Overview
- EU ambassadors in Coreper backed the implementing texts and sent the regulation, Ukraine Facility changes and MFF amendments to the European Parliament, aiming to head off a funding shortfall in April.
- Procurement will prioritize EU, Ukraine and EEA/EFTA suppliers, with narrow derogations allowing purchases from third countries when urgently needed or unavailable in Europe; eligible items include air and missile defense, fighter aircraft ammunition and deep‑strike capabilities.
- Kyiv must justify any non‑EU purchases, which the European Commission will review after consulting a new Ukraine Defence Industrial Capacities Expert Group comprising member state representatives.
- Non‑EU partners seeking broader participation will be required to contribute toward borrowing costs in proportion to expected gains for their defense industries; the U.K. would need to agree terms, while Canada can participate under its existing SAFE arrangement.
- The Commission will raise the €90 billion on capital markets, with roughly one‑third for Ukraine’s budget and the remainder for defense; interest costs are to be covered first from unused EU budget balances and then by member states, and repayment is conditioned on Russian reparations with frozen Russian assets under consideration as a backstop.