The EU is preparing a new plan that would allocate $22 billion in military support for Ukraine, the Wall Street Journal (WSJ) reported on Jan. 21, citing internal EU documents.
Under the current EU tool used for channeling military support to Ukraine, the European Peace Facility (EPF), member states receive reimbursement for weapons they send to Ukraine, with the decisions to allocate and disburse funds requiring unanimous support.
EU members have argued over reimbursement rates and the use of the EPF to offset purchases. Hungary has blocked an eighth tranche of funding to compensate EU countries for supplies. Ukraine has not received funds from the EPF for six months as a result, although individual member states have pledged military aid in the interim period.
The new proposal would seek to approach the deadlock with a plan to disburse the $22 billion back to EU member states over the next four years in compensation for funds they have spent on military aid for Ukraine.
“Given the dependence of Ukraine on external support, the choices made by the EU member states and partners in the coming period will either allow Ukraine to decisively progress or will seriously undermine its ability to resist,” the proposal reads.
The bulk of the funds would go toward compensation to member states, valued at around 7.5 billion euros per year ($8.1 billion). The remaining money would be spent on EU training programs for Ukrainian soldiers, which have increased and already trained more than 40,000 soldiers.
The proposed plan is designed with Hungary's possible obstruction in mind, avoiding the regular disbursement of aid that can be blocked by a single member state. It would instead create a more consistent and predictable funding source over a longer period.
Bloomberg reported on Jan. 19, citing internal EU sources, that the bloc was seeking to reform the EFP by modifying the fund's governance, including fixing its reimbursement rates and giving a higher bonus for joint initiatives between European and Ukrainian industries.
It is unclear if the documents that the WSJ reported on are related to the proposed EPF reforms cited by Bloomberg.
The EU is also set to meet on Feb. 1 to vote again on a $54 billion package of economic aid to Ukraine previously blocked by Hungary in December.
There have been inconsistent signs about Hungary's willingness to support the package, but the EU has also been working on a backup plan in case Hungary again tries to prevent its passage.
Martin Fornusek
