EU nears deal to restock Ukraine’s diminishing ammo supplies – POLITICO

BRUSSELS — The EU is finalizing a €2 billion deal to jointly restock Ukraine’s dwindling ammunition supply while refilling the countries’ stockpiles, according to documents obtained by POLITICO.

The plan has two main elements.

First, the EU will spend €1 billion to partially compensate countries that can immediately donate ammunition from their own stockpiles. Second, the countries will work together to jointly buy €1 billion in new ammunition — the idea being that together they can negotiate larger 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 — at a meeting on Wednesday.

The scheme — which POLITICO was first reported earlier this month — has rapidly converged in recent weeks in response to Ukraine’s pleas for more ammunition, particularly the 155-millimeter artillery shells it desperately needs to both hold territory and launch a counter-offensive in the spring.

And the figures, one of the documents notes, responded “to a specific request made by the defense minister of Ukraine.”

The numbers are clear.

Estonia, which helped start talks in February about how the EU could jointly help fill a looming ammunition shortage, estimated that Russia was burning 20,000-60,000 shells a day as Ukraine tried to use only between 2,000 and 7,000.

Conquering that figure won’t be easy — or cheap.

So far, EU countries have given Ukraine only 350,000 155-millimeter shells in total, with the EU spending €450 million in partial payments, said an EU official, speaking on condition of anonymity. to discuss the sensitive topic. But the official put the cost for each new shell at €4,000, meaning costs are rising.

To cover both the losses of countries falling on their stockpiles and financing new ammunition purchases, the EU taps into the so-called European Peace Facility. The little-known fund is outside the normal EU budget, giving officials the flexibility to use it to cover arms purchases — once a verboten concept within the EU, a self-proclaimed peace project.

Right now, the facility is only used to partially repay countries for their arms donations to Ukraine. Now, documents show the countries are willing to funnel an additional €2 billion into the facility — €1 billion to cover some ammunition donations and €1 billion to support the joint purchase of replacement shells.

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

The joint procurement plan covers not only EU countries but also Norway — as POLITICO first reported — potentially opening the door to some of the money going to non-EU based companies. Norway, however, which produces ammunition, has been somewhat integrated into the EU market.

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