1675057642 How is the EU financing war equipment for Ukraine

How is the EU financing war equipment for Ukraine?

For weeks, the Western Allies put increasing pressure on the German government. Berlin has now agreed to deliver 14 Leopard 2 tanks to Ukraine to help repel the Russian invasion. For Germany, this decision marks a significant change in policy, as the country was previously reluctant to send heavy weapons.

Despite initial hesitation, Germany has provided Ukraine with significant military support since the war broke out in February last year. According to data from the Kiel Institute for the World Economy, 2.3 billion euros were pledged for this up to last November.

But how are Germany and its European allies funding these weapons for Ukraine? Funding for equipment and funding comes from a number of different sources.

Delivery of Bundeswehr stocks

Some of the military equipment shipped from Germany to Ukraine comes from Bundeswehr stockpiles. For example, according to the London-based International Institute for Strategic Studies, Germany has over 300 Leopard 2 main battle tanks.

The German government published a list of Kyiv support payments. These include, for example, five MARS II multiple rocket launchers with ammunition, 14 self-propelled howitzers 2000 (in a joint project with the Netherlands), 22 million rounds of small arms ammunition and 14,000 sleeping bags.

Publicly funded orders for the defense industry

In no other EU country is the arms industry as important as in Germany. Last year, the German government invested 2 billion euros in arms aid to partner countries, which is intended to support allies in a crisis and which currently benefits Ukraine in particular. With this money, military equipment can be ordered from German companies, which are sent to Ukraine.

For this year, Germany has earmarked 2.3 billion euros for this arms aid. Most of them are destined for Ukraine. Recently, for example, 107 border guard vehicles were financed with these funds.

EU funds for lethal and non-lethal weapons

Shortly after Russia launched its military offensive in Ukraine last February, the EU took the historic decision to use money from a relatively new fund, the European Peace Facility (EFF), to support Ukraine. For the first time, the fund was used to supply lethal weapons, ie potentially lethal weapons, to a third country.

Leopard 2 tanks during an exercise

The Bundeswehr has over 300 Leopard 2 main battle tanks

Since then, the EU has provided around €3.6 billion in pooled funds to the Ukrainian military, out of which lethal and non-lethal support services have been funded. The value of contributions to the European Peace Fund depends on the economic performance of member states. Germany, with the highest GDP within the EU, therefore makes the biggest contribution.

The EFF can also reimburse member states for money they spent on military aid to Ukraine. Poland, for example, is among Ukraine’s main military supporters and has already hinted that it will seek EU funds to cover the cost of the Leopard 2 tanks that Warsaw plans to supply Kyiv.

Berlin solution: the exchange of rings

The announcement of the supply of Leopard 2 tanks to Ukraine marks a change in Germany’s willingness to send heavy weapons to Ukraine. Previously, the government had succeeded with so-called ring deceptions. Germany did not deliver certain weapons – in particular battle tanks and other heavy war equipment – ​​to Ukraine, but to NATO partner countries. These countries then supplied arms to Ukraine from their own older stockpiles.

Soldier in front of Leopard 2 tank

In an exchange of rings with Germany, the Czech Republic received German tanks

The legacy of the Second World War is also felt in the matter of direct deliveries of heavy weapons to Ukraine. With the exchange of alliances, Germany was able to circumvent this controversial issue and still demonstrate its solidarity. At the same time, Berlin contributed to the military modernization of NATO countries.

So far, the results of this complicated model have been mixed. Poland was critical of the idea, but the ring swap worked for other EU countries, including the Czech Republic, Slovakia and Slovenia.

Adapted from English by Phoenix Hanzo.