EU Commission offers €20 billions for Ukraine’s ‘defence fund’

At a meeting of EU foreign ministers, the European Commission suggested a €20 billion fund to assist Ukraine in arming itself over the following four years. Governments of the EU member states will now discuss it, with Hungary threatening to obstruct it again.

The idea, which could be adopted as early as this fall, will allow the bloc to allocate €5 billion annually from the fund as part of its long-term sustainable support for Ukraine. The funding will be added to the €50 billion in non-military aid promised for 2024–2027.

According to the neutrality principle upheld by a few member states, the funds will be used to purchase lethal and non-lethal equipment. They would fulfil one of the security obligations made by EU leaders to Ukraine at a summit in June.

Instead of making direct payments, the EU cash will be used to reimburse the costs paid by the EU member states for donating and purchasing military aid for Ukraine, such as ammunition, artillery and tanks. The Ukrainian military will also receive training from it.

Since this was the first time the EU had employed the European Peace Facility in a war that was still raging, the deployment of the EPF to offer piecemeal military assistance to Ukraine was unprecedented.

The European Peace Facility, established in 2021, is intended to finance initiatives that reduce conflict, promote peace, and bolster global security. Its value has increased from its initial €5.7 billion to its current €12 billion.

The G7 adopted a decision to give Ukraine “specific, bilateral, long-term security commitments and arrangements” for emergency assistance and to prevent future Russian aggression on the margins of the NATO summit in Vilnius in July. The objective now is to make this facility more long-term.

“You have to make Ukraine able to defend. So, the European Peace Facility for Ukraine, maybe it has to become a new Ukrainian defence fund.”

Josep Borrell, EU’s chief diplomat

The plan will alleviate some of the worries people have about Donald Trump or a similar candidate possibly succeeding in the US presidential election. Under President Joe Biden’s leadership, Ukraine has relied much on US assistance; if funding is cut off due to a rival’s election, Ukraine may find itself in a dangerous scenario.

The past three days have been spent by Ukrainian forces attempting to fend off Russian attacks on the nation’s grain storage facilities, which Borrell referred to as an atrocity. Attacks started soon after Russian dictator Putin decided to halt the Black Sea corridor and the grain deal, which had aided in the global commerce of Ukrainian cereals.

The G7 stated in its joint statement that it would assist programs for cyber defence, security, and resilience, as well as training and exercises for Ukrainian troops. It will also share and cooperate in intelligence. In addition, the group will work to improve energy security, aid in reconstruction and recovery activities, and support Ukraine’s immediate needs with technical and financial assistance.

Germany has disclosed a new $770 million package of military aid, which includes two Patriot launchers, 24 Leopard 1A5 tanks, 40 Marder infantry fighting vehicles, and 20,000 artillery rounds.

Hungary has, however, voiced objection to the EPF aid plan. Currently, Hungary is delaying the return of €500 million in EPF funds to Ukraine under the guise that the Hungarian bank OTP must first be taken off a Ukrainian blacklist.

According to Peter Szijjarto, the foreign minister for Hungary, Budapest would adopt the same attitude with the latest plan, according to Politico. He told reporters, “We are not willing to engage in negotiations as long as OTP remains on this list, not for the €500 million blocked so far, nor for the €20 billion presently requested.

Hungary remains the only nation in the EU still maintaining close links with Moscow. Budapest can only delay the reimbursement of military aid to EU member states. Still, it cannot stop Ukraine from receiving assistance from the EU member states.

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