The Council presidency has reached a provisional agreement with the European Parliament representatives on the Act in Support of Ammunition Production (ASAP).
The agreed regulation will urgently mobilise €500 million from the EU budget (in current prices) to support the ramp-up of the manufacturing capacities for the production of ground-to-ground and artillery ammunition as well as missiles.
In doing so, it will implement the third track of the plan agreed by the Council in March 2023 to secure the long-term increase in European ammunition production to the benefit of Ukraine and EU member states.
The agreed rules introduce an ‘Instrument’ through which the EU will financially support the reinforcement of the EU industrial production capacities for ammunition and missiles throughout the supply and value chains. Such 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.
Furthermore, the new rules will facilitate access to finance for EU companies in the ammunition and missile field, potentially through the so-called ‘Ramp-up Fund’. This fund is intended to make it easier for companies manufacturing ammunition and missiles across the value chain to access both public and private financing, to speed up investments needed to increase manufacturing capacities.
The European Commission has adopted the Act in Support of Ammunition Production |
Next steps
The provisional agreement must now be endorsed by the Council and the Parliament. It will then be formally adopted by both institutions following legal-linguistic revision. Signature and entry into force is foreseen to take place before the end of July.
Background
The 2022 Joint Communication on Defence Investment Gaps highlighted that continued underinvestment in defence has resulted in both capability and industrial gaps in the EU.
The Russian war of aggression against Ukraine has exposed the European defence and equipment market to even bigger challenges, as the EU and its member states have stepped up their efforts to meet Ukraine’s pressing defence needs.
On 20 March 2023, the Council agreed on a three-track approach, aiming to provide one million rounds of artillery ammunition for Ukraine in a joint effort within the next twelve months. It agreed to urgently deliver ground-to-ground and artillery ammunition to Ukraine and, if requested, missiles from existing stocks or the reprioritisation of existing orders (track one). It further called on member states to jointly procure ammunition and, if requested, missiles from the European defence industry and Norway; this would happen in the context of an existing project coordinated by the European Defence Agency or through complementary member state-led acquisition projects, in order to refill their stocks while continuing to support Ukraine (track two).
The Council also invited the Commission to present concrete proposals to urgently support the ramp-up of manufacturing capacities of the European defence industry, secure supply chains, facilitate efficient procurement procedures, address shortfalls in production capacities and promote investments, including, where appropriate, mobilising the Union budget (track three).
More information: Council of the EU
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