The intentions are good and the money a lot. The European Union has an ambitious plan to supply Ukraine with necessary ammunition, but also to strengthen the European defense industry. However, the project is a crucial test for the credibility of the common European defense efforts and a terrifying challenge for a Union that was born as an economic project and has “no idea of war”.
With Ukraine consuming ammunition faster than the entire Western world’s arms industry can immediately produce to replace it, the EU’s first priority is to strengthen and expand its munitions manufacturing capacity.
It has already agreed to spend 1 billion euros on a joint order of artillery shells, mainly 155mm. In this coalition, which will be modeled on collective vaccine purchases during the pandemic, 18 countries – including non-EU Norway – have agreed to send 1 million rounds to Ukraine this year.
There is no guarantee of timely delivery
However, while Defense Commissioner Thierry Breton visited munitions factories in Central Europe last week and spoke of creating a “war economy” in the EU, the Commission admitted it may not be able to meet Ukraine’s needs.
“The signing of major contracts, consolidated at European level, will send the right message to the industry to take action. But this is no guarantee of timely delivery,” Commissioner Mairead McGuinness told the European Parliament.
The “thorns”
To address this concern, the EU’s new Joint Defense Procurement Task Force mapped production capacity in the 27-nation bloc, identifying 15 manufacturers in 11 countries that make various types of ammunition used by Ukraine. However, the devil is in the details.
The first challenge is trying to match projectile orders with the range of guns and tanks being procured by Ukraine, as not all 155mm projectiles are created equal.
Then there is a complex supply chain – already burdened by global demand for raw materials – that needs to be coordinated.
There is also the fact that BAE Systems – another of Europe’s leading munitions makers, along with France’s Nexter – has been excluded from the EU program due to Brexit. So, although it has contracts with the British government to increase production to supply Ukraine, it will not benefit from joint EU orders.
Finally, there is the “sensitive” issue of who will manage the joint orders – the EU or a state that will be put in charge.
Is EU able to do it?
Under the strategy, proposed by Breton and High Representative for Foreign Policy and Defense Josep Borrell, the European Defense Agency (EDA) will serve as the contracting authority for the project. But critics say the small intergovernmental organization, which was created in 2004 to promote defense integration among member countries, has little experience managing such complex contracts.
A German official, speaking on condition of anonymity, said the EDA is more of a think tank than a procurement agency.
Meanwhile, the war industry complains that they are not seeing any deals being signed. The order book of Germany’s Rheinmetall – one of Europe’s three biggest munitions makers – swelled by 40 percent in 2022, but production is now running at only two-thirds of capacity pending new contracts.
“I need orders. Without orders, I won’t be able to build anything,” Germany’s Rheinmetall CEO Armin Papperger told Bloomberg as he announced record profits last week. “Any shortage of ammunition will not be the fault of the defense industry,” he added.
