It’s called Act in Support of Ammunition Production (ASAP). It was agreed by the European Commission on 20 March and adopted on 3 May 2023. It aims at ramping up the Eu’s production capacity for ammunition and missiles to”urgently supply Ukraine” and “help Member States refill their stocks”, including through “joint procurement”. “Financial support will be provided in the form of grants to various types of actions contributing to the efforts of the European defence industry to increase their production capacities and tackle identified bottlenecks”. Specifically, the European Commission identified six points:
- Optimising, expanding, modernising, upgrading or repurposing existing production capacities;
- Establishing new production capacities;
- Establishing cross-border industrial partnerships, including through public-private partnerships, aiming, for instance, at securing access to or reserving stocks of strategic components or raw materials;
- Building up and making available reserved surge manufacturing capacities;
- Testing or reconditioning (to address obsolescence) processes with a view to making existing ammunition and missiles useable;
- Reskilling and upskilling related workforce.
* On the cover photo, the International Arms and Military Technology Exhibition in Russia © ID1974/Shutterstock.com
increasing and accelerating EU ammo production
Launching the new measure, European Commission President Ursula von der Leyen said “Ukraine is heroically resisting the brutal Russian invader. We stand by our promise to support Ukraine and its people, for as long as it takes. But Ukraine’s brave soldiers need sufficient military equipment to defend their country. Europe is stepping up its support on three tracks. First, Member States are delivering additional ammunition from their existing stocks, with new European Peace Facility support of € 1 billion.” The European Peace Facility (EPF) is an instrument launched by the European Union on 22 March 2021 to support partner countries worldwide with extra-budgetary resources for conflict prevention, peace-building and strengthening international security as part of a Common Foreign and Security Policy (CFSP). the European Council decided to use this fund to provide military equipment to the Ukrainian armed forces on 28 February 2022, four days after the Russian invasion of Ukraine. It was an unprecedented decision by a supranational organisation of a political nature such as the European Union to start arming a non-member state directly involved in a war. EU’s second and third ASAP tracks were also presented by Von Der Leyen: “together with Member States, we will procure jointly more ammunition for Ukraine – and we are making available an additional billion euro for that. And today, we are delivering on the third track. Ramping up and speeding up the defence industrial production of ammunition in Europe”.
Possible use of Cohesion and RRP funds
For ASAP, the European Commission proposes to allocate €500 million from the redeployment of various instruments, ‘in particular the European Defence Industry Reinforcement through Common Procurement Act’ (EDIRPA). But there’s more. From the outset, Brussels has told member states that they can – if they wish – increase the production of ammunition and missiles by diverting funds from the Next Generation EU, the € 750 billion fund for European recovery, approved by the European Council in July 2020 following the Covid-19 pandemic (also known as the Recovery Fund, the Recovery Plan or the RRP). Countries not interested in this option can use money from the Structural Cohesion Fund, which was set up in 1994 to finance environmental and trans-European network projects in Member States whose per capita GNI is below 90% of the EU average. For the 2014-2020 programming period, more than € 63.4 billion was allocated to 15 Member States (Bulgaria, the Czech Republic, Cyprus, Croatia, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia and Slovenia), rising to € 73.5 billion for the 2021-2027 period. The European Commissioner for the Internal Market, Thierry Breton, reiterated this on 8 May 2023 at the plenary session of the European Parliament in Strasbourg, where a debate was held on the adoption of this new law to support ammunition production under the urgent procedure. The Commission expects an early adoption of this measure before the summer of 2023. “The proposed text does not include any obligations” Breton immediately clarified in response to the objections raised by several MEPs. “We are only emphasising that, if Member States wish, they can use the Cohesion funds and the Recovery Fund.” The European Commissioner for the Internal Market then went on to argue: ‘During my visits to European production sites, I was able to ascertain, particularly and above all in some countries, in Eastern Europe but not only there, that many of these factories in the past were the hub of an important economic fabric. Now this fabric is weaker, but it is clear that by participating again in this common need, it is also this fabric that we will revive,’ Breton promised. ‘A whole local and territorial economy will be reorganised around it. Therefore, we are also within the objectives of the Cohesion funds’,’ the European Commissioner for the Internal Market pointed out. ‘Obviously,’ ‘only if some Member States want it.” He repeated to the European Parliament.
who does what: The European Commission and the Defence Agency
The European Commission is the executive and legislative arm of the European Union. It is based in Brussels, in the Berlaymont Palace and consists of one delegate from each EU member state, called a Commissioner, who must be independent of the national government that appointed them. The European Commission has a monopoly on the power of legislative initiative, as it is responsible for proposing the adoption of EU laws, but final approval rests with the European Parliament and the Council of the European Union. This institution – one of the most important in the EU system – is also responsible for implementing the political decisions of the European Parliament, managing the various EU programmes and spending its structural funds. The Brussels-based European Defence Agency (EDA) was set up by the Council of the European Union in 2004 “to assist the Member States and the Council in their efforts to improve European defence capabilities in the field of crisis management and to support the European Security and Defence Policy as it stands and as it develops”.
FOCUS 1: sector figures
“With a turnover of €119 billion in 2020, 463,000 direct employees and more than 2,500 small and medium-sized enterprises (SMEs), the European defence industry is a major industrial sector,” says the European Parliament fact sheet. “It is characterised by economic and technological components that are important factors for the competitiveness of the European industry (…) The sector has recently decided to address some long-standing challenges, such as market fragmentation and low spending levels, by strengthening joint procurement and increasing EU defence expenditure”. On 29 November, the European Aerospace, Security and Defence Industries Association (ASD) presented its first report on the sector, whose figures are significantly higher than those of the European Parliament mentioned above. The ASD speaks of 3.6 million employees, including direct, indirect and induced jobs. Each direct employee in the sector ‘generates a further 2.8 support jobs’. The total turnover is ‘578 billion euros’. Again, ‘each euro of turnover (…) generates a further 1.40 in support for indirect or related industries’. With these figures, the sector ‘supported GDP by €240 billion’. So much so that the ASD adds that “if it were a country on its own” it would have a gross domestic product higher than that of 14 EU member states, placing it in the middle of the ranking.
FOCUS 2: A field unaffected by the crisis
Despite the European Commission’s decision to allow Cohesion and Recovery funds to be used for the production of new missiles and ammunition, the military sector knows no recession. Not even the Covid-19 pandemic, the logistics crisis and the effects of inflation have affected this sector. According to the latest annual report published on 23rd April by the Stockholm International Peace Research Institute (SIPRI) – an independent research centre that studies the armaments used in conflicts, their control and disarmament policies – total global military expenditure increased by 3.7% in real terms last year, reaching a new high of USD 2,240 billion. In Europe, the growth is unprecedented, with the largest increase in spending (+13%), once again driven by the war in Ukraine. The three countries that have invested most in the military machine are the United States, China and the Russian Federation (the US and Russia are also the largest arms producers), accounting for more than half (56%) of the world total.