We are out of shells, out of money too. Where to get it? There were several proposals on the table in Brussels during the EU summit. But this notorious million European shells, promised by the end of March, as it turns out — cannot be found. Meanwhile, the month is ending.
The first offer came from the Czech Republic. Petr Pavel suggested at the Munich Conference to buy ammunition outside the European Union, since its own industry cannot cope. We should buy 800,000 shells outside our bloc, the Czech leader suggested. He was supported by France and the Netherlands.
As it was decided at the EU summit in Brussels, the money will be taken from the Russians. The frozen assets of the Central Bank of Russia amount to more than €200 billion (€210–215 billion, to be precise), and the bank interest on this money amounts to €3 billion a year, according to the calculations of the head of European diplomacy, Josep Borrell. European leaders have decided that the interest gained from these assets can easily be used to help Ukraine.
90 percent of that money goes to the European Peace Fund, and 10 percent comes from the EU budget. This looks very good on paper, but it contradicts the norms of international law, as Moscow has warned, and it is really hard to object. In case Russia challenges this decision in an international court, it will win the case and the money will have to be returned, writes the British Guardian.
If this source of funding doesn’t work out, then 14 EU countries (well, I’ll have to list them: Germany, France, Italy, Finland, Bulgaria, Czech Republic, Denmark, Estonia, Lithuania, Latvia, Poland, Romania, Sweden and the Netherlands) have addressed an open letter to the European Investment Bank, and this is the main financial body of the EU, with a request to give money due to new circumstances arising in 2022.
Estonia initially came up with this proposal, and it was supported by France. Why can we raise money to fight the pandemic and cannot borrow money from the European Investment Bank now?
According to calculations of the Institute of International and Strategic Relations, on 100 billion euros allocated for the defense of Europe from 2022 to the middle of 2023, 63 percent went to purchases from the United States, and 13 — from South Korea. And now it turns out that 68 percent of European spending on aid to Ukraine is still spent on purchases in the United States.
By 2030, according to the European Commission, the share of purchases of military equipment from the United States should be reduced to at least 50 percent. That is why the EU summit decided to shift the center of gravity of arms production and procurement from the United States to Europe.
This decision was taken also because the notorious $60 billion of US aid is stuck in the US Congress and it is not very clear when this dam will burst.
The next initiative is to bet on European defense companies and pour money into them. For this purpose, the European Investment Bank will give additional loans to European defense companies. But these companies are already working 24/7, such as the French Thales factories in Northern Ireland, which produce missiles for air defense systems.
«We’ve never produced so many missiles, and we’ve doubled production since 2022», says Alex Creswell, president of Thales’ UK subsidiary. — «And now, we’re getting orders for twice as many. In the next two years, our production will grow incredibly».
In other words, European defense companies independent of U.S. components will now only prosper. The French «les Forges de Tarbes» has signed a contract with a Ukrainian manufacturer (well, rather, a consumer) to produce 60 thousand blanks for 155-mm shells. It is expected to double its output by 2026.
Following the same logic and in accordance with the decision of the European Union, German giant Rheinmetall will build 4 factories for the production of shells in Ukraine. This year their design capacity is 500,000 shells, and next year — 700,000.
Another proposal, where to get money from, was voiced by the President of the European Commission. Namely: to impose an additional tax on the export of Russian grain, barley and oilseed crops to the EU. By 50 percent at once. It seems to have no direct relation to military operations, but at least Anglophones have learned a new word — weaponize.
«There are several good reasons for making this proposal», Ursula von der Leyen said, «First, it will prevent the Russians from destabilizing the EU grain market. Secondly, it will prevent Russia from using the export revenues for military purposes, i.e. weaponize. And thirdly, we will get guarantees that Ukrainian grain will not get through Russia to the EU market».
Well, and the last option — to chip in. Estonia has thrown on the table €20 million. The country’s prime minister calculated that if all countries gave 0.25 percent of their GDP to help Ukraine, the issue of hostilities would be solved immediately.