The European Commission made the decision to allot €500 million to help with ammunition manufacture.
It includes funding the necessary production for the prompt shipment of ammunition and missiles to Ukraine as well as assisting EU member states in restocking their inventories. Previously, the EU announced sending one million shells to Ukraine
The EC website published information about this.
Funding will be used to expand the defense industry’s capacity for manufacturing and address the existing scarcity of ammunition and missiles.
“In light of the return of high-intensity conflict in Europe, the timely availability in sufficient volumes of these products is critical for our security and for our continuous efforts to support Ukraine,” the statement added.
The financing plan comprises:
- an instrument to financially support the reinforcement of the EU’s industrial production capacities for the relevant defense products;
- a mechanism to map, monitor and better anticipate the existence of bottlenecks in these supply chains;
- the introduction of a temporary regulatory framework to address the ammunition supply shortage.
The European Defense Fund and the upcoming EDIRPA are just two of the mechanisms that have been redeployed to make up the €500 million budget.
“Europe is stepping up its support on three tracks. First, Member States are delivering additional ammunition from their existing stocks, with new European Peace Facility support of 1 billion euros. Second, together with Member States, we will procure jointly more ammunition for Ukraine – and we are making available an additional billion euro for that. And today, we are delivering on the third track. Ramping up and speeding up the defense industrial production of ammunition in Europe,” von der Leyen, President of the European Commission, said.
HOW IT WORKS
Grants will be given as financial assistance for a range of initiatives supporting the European military industry’s efforts to enhance production capacity.
Financial support will be provided for actions contributing to:
- optimizing, expanding, modernizing, upgrading, or repurposing existing production capacities;
- establishing new production capacities;
- establishing cross-border industrial partnerships, including through public-private partnerships, aiming, for instance, at securing access to or reserving stocks of strategic components or raw materials;
- building up and making available reserved surge manufacturing capacities;
- testing or reconditioning (to address obsolescence) processes with a view to making existing ammunition and missiles useable;
- reskilling and upskilling the related workforce.
A separate fund that will benefit businesses involved in ammunition supply chains is also being proposed. As a result, it will be possible to obtain the public and private finance required to expand production capabilities.
The regulatory measures outlined in the Act would safeguard the Internal Market from any known malfunctions, either existing or possible, thereby enhancing the resilience of the EU’s Defense Technological and Industrial Base (EDTIB) and ensuring the security of ammunition supply. The Commission suggests:
- temporary emergency measures such as the possibility to activate upon request of a procuring Member State and in agreement with the Member States concerned, priority rated orders towards relevant European companies;
- targeted measures to speed up administrative processes at the national level by encouraging prioritization of relevant permit granting and certification processes;
- tailored measures aiming at speeding up common procurement (Member States will have the possibility to open an existing framework agreement to other Member States that were not originally a party to it) and transfers (transfers will be exempted from prior authorization within the European Union).
The European Parliament must vote on the proposal from the European Commission.
A decision is anticipated to be taken by the summer of 2023 to begin ramping up production right away. The support program is planned to run through the middle of 2025.
