Britain’s defense industry will not be able to benefit from a massive increase in EU arms spending on Ukraine, according to a leaked plan seen by The Guardian.
A ‘mass order’ of ammunition is being prepared in Brussels, ranging from small arms to 155mm artillery shells, but only manufacturers from the EU and non-EU Norway will be able to order it. to use.
France, Germany and Italy, home to Europe’s biggest arms producers, stand to benefit the most at the expense of the UK, which is the world’s seventh-largest arms exporter.
“It is essentially a zero-sum game and the proposal will strengthen the European defense industry to the detriment of those outside the Union,” said a diplomatic source in Brussels.
The EU is close to agreeing on its historic decision to jointly buy munitions to help Ukraine in its conflict with Russia and to replenish member countries’ stockpiles. The plan involves the immediate transfer of ammunition stocks and the “rapid” dispatch of new joint orders to meet the needs of the EU and Ukraine under the “strong and strong signal of the industry of the EU”.
Estonian Defense Minister Hanno Pevkur said on Monday he believed ministers would reach a “political consensus” on joint procurement when they meet in Stockholm on Wednesday.
According to a leaked discussion paper to be presented to ministers, member states are initially asked to provide Kiev with their stocks of spare ammunition, up to 90% of the cost of which could be reimbursed by Brussels.
A seven-year plan will also be launched this spring, under which European industry will be invited to increase production to meet the needs of Ukraine and the Member States.
“The combined needs of Member States and Ukraine provide the opportunity to place a large order to send a clear signal of demand to industry, allowing it to increase its production capacity in an orderly and sustainable way throughout the world. ‘Europe,’ the leaked document reads. said.
According to the document, 25 EU member states and Norway have confirmed their interest in participating, writes The Guardian.
The document calls for “accelerated” negotiations with suppliers from the EU and Norway on the size and value of these orders, with contracts to be awarded “between the end of April and the end of May”.
The EU policy discussion paper, known as the non-paper, notes that there may be problems with the current ability of European industry to meet the demands placed on it.
The solution is not to turn to other major global suppliers such as the UK, but rather to develop a new industrial policy that could trigger a “rapid expansion of manufacturing capacity”, the document says.
The loss of the European market for the export of ammunition will be a blow for British companies, notes The Guardian. According to ADS, the Defense Trade Association, the UK arms industry has an annual turnover of around £25 billion and employs around 133,000 people directly and a similar number indirectly.
Shadow Defense Secretary John Healey has accused the government of hurting British industry by failing to maintain positive relations with the EU after Brexit. “Once again, UK defense companies are at their wit’s end under the Tories. Ministers are expected to negotiate a better deal for UK businesses. The Labor government would restore relations with European allies to ensure UK security and promote greater military-industrial cooperation.
According to the Stockholm International Peace Research Institute, the top five arms exporters from 2017 to 2021 were the United States, Russia, France, China and Germany. Norway was the 22nd largest arms exporter.
The UK has so far provided £2.3 billion in military aid to Ukraine and has pledged to increase this aid in 2023. The EU has provided non-lethal and lethal weapons through the through its European Peace Fund (EPC), with €3.6bn (£3.2bn) to date. However, the total amount the EU can spend through EPC until 2027 has been increased to €5.5 billion.
Once these funds are “introduced”, the EU High Representative for Foreign Affairs, Josep Borrell, “intends to offer emergency support of 1 billion euros intended for the supply of ammunition, in particular 155 mm (shells ),” the document says.
Subsequent joint purchases will be made through the European Defense Agency (EDA), which was created in 2004 to help member states coordinate their armed forces. EDA can only buy from companies based in the EU and Norway, with which the bloc has had an administrative agreement since 2006 – an agreement which was extended to cover defense purchases in 2008.
