 billion euros (5.4 billion dollars) have been outlined. However, EU members were unable to reach an agreement on this fund.

Under the current funding mechanism - the European Peace Fund, EU member countries receive reimbursement for the weapons they send to Ukraine. The fund's size has been increased several times, but decisions on allocation and disbursement of funds require unanimous support.

"Member states have argued over reimbursement rates and use of the facility to offset purchases, while Hungary has blocked an eighth funding tranche to compensate EU nations for deliveries," reports Bloomberg.

Diplomatic representatives of several countries, including Germany, have speculated that the European Peace Fund is becoming less effective, as a significant portion of future deliveries will be made through new arms purchases rather than from existing stocks.

Other EU member countries prefer integrating the aid fund into the European Peace Fund. However, there are also those who wish to maintain the current mechanism.

What the EU proposes

The proposal aims to harmonize different positions by changing the management of the fund. This includes fixing reimbursement rates and providing higher bonuses for joint initiatives between the European and Ukrainian industries.

The project also outlines the gradual phasing out of reimbursements for deliveries from stockpiles and unilateral purchases.

The fund will have two main directions:

  • Providing lethal and non-lethal support to Ukraine through joint purchases via the European industry.
  • Continuing training and equipping the Ukrainian forces.

The fund is planned to address Ukraine's most urgent needs in artillery, ammunition, UAVs, as well as air defense systems. Non-lethal aid, such as demining, military-medical support, and cybersecurity, is also mentioned.

It is also noted that the involvement of non-European weaponry and services in the EU's work on training and equipping the Ukrainian forces should be considered in each specific case.

Ammunition from the EU for Ukraine

In March of last year, EU defense and foreign affairs ministers approved a plan for joint procurement of ammunition for Ukraine. The plan involved providing the Armed Forces of Ukraine with 1 million shells over the next 12 months.

However, by November 2023, the EU informed its members that it was unlikely to deliver the promised 1 million artillery shells to Ukraine. This plan was supposed to be implemented by March 2024.

Later, Ukrainian President Volodymyr Zelenskyy stated that the country still expects to receive the full package of artillery shells and urged leaders of the EU to push for it.