Budget commissioner rules out EU money to fund arms purchases

The European Union may be exploring options to jointly buy military equipment — but don’t expect the EU budget to cough up the money.

European Budget Commissioner Johannes Hahn on Thursday pushed back on reports that the EU could finance military equipment through its own resources — a debate that has emerged as the bloc mulls plans to jointly negotiate ammunition contracts on behalf of several countries.

“[It’s] not possible due to the treaty,” the Austrian commissioner told reporters. “I have been crystal clear what is possible due to our treaty and what is not.”

Instead, he pointed to the so-called European Peace Facility (EPF) — a fund that has been used to reimburse countries for weapons donated to Ukraine. The EPF, an “off-budget” pool of money, is also structured to let EU members outside of NATO send Ukraine non-lethal aid.

“This is an intergovernmental structure where each member state can chip in and provide support,” Hahn said.

But the EPF — once a little-known operation that has become central to the EU’s military response to Russia’s war in Ukraine — is close to depleted. Already, it has been topped up numerous times, and senior European Commission officials have privately said its function needs to be reassessed this year.

Now, the EPF is being pulled into conversations about the bloc’s joint ammunition purposes — a move that comes amid fears Ukraine is running low on bullets. The idea is to score lower prices by having the EU negotiate on behalf of several countries, and then send the ammunition to Ukraine and possibly European countries eventually.

To get there, Commission officials are exploring ways of setting up advance purchasing agreements that would allow the EU to collectively source armaments from defense companies.

Commission President Ursula von der Leyen recently confirmed that discussions are underway.

“Now is the time to speed up the production of standardized products, standardized ammunition,” she said at the Munich Security Conference. “It cannot be we have to wait months and years for us to be able to before we are able to restock ourselves again.”

The idea of pooling resources to procure weapons and tackle Europe’s depleting military stocks as they ship ammunition to Ukraine is not a novel idea.

In November, Borrell and the EU’s internal market commissioner, Thierry Breton, wrote a letter to defense ministers — first reported by POLITICO — suggesting a massive joint procurement plan for weapons. They compared it with the coronavirus pandemic, when EU countries allowed Brussels to negotiate a bloc-wide contract to buy vaccines.

But the idea has gained traction again following an intervention by Estonian Prime Minister Kaja Kallas earlier this month at an EU leaders’ summit.

With Ukraine barreling through tens of thousands of artillery shells a day, the West is struggling to keep up.

Under the Kallas proposal, the EU would arrange the procurement of defense equipment much as it did COVID vaccines during the coronavirus pandemic. But weapons are more politically fraught than vaccines, given that the EU has historically shied away from acting as a defense union, a role more aligned with NATO’s capabilities.

While the Commission has already proposed a new fund that would help procure defense capabilities — the European Defense Industry Reinforcement Through Common Procurement Act (EDIRPA) — it only aims to allocate €500 million and is snaking through the EU’s institutional process at a slow pace.

Hahn said that securing agreement on the EDIRPA proposal by the end of the year is “ambitious.”