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(Bloomberg) — The European Union plans to spend between €300 million ($327 million) and €500 million to assist ammunition producers by way of the bloc’s finances, in keeping with European Commissioner Thierry Breton.

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The funds would come on prime of the €2 billion agreed by overseas and protection ministers earlier this week because the EU goals to supply Ukraine with 1 million rounds of artillery ammunition over the subsequent 12 months, a aim that leaders are anticipated to log out on at a two-day summit in Brussels beginning Thursday.

The funds outlined by Breton can be a part of the third observe of a broader technique to spice up manufacturing capability within the EU, together with by chopping bottlenecks. This system additionally includes joint purchases of ammunition and reimbursing, by way of the European Peace Facility, what member states ship from their stockpiles of each trendy and Soviet-era ammunition to Ukraine.

Breton, the interior market commissioner, acknowledged a attainable bottleneck in gunpowder manufacturing. “We now have that on our radar, we’ve already began to work on this,” Breton mentioned, including that some international locations are already candidates to construct new capacities.

Member states have been knowledgeable that one key problem to manufacturing ammunition is the availability of gunpowder as it’s at present provided by a handful of nations. The EU is trying to each enhance manufacturing at current areas and new ones.

Breton mentioned he believes the EU can ship the 1 million shells to Ukraine within the subsequent 12 months.

“It’s a problem, however utilizing the present shares that member states have, which may very well be freed instantly, and with a rise in manufacturing capability, sure, I’m assured we should always be capable to obtain this formidable goal for Ukraine,” Breton mentioned.

Extra Money Wanted

EU leaders are additionally set to debate choices to unlock one other €3.5 billion for the EPF, however many international locations have questions on how it might be used. The EPF, which reimburses member states for his or her weapons deliveries to Ukraine and funds different initiatives, at present has a finances of round €7.7 billion, with a lot of it already pledged to assist Kyiv.

However the ammunition pledges will exhaust the fund and additional cash is required to reimburse for different kinds of weapons international locations might ship sooner or later.

Protection corporations in Europe specifically are struggling to broaden manufacturing to the dimensions crucial, with many saying they lack the contracts wanted to make giant investments and open new services or produce to capability.

Whereas European governments have pledged to extend protection spending following Russia’s invasion of Ukraine, it takes time to inject money into the business after 20 years of declining spending following the Chilly Warfare. Solely after 2014, when Russia annexed Crimea, did spending in Europe begin to decide up once more.

–With help from Alberto Nardelli.

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