EU to allocate 500 million euros for urgent increase in ammunition production

The European Commission (EC) has approved a legislative proposal to support the production of ammunition by the European industry in accordance with the plan for urgent supplies of shells and missiles to Ukraine and replenishment of EU member states' own stocks, for which the EC will allocate 500 million euros.

"The law is aimed at increasing EU production capacity and addressing the current shortage of ammunition and missiles, as well as their components," the European Commission said in a communiqué.

The document announces that the European Commission will allocate €500 million for this purpose "by reallocating various instruments, including the European Defense Fund and the future EDIRPA regulation (European defense industry reinforcement through common procurement act).

The new EC proposal includes:

• a financial support tool to strengthen the EU's industrial capacities for the production of relevant defense products;
• a mechanism for analyzing, monitoring and more accurately predicting bottlenecks in supply chains;
• introduction of a temporary regulatory framework to address the problem of ammunition shortages.

The President of the European Commission Ursula von der Leyen reminded of the three-point plan agreed by the EU Council:

1) supplying Ukraine with ammunition from member states' warehouses with the support of the European Peace Fund in the amount of 1 billion euros;

2) joint purchases by EU countries of ammunition for Ukraine and their armed forces, also worth 1 billion euros;

3) the third point, which is currently being worked on, is "increasing and accelerating defense industrial production of ammunition in Europe."

Von der Leyen called the build-up of defense industrial capacities across the EU "a critical part of Europe's strategic ability to defend its interests and values and to contribute to the maintenance of peace on our continent."

The European Commission clarifies that "financial support will be provided in the form of grants for various actions that will contribute to the efforts of the European defense industry to increase its production capacity and address identified bottlenecks."

The EC also reports that the new proposal will be submitted to the European Parliament. The European Commission expects the regulation to be adopted as soon as possible – by the summer of 2023.