On Friday 7 July, the Member States’ ambassadors to the EU validated the Interinstitutional Agreement reached between the Spanish Presidency of the EU Council and the European Parliament on the Act in Support of Ammunition Production (ASAP).
At its first reading, the European Parliament did not introduce any changes to the Act (see EUROPE 13178/4); on the other hand, the EU Council decided to scale down the ambition of the provisions aimed at removing regulatory barriers within the single market (see EUROPE 13208/1).
As proposed by the European Commission (see EUROPE 13174/1), the Act will urgently mobilise €500 million from the EU budget (in current prices) to support the ramp-up of ground-to-ground and artillery ammunition and missile production capabilities. The aim is to implement the third part of the plan adopted by the EU Council in March 2023 to guarantee a long-term increase in European munitions production for Ukraine and the EU Member States.
Compared to the Commission’s proposal, the reference to the possibility of using the Cohesion Fund for ASAP has been removed, as has the reference to using the flexibilities of the Working Time Directive.
Financing rates have been revised. At the request of the European Parliament, the co-legislators decided that the rate of EU funding could go up to 35%, instead of 40% in the Commission’s proposal, in order to ensure that a wider range of actions receive funding.
It is possible to have an additional funding rate of 10 percentage points in the case of the creation of a new cross-border cooperation within a consortium of at least three entities from at least three Member States (1), if the objective is the joint acquisition of defence equipment with the aim of transferring the relevant defence equipment to Ukraine (2) and when the beneficiaries are SMEs or mid-cap companies (3).
On the financing of eligible entities, it was stipulated that “in particular, the beneficiary must do everything possible to ensure that there are no obstacles to the delivery to Ukraine of the results of the action financed by the instrument”.
Finally, the agreement removes important parts of the regulatory framework (mapping, priority orders, penalties, intra-EU transfers of defence equipment). In return, a joint declaration was adopted inviting the European Parliament and the EU Council to examine “as a matter of urgency and in a spirit of sincere mutual cooperation” any proposal that the Commission might make, within the framework of the current legislature, concerning regulatory measures aimed at ensuring security of supply and supporting the production and preparation capacity of the European defence technological and industrial base, for example in the context of the forthcoming proposal for a European defence investment programme, including by mobilising the appropriate EU budget.
The European Parliament is due to vote on this Interinstitutional Agreement on Monday 10 July in the Committee on Industry, Research and Energy, and on Thursday 13 July in plenary session. (Original version in French by Camille-Cerise Gessant)