London Daily

Focus on the big picture.

Brussels unveils plan to boost EU defense industry

Brussels unveils plan to boost EU defense industry

Contentiously, the framework would allow tapping new sources of EU money.

European Commission industry chief Thierry Breton has urged European defense companies to get into “war economy mode” as he unveiled a new plan to boost weapons manufacturing across the EU.

The Act in Support of Ammunition Production (ASAP) agreed Wednesday by the European Commission will pump some €500 million from the EU budget into European shell factories to boost weapons manufacturing — matched with co-financing of around €500 million from member countries and other sources.

The aim is to produce 1 million rounds of ammunition within one year.

“In Europe, we still have a real production capacity. It’s there,” Breton said in announcing the plan Wednesday. “What we need to do now is to bring up capacity.”

The framework would controversially permit dipping into new pots of EU cash originally intended for boosting development around the Continent.

In visiting a dozen-plus producers across the EU, the French commissioner says that many sites already have the infrastructure required to make vast amounts of large ammunition. Much of the focus will be on refitting old ammunition.

“In addition to the direct budget, we are also freeing up funding from the cohesion funds,” Breton told POLITICO’s Brussels Playbook on Tuesday, “and also the RRF [Recovery and Resilience Facility funds] for those member states that wish to co-finance their defense industry.” Such funding, Breton argued, “will hopefully re-trigger access to private financing, either via the European Investment Bank, or from [private] banks.”

It’s part of a push to use the EU budget to produce ammo.

Asked Wednesday how he justified dipping into the cohesion and RRF funds for European defense, Breton pointed out that many factories were built in isolated areas. As a result, cohesion funds are “entirely appropriate and well-suited” and would “support our industrial base.”

Similarly, he said that the RRF “will increase our resilience … and our security is clearly part of that.”

He also noted that it will be up to member countries to access cohesion funds.

VMZ Sopot armaments factory, Bulgaria. The EU Commission is to pump €500 million into European shell factories to boost weapons manufacturing


But an EU diplomat, who spoke on condition of anonymity in order to speak freely, has said that even if use of these funding sources “is resolved and legally possible, recovery plans and programming for cohesion funds have already been agreed,” meaning they would have to be renegotiated with the Commission in order to become available.

“Those are difficult and time-consuming processes … so how feasible is it that funds from either source would be available within a reasonable timeframe?” the diplomat added.

The latest defense proposal unveiled by the Commission represents the third of a three-track process spearheaded by European leaders in the wake of the war in Ukraine as the EU scrambles to boost its defense capacity and develop a pan-EU defense strategy.

European leaders agreed to the three-track approach at the end of March.

Parallel to Wednesday’s announcement, EU ambassadors on Wednesday reached a preliminary agreement on the so-called track 2 element of the defense proposal, which aims to spend €1 billion on joint procurement of ammunition and missiles over the next year.

The deal was announced by Sweden, which holds the rotating presidency of the Council, and will become official on Friday if no member country objects.

The challenge was to agree on the legal framework for track 2. Countries had been squabbling over the terms of the program, with some — notably France — reluctant to include non-EU manufacturers in the supply chain.

Speaking today about track 3, Breton said, “We want of course [that] projects are produced in Europe.”

The compromise text for track 2, seen by POLITICO, states that “ammunitions and missiles which have undergone an important stage of manufacture in the Union or Norway which consists of final assembly shall be deemed eligible.”

A different EU diplomat, who also spoke on condition of anonymity in order to speak freely, praised Swedish agility in the negotiations: “The Presidency has done a very good job of combining the need to devote track 2 to the European defense industry, so that it ramps up in the production of ammunition and missiles … and the specific characteristics of the defense industry of each of the member states.”

Newsletter

Related Articles

London Daily
0:00
0:00
Close
Netanyahu Denounces World Court Ruling on Israeli Occupation
Adidas Drops Bella Hadid Over Controversy
Global Outage Caused by CrowdStrike Update Impacts Millions
Massive Flight Cancellations Across the U.S. Due to Microsoft Outage
Global Windows Outage Causes Chaos Across Banks, Airlines, and More
Russia Accuses Ukraine of Using Chemical Weapons
UK's Flawed COVID-19 Planning Exposed by Inquiry
Ursula von der Leyen Wins Second Term as European Commission President
Police Officer Injured in Attack in Central Paris
Hulk Hogan absolutely tore it up at the RNC.
Paris is being "cleansed" of migrants and homeless people ahead of the Olympics.
Lamine Yamal arriving at his school after winning the Euros
Campaigners Urge UK Government to Block Shein's London IPO
UK Labour Government's Legislative Agenda
UK Labour Government to Regulate Powerful AI Models
Record Heat Temperatures in Ukraine Amid Power Crisis
UK Government Plans to Remove 92 Hereditary Peers from House of Lords
King Charles III Delivers Labour Government's First King's Speech
Officials Remove 'Disastrous' Label from Liz Truss's Mini-Budget
Keir Starmer Outlines Ambitious Plans for Government
Japan to Allocate $3.3 Billion to Ukraine Using Frozen Russian Assets
EU Parliament Condemns Hungarian PM's Russia Visit
FBI Struggles to Find Motive Behind Trump Shooting Incident
Kremlin Criticizes EU Rejection of Orban’s Ukraine Peace Proposal
Google and Microsoft Now Consume More Power Than Several Large Countries
Secret Service Criticized for Lack of Sniper Protection During Trump Shooting
US Senator Robert Menendez Found Guilty of Corruption
Deep Concerns about Political Violence as US Approaches Election Day
Trump Media Shares Surge Following Re-Election Bid Boost
The gunman who attempted to assassinate Donald Trump Saturday is 20-year-old Thomas Matthew Crooks
Banksy's Influence on Port Talbot's Street Art Scene
Bodies of Two Men Found in Suitcases on Bristol Bridge, 24-Year-Old Arrested
Kate Middleton to Attend Wimbledon Men's Final Amid Cancer Recovery
Russia's Electronic Warfare Neutralizes Western Weapons in Ukraine
Trump Challenges Biden to Debate and Golf Match
Macron Accuses Israeli Minister of Election Interference
US Senator Highlights Weaknesses in Western Military Industry During Ukraine Conflict
George Clooney Urges Biden to Withdraw from Presidential Race
Political Shift in the UK: A Detailed Analysis of Labour's Victory and Future Prospects
Viktor Orbán's Peace Mission: A Diplomatic Controversy in the EU
India Advocates Peace and Prosperity: PM Modi's Speech in Austria
New UK PM Keir Starmer Reaffirms Strong Support for Ukraine at NATO Summit
Spain PM Pedro Sanchez Denounces Double Standards on Gaza at NATO Summit
UK Police Arrest Suspect in Crossbow Attack After Three Women Killed
Sunita Williams Safe on ISS, to Address Earth on July 10
Biden Affirms Commitment To Presidential Race
France Faces Political Turmoil and Airport Strikes Ahead of Paris Olympics 2024
Putin Hosts PM Modi for a Private Meeting
TSMC: The Taiwanese Chip Giant Valued Over $1 Trillion
Boeing Pleads Guilty Over 737 MAX Crashes
×