Brussels plans ‘wartime economy’ to arm Ukraine

European Commission tables plans for joint purchases of ammunition, especially 150mm shells, as early as this month.

A Ukrainian anti-aircraft unit at Siversk, Donbas region, on Tuesday. Picture: AFP

The EU is planning centralised defence spending to boost the production of munitions to a “wartime economy model” as Europe prepares for “high-intensity conflict” with Russia.

The European Commission has tabled plans for joint purchases of ammunition, especially 150mm artillery shells, to supply Ukraine as early as this month. It hopes to fill national armouries depleted from supplying Kyiv since Russia’s invasion last year.

Plans for “joint procurement of ammunition” for Ukraine and EU member states were being discussed by the bloc’s defence ministers at an informal dinner in Stockholm overnight on Tuesday.

Thierry Breton, the internal market commissioner, will make the case amid concerns that his plan will create new divisions in NATO by ruling out ammunition supplies from Britain, the US and other non-EU providers.

“It is time that the European defence industry moves to a wartime economy model to cater for our defence production needs,” he said before the talks. “I am fully determined to support the production ramp-up of the European defence industry to face the realities of a high-intensity conflict.”

An Orthodox priest leads a memorial service for volunteers in Kyiv’s Saint Michael's Golden-Domed Monastery on Tuesday. Picture: AFP

Britain and other non-EU NATO allies are concerned that centralised Brussels arms procurement would be protectionist and would build bureaucratic barriers within the alliance.

According to a confidential paper seen by The Times, the EC has drawn up a three-point plan, beginning with a proposal “to immediately transfer ammunition, notably 155mm, from existing stocks or pending orders” to Ukraine.

Brussels is planning to use EU funds worth €1bn ($1.7bn) for the artillery shells, with the aim of using joint procurement to replace up to 90 per cent of national stocks. The commission plans to use an existing European Defence Agency project to make large defence orders and to send “a strong and massive signal to EU industry”.

The commission paper says that “in view of the urgency, the project arrangement needs to be signed no later than March. Once it enters into force, the European Defence Agency will be able to negotiate and conclude contracts on behalf of member states, paving the way for actual order to be placed with EU industry”.

In the longer term, the “overall objective should be to support, including with the support of the EU budget where possible, industrial manufacturers” in meeting ammunition supplies.

Fears of protectionism have been stoked by the commission’s decision to ignore an existing body, the Organisation for Joint Armament Co-operation. The body, the product of a 1998 treaty, is used for 16 joint defence procurement programs, including missiles, aircraft, armoured vehicles and ships, and it has years of experience developing common standards and quality-control testing.

While Germany and Poland back the procurement of the best-available munitions, regardless of whether they are made in the US, Britain, Norway, Canada or South Korea, other countries want to channel cash to support their national industries. France, Italy and Spain support using the procurement plan to favour industries in their countries and the EU, especially for investment and building new factories. During NATO talks, the UK raised concerns that the British defence industry, with close links to Europe via the alliance, would be excluded from joint procurement, creating obstacles to supplies of armaments.

The Times