EU’s 20 Billion Euro Plan for Ukraine Military Aid Hits Resistance

BRUSSELS (Reuters) – A European Union plan to spend up to 20 billion euros ($21.4 billion) on military aid for Ukraine is meeting resistance from EU countries and may not survive in its current form, diplomats say.

Josep Borrell, the EU’s foreign policy chief, proposed in July that the bloc create a fund with up to 5 billion euros a year over four years as part of broader Western security commitments to bolster Ukraine as it fights Russia’s invasion.

But as EU defence ministers prepare to discuss the plan in Brussels on Tuesday, diplomats say multiple countries – including EU heavyweight Germany – have voiced reservations about committing such large sums years in advance.

The EU and its members have been among the biggest donors of military aid to Ukraine since Russia launched its invasion in February 2022, providing arms and equipment worth some 25 billion euros, according to the bloc’s diplomatic service.

Borrell’s proposal was an effort to put support on a longer-term footing, by creating a cash pot for Ukraine aid inside a bigger fund, the European Peace Facility, used to reimburse EU members for military assistance to other countries.

“I’m not going to declare it dead at this point yet. But of course, improvements can always be made,” a senior EU diplomat said on Friday, speaking on condition of anonymity.

“Germany has had a lot of questions … and rightfully so. We’re talking about a lot of money.”

The debate over military aid comes as EU nations are also in discussions over a proposal to give Ukraine 50 billion euros in economic assistance.

The EU is also facing challenges over other aspects of its military aid to Ukraine.

Many officials and diplomats say the bloc will struggle to meet a target of supplying Kyiv with 1 million artillery shells and missiles by March next year.

And Hungary has for months been holding up 500 million euros in payouts from the Peace Facility to EU members for Ukraine aid over Ukraine’s blacklisting a Hungarian bank, OTP.

Since the bank was removed from the blacklist, Hungary has been insisting it wants guarantees it will not return there.

EU governments have stressed that long-term EU military aid must be coordinated with security packages that individual EU countries are negotiating with Kyiv, making it hard to settle on a price tag while those talks are ongoing.

At an EU summit last month, German Chancellor Olaf Scholz said the focus for now should be on such bilateral packages.

Some EU members have also argued they will struggle to make a big long-term pledge as domestic budgets are squeezed.

“For some member states, there is the reality of the public finances,” said a second EU diplomat.

A third EU diplomat said the likelihood of Borrell’s original proposal being adopted was declining but many countries still wanted to have a commitment at EU level.

Three diplomats suggested the EU may end up deciding to go year-by-year with its commitments, rather than signing up for a larger amount stretching over four years.

(Additional reporting by Krisztina Than; editing by David Evans)

Copyright 2023 Thomson Reuters.