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EU close to finalising €2bn deal to replenish ammunition stockpiles in both Ukraine, member states – Politico

Ukraine is currently experiencing a shortage of ammunition due to the intensity of the fighting.

EU close to finalising €2bn deal to replenish ammunition stockpiles in both Ukraine, member states – Politico
Photo: UAF

Politico has obtained documents that outline a €2 billion plan for the EU to both restock Ukraine and replenish its own stockpiles.

The plan has two major elements.

First, the EU will spend €1 billion to partially reimburse countries that can immediately donate ammunition from their own stockpiles. Secondly, countries will work together to jointly purchase €1 billion in new ammunition — the idea being that together they can negotiate bigger contracts at a lower price-per-shell.

EU ambassadors will discuss the proposal — prepared by the EU’s diplomatic wing, the European External Action Service — during a meeting on Wednesday.

The scheme has come together rapidly in recent weeks in response to Ukraine’s pleas for more ammunition, specifically the 155-millimetre artillery shells it desperately needs to both hold territory and launch a spring counteroffensive.

The figures, one of the documents notes, respond “to a specific request made by the Ukrainian minister of defence.”

Estonia, which helped start the conversation in February about how the EU could jointly help fill a looming munitions shortage, has estimated that Russia is burning through 20,000-60,000 shells per day while Ukraine is trying to judiciously only use between 2,000 and 7,000.

Covering that figure will not come easy or cheap. 

One EU official said, speaking on the condition of anonymity, that thus far, EU countries have only provided Ukraine with 350,000 155-millimetre shells in total, with the EU spending €450 million on partial reimbursements. But the official pegged the cost for each new shell at €4,000, meaning costs are growing.

To cover the countries' losses in this regard, the EU is tapping the so-called European Peace Facility. The little-known fund sits outside of the EU’s normal budget, giving officials the flexibility to use it to cover weapons purchases — once a verboten concept within the EU. 

Thus far, the facility has been used solely to partially reimburse countries for their weapons donations to Ukraine. Now, documents show countries are willing to funnel an additional €2 billion into the facility — €1 billion to cover some ammunition donations and €1 billion to support joint purchases of replacement shells. 

The documents foresee the European Defense Agency, an EU agency meant to better coordinate members’ security efforts, possibly playing a role in coordinating the joint procurement efforts. But individual countries could also help spearhead these negotiations, as long as the country is working with at least two other EU members and not creating competing bids for the shells that drive up prices.

The joint procurement plan covers not just EU countries but Norway as well, potentially opening the door to some of the money going to non-EU-based companies. Norway, however, which produces ammunition, is already relatively integrated into the EU market. 

EU officials are now aiming to get a consensus agreement on the plan during a meeting on Monday of foreign and defence ministers, before getting final sign-off from the 27 EU leaders at a summit in Brussels a few days later. 

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