Brussels plans to finance joint EU weapons procurement for the first time

The European Commission will for the first time provide financing for the joint procurement of weapons by member states to help their armies restock and improve military hardware in response to the war in Ukraine.

The proposal, unveiled by internal market commissioner Thierry Breton on Tuesday, would give financial incentives for consortiums of at least three member states to purchase weapons. It seeks to channel the increase in EU defence spending towards co-ordinated procurement and to prevent larger member states from monopolising the continent’s arms companies.

If approved by member states and EU lawmakers, the €500mn initiative would mark the first time Brussels has used EU taxpayer money to fund joint arms procurement.

The proposal follows the EU’s landmark decision to spend billions of euros to fund weapons supplies to Ukraine following Russia’s invasion — shipments that have drained national arms stockpiles.

“Today we are taking a historic step forward in European defence integration,” Breton said. “This initiative will make it possible to replenish part of the stocks following Europe’s united and supportive response by way of transfer of arms to Ukraine.”

He added: “And by contributing with the European budget, we are creating an incentive for member states — many of which have announced a significant increase in defence spending — to buy together. This will make it possible to spend public money better, and to boost our European industrial base.”

The war in Ukraine has led to a sea change in EU military thinking, both in terms of the perceived Russian threat and in prompting governments to reverse years of defence spending cuts and raise collective budgets by more than €200bn.

The commission’s proposal would see Brussels reimburse about 10 to 15 per cent of the cost of new weapons if bought from an EU defence company by a group of EU states in the two years following February 24 of this year — the day Russian president Vladimir Putin launched his full-scale attack on Ukraine — according to a senior EU official with knowledge of the plan.

While officials admit that the €500mn initiative will only stretch to a fraction of budgeted EU defence spending over the next two years, that tranche is envisaged as a first instalment that could be increased if the initiative is successful.

“It’s not a lot. But it is not nothing,” said the senior EU official. “It’s a major breakthrough conceptually, politically and legally . . . but if we want this to be credible then we need a big number.”

Some member states had already discussed common purchases of portable surface-to-air missiles, anti-tank missiles and artillery under the commission initiative, the official added.

The EU has long attempted to coerce its members into making joint arms purchases and pooled investments into new weapons systems, in an attempt to make its members’ armed forces more compatible and co-ordinated.

While previous efforts foundered as governments sought to instead protect their national defence industries or rely on US equipment, officials hope the surge in defence spending prompted by the war in Ukraine and the threat posed by Russia to the EU’s eastern flank will provide significant motivation.

In 2020, just 11 per cent of EU states’ national defence budgets was spent in collaboration with other bloc governments — well below the 35 per cent target set by Brussels’ own European Defence Agency. That has resulted in the EU’s armies using various and often incompatible weapons systems.