Key facts
- Ukraine is requesting €6.6 billion from the European Peace Facility for military aid.
- Ukraine's total defense needs are estimated at €136 billion for the year.
- Poland seeks approximately €450 million in reimbursement for military aid provided to Ukraine.
- Germany supports allocating the funds directly to Ukraine.
- The European Peace Facility is an off-budget fund established in 2021 to finance EU defense needs.
Ukraine is urging the European Union to allocate €6.6 billion ($7.5 billion) from the European Peace Facility towards military aid, viewing the next six to nine months as a critical battlefield opportunity. Ukraine's Defence Minister Mykhailo Fedorov stated in a letter reviewed by Reuters that the country's total defense needs this year are estimated at approximately €136 billion, with its own budget covering about €53 billion.
A division has emerged within the EU over the distribution of these funds. Poland is demanding full reimbursement, around €450 million (2 billion zlotys), for the military aid it has already provided to Ukraine. Polish Deputy Minister Cezary Tomczyk asserted that the money belongs to member states that were early providers of support. In contrast, Germany, a significant contributor to the European Peace Facility, advocates for the funds to be transferred directly to Ukraine, with German Defense Ministry Secretary Sebastian Hartmann emphasizing that Germany is prepared to forgo compensation.
The European Peace Facility, established in 2021, functions as an off-budget fund through which EU member states first supply weapons and equipment to Ukraine and then receive reimbursements. EU countries have collectively provided about €43 billion ($49 billion) in military aid, with roughly 40% of this amount, or approximately €13.5 billion ($15.5 billion), eligible for reimbursement. However, the currently available €6.6 billion is insufficient to fully repay all member states.
EU foreign policy chief Kaja Kallas proposed a solution involving proportional reimbursements of about 10% to each contributing member state, with the remaining funds designated for training Ukrainian troops and joint arms purchases. Poland has rejected this proposal, viewing it as a change in the established rules. The matter is now under technical-level negotiations before being presented to EU member state ambassadors.