EU to allocate EUR 500 million to accelerate production of ammunition

TALLINN - The European Commission on Wednesday adopted legislation supporting the production of ammunition in the EU with 500 million euros.

The Act in Support of Ammunition Production (ASAP) was adopted as a response to the plan agreed by the Council on March 20 to urgently deliver ammunition and missiles to Ukraine and to help member states refill their stocks, Commission spokespeople said.

By introducing targeted measures, including financing, the act aims at ramping up the EU's production capacity and addressing the current shortage of ammunition and missiles as well as their components.

"Ukraine is heroically resisting the brutal Russian invader. We stand by our promise to support Ukraine and its people, for as long as it takes. But Ukraine's brave soldiers need sufficient military equipment to defend their country. Europe is stepping up its support on three tracks. First, member states are delivering additional ammunition from their existing stocks, with new European Peace Facility support of 1 billion euros. Second, together with member states, we will procure jointly more ammunition for Ukraine -- and we are making available an additional billion euros for that. And today, we are delivering on the third track. Ramping up and speeding up the defense industrial production of ammunition in Europe," Ursula von der Leyen, president of the European Commission, said.

"This will help supply more ammunition for Ukraine to defend its citizens and it will also strengthen our European defense capabilities. Together with the member states, we will mobilize a further one billion euros to ramp up capacities across Europe. This is a critical part of Europe‘s strategic capacity to defend its interests and values, and help maintain peace on our continent," she added.

This proposal for a new regulation comprises an instrument to financially support the reinforcement of the union's industrial production capacities for the relevant defense products; a mechanism to map, monitor and better anticipate the existence of bottlenecks in these supply chains; the introduction of a temporary regulatory framework to address the ammunition supply shortage.

The Commission proposes to allocate a budget of 500 million euros in current prices. This budget comes from the redeployment of different instruments, in particular the European Defense Fund and the future EDIRPA.

The proposed regulation comprises measures to support the industrial reinforcement of ammunition and missiles production in the EU, including their input products. Financial support will be provided in the form of grants to various types of actions contributing to the efforts of the European defense industry to increase their production capacities and tackle identified bottlenecks.

In addition, the act will facilitate access to finance for EU companies in the ammunition and missile field, potentially through a dedicated facility, the "Ramp-up Fund". This fund would aim to support undertakings in the ammunition and missile supply chains to have access to both public and private financing, to speed up investments needed to increase manufacturing capacities.

The Commission proposes temporary emergency measures such as the possibility to activate upon request of a procuring member state and in agreement with the member states concerned, priority rated orders towards relevant European companies; targeted measures to speed up administrative processes at national level, by encouraging prioritization of relevant permit granting and certification processes; tailored measures aiming at speeding up common procurement (member states will have the possibility to open an existing framework agreement to other member states that were not originally party to it) and transfers (transfers will be exempted from prior authorization within the European Union).

The Commission counts on a swift adoption, before the summer 2023, to be able to initiate support for the ramping up of the EU's defense industry production capacities of ammunition and missiles. The instrument will cease to apply in mid-2025.