Money from aid fund

EU fixes new billion-euro aid for Ukraine

A large part of the package is to be used to finance weapons and ammunition.

(Bild: AP)

After months of negotiations, a decision has now been reached: The EU aid fund is to be increased to release five billion euros for Ukraine. The package is intended to guarantee the supply of weapons, ammunition and other goods.

The sum that the EU countries have now agreed on comes from the EU aid fund, according to information from the Belgian Council Presidency. Specifically, the members agreed on Wednesday to provide the European Peace Facility (EFF) with additional funds.

This financial instrument can be used to reimburse EU member states for military support for Ukraine and to pay for joint orders.

The negotiations were made more difficult by France's demand that only weapons and ammunition produced in Europe should be financed with EU funds. The government in Paris argued that the arms industry in the EU needed firm orders in order to be able to expand its production in the long term and survive international competition. Opponents of the regulation, on the other hand, argued that the first priority should be to support Ukraine quickly.

Priority for European industry
In the end, a compromise has been reached: the European defense industry is to be given priority. If Ukrainian demand cannot be met quickly enough, non-European companies can also be commissioned with EU money.

Peace Facility

• The EU Peace Facility was created before the start of the war in Ukraine to provide military support to partner countries and originally only had a budget of around five billion euros for the period 2021-2027.
• However, due to the unexpected Russian war of aggression against Ukraine, these funds are far from sufficient. The financial ceiling for expenditure has already been increased to around twelve billion euros.
• Around 5.6 billion euros have already been released for aid for the Ukrainian armed forces alone. In addition to Ukraine, countries such as Bosnia-Herzegovina, Georgia, Lebanon and Mauritania also benefit from the peace facility to a much lesser extent.

Berlin also had the draft rewritten. The German government only gave the necessary approval after it was agreed that bilateral support for Ukraine would be taken into account in future when making the necessary payments into the peace facility. Berlin had previously argued that bilateral aid could often be provided more quickly and efficiently.

Blocking Hungary is thus circumvented
Germany also pointed out that Hungary has been blocking planned disbursements from remaining Peace Facility funds for months and could theoretically continue to do so in the future, as it requires the approval of all member states for all disbursement decisions.

At the same time, the new rules are intended to ensure greater fairness in the support provided to Ukraine. This is relevant for Belrin because it has already pledged more than seven billion euros worth of military aid to Ukraine for this year alone and Germany, as the largest economy, usually finances around a quarter of EU spending. The new rules should now make it possible for about half of bilateral aid to be offset against the EU's financial contribution.

The tense situation on the front and the unresolved domestic political dispute in the USA over new aid for Ukraine had recently put pressure on the negotiations. According to the Ukrainian armed forces, they urgently need further supplies of weapons and ammunition in order to hold their own against the attackers from Russia. The agreement reached on Wednesday must now be confirmed by the Council of Member States. However, this is considered a formality.