BRUSSESLS, May 3. /TASS/. The European Commission has been drafting a package of documents to speed up the process of militarization of the EU economy, making the arms industry one of the priorities of its economic development, several independent diplomatic sources in Brussels have told TASS.
In line with the package, the weapons and ammunition industry will be named a priority area of the EU economic development, along with green energy and clean production.
As part of the same package, the European Commission will unveil on Wednesday an initiative to launch the production of artillery munitions. EU institutions and member states will invest 1.5 billion euro into the effort.
“The European Commission and the EU members have been coordinating an initiative to give priority financing to the military industry, primarily to the production of ammunition. Among other things, the European Commission suggests that EU members, who invest significant funds into the development of the defense industry, are granted exemptions from the union’s budget deficit and state debt requirements. This will allow countries to invest more actively into defense projects,” one European diplomat told TASS.
So far, similar exemptions can only be granted to projects related to green energy or clean production.
The exemptions will be granted within the framework of the EU Stability and Growth Pact (SGP), a set of fiscal rules designed to prevent member states from spending beyond their means. The document sets the threshold for a member country’s budget deficit at 3% of the GDP and for the state debt at 60%. The requirements were put on hold at the beginning of the COVID 19 pandemic, and practically all member states are violating those rules at the moment. However, the European Commission plans to resume their gradual enforcement since the beginning of 2023.
Shells and missiles
“Several documents, which are now being drafted by the European Commission, will assign the priority status to boosting the defense production. The closest short term objective will be to scale up the production of 155mm artillery shells, mortar rounds and various types of surface to surface and surface to air missiles, intended both for delivery to Ukraine and for replenishing Europe’s arsenals,” another source said.
“On Wednesday, the European Commission will roll out a roadmap for increasing the production of ammunition, allocating for the purpose 500 million euro from the EU budget and 1 billion euro from the Europe Peace Foundation,” he added.
Demand for munitions
The official in charge the European Union’s militarization is the current Commissioner for Internal Market Thierry Breton, who has been paying frequent visits to industrial and military industrial facilities of the European Union since February.
During those visits, Breton examines the defense industry’s needs, searching for opportunities to scale up production and provide guarantees to entrepreneurs. In order to invest heavily into the defense sector, the European Union needs to make sure that the demand for weapons and ammunition will remain stable after hostilities in Ukraine are over.
European arms makers also have grounds to fear competition with the US military industry, the largest supplier of weapons and military equipment to the NATO countries. According to European media reports, the European Commission is discussing with the member states the possibility of assigning the priority status to European arms makers while choosing contractors for national defense procurement orders. That said, US manufacturers should be allowed to enter the market only by the residual principle.
Germany, France and Italy actively promote this approach, while Poland, Baltic countries and a number of other nations are resisting it.
