EU Plans to Include Ukraine in Defense Industry Support Scheme
The European Commission will propose to make Ukraine a full member of the EU's defense industry support scheme, according to a European Commission draft proposal seen by Euractiv. One of the three goals of the European Defence Investment Programme proposal is aimed at "contributing to the recovery, reconstruction and modernisation of the Ukrainian defense technological and industrial base and progressive integration into the European, thereby contributing to mutual stability, security, peace, prosperity and sustainability." For this, Ukraine should be allowed to become a full member of any country-consortium to jointly procure military equipment with other EU member states, have access to EU funds, and receive VAT-exemption for joint ownership, the draft text says.
The EDIP regulation will be presented by the European Commission on Tuesday, March 5, alongside an over-arching political EU defense strategy.
The European Commission. Photo credits: Getty Images
Ukraine would, therefore, be given a special place in the Programme to support European joint procurement of weapons and bolster the Union's military-industrial complex benefiting from EU funds. Previous defense-industrial programs adopted by EU lawmakers have never considered any third country as a rightful full participant in the schemes besides Norway.
EDIP
Ukraine's accession to the EDIP would be an important step in the formation of Europe's military-industrial complex, given Kyiv's experience in using defense equipment for two years and the process of joining the European Union.
As Ukraine needs large quantities of defense products, especially ammunition and drones, Kyiv is working with EU companies to establish joint ventures, direct purchases from EU industry, and develop large drone production facilities. Two years of war also gave the Ukrainian army experience in testing and using modern weapons. According to the draft regulation, "contributing to the recovery, reconstruction and modernisation of the Ukrainian defense technological and industrial base" is a way to "support[ing] defense readiness of the Union and its member states".
Outside EU borders, the member states' industry faces challenges tospeeding up production while waiting for contracts after decades of under-investment following the Cold War. "Faced with a high-intensity conflict, the Ukrainian defense and technological, industrial base had to shift to a war economy model," the draft defense strategy states, and so [it] "will emerge as one of the best engines of the economic recovery of the country at the end of the war and testbed of the defense industrial readiness".
Security commitments
The cooperation of Ukraine's industry with the EU is a core aspect of the 'security commitments' the EU's diplomatic service discussed offering Ukraine. "Ukraine is and will increasingly be a crucial partner in the Union in the defense industrial sector, notably given its full accession process," the unpublished text of the defense strategy states.
The draft document also foresees a specific budget for the Ukrainian military-industrial complex.
Work on the Leopard 2A4 tank. Photo credits: AFP/Getty Images
The document does not specify the overall financial envelope attached, although it is supposed to come with a budget of at least EUR1.5 billion, according to a European Commission official.
Under the plan, Ukraine would need to adhere to several regulations to qualify as an EU member state, as outlined in the draft text. One of the stipulations includes a prerequisite related to the rule of law, mirroring the trajectory it must undertake in its journey towards accession. Ukraine shall "continue to uphold and respect effective democratic mechanisms, including a multiparty parliamentary system and the rule of law, and to guarantee respect for human rights, including the rights of persons belonging to minorities, thereby contributing to mutual stability, security, peace and prosperity."
The European Commission would also consider evaluating the "security context" to assess its continued support.
As previously reported, Ukraine established five joint defense enterprises with Western arms manufacturers aimed at bolstering the Ukrainian Defense Forces.