EU proposes €40 bln voluntary fund for Ukraine military aid, excluding Hungary

The EU has proposed establishing a voluntary fund, valued between €20 billion and €40 billion, to provide military aid to Ukraine, strategically structured to circumvent a potential veto from Hungary.

Euractiv reported this.

Last month, the EU's Diplomatic Service proposed an initiative to deliver 1.5 million rounds of ammunition to Ukraine. The proposal did not specify financial details.

Given Hungary's continued refusal to participate in any scheme that would support Ukraine both militarily and non-militarily through EU channels, the proposal was reworked to include "participating member states."

The latest version of the proposal states that countries are "recommended to provide military support to Ukraine in 2025 for a preliminary amount of at least 20 billion euros and potentially increase it to 40 billion euros depending on Ukraine's needs."

As a first step, leaders should agree to allocate €5 billion to purchase 2 million units of large-caliber artillery ammunition by 2025.

New scheme

Each country will contribute according to its economic weight, either in cash or directly in kind. The EU itself will count €1.9 billion of its windfall profits from frozen Russian assets as its contribution, although this has already been allocated and partially paid.

The priority should be large-caliber artillery ammunition, air defense systems, missiles, drones, fighter jets, as well as any support for the revival of brigades, which usually includes equipment maintenance and non-lethal support.

The list includes "member states' contributions to security guarantees for Ukraine," without further details. And any other military support that Kyiv considers a priority will be counted as part of this scheme, the text says.

The text was sent to EU countries on March 13, ahead of a meeting of foreign ministers on Monday. Leaders will also meet at a summit next week to discuss, among other things, aid to Ukraine and strengthening defense capabilities.

The deadline for countries to express interest in joining the scheme is April 30.

Rearmament of Europe

Next week, the EU executive is due to present details of its plan to free up €800 billion for joint procurement of European defence equipment and boost production in the sector.

A White Paper on the future of European defence has already outlined steps towards creating a single market for the sector and highlighted critical capacity gaps as Europe's traditional long-standing ally the US pushes for more from its own defences.

Despite the US's desire to resolve the war as quickly as possible, the Europeans have regularly promised to continue supplying Ukraine with weapons so that it can regain territory occupied by Russia, have a strong position at the negotiating table, and maintain its ability to defend itself in the long term.

For reference:

According to the Kiel Institute, Western countries provide Ukraine with a small but steady amount of aid of €80 billion per year.

In total, over the three years, Ukraine has received around €267 billion in aid. Of the total, around €130 billion (49%) was allocated for military aid, €118 billion (44%) for financial support, and €19 billion (7%) for humanitarian aid.