The European Commission plans to set aside more than 500 million euros to increase ammunition production to help Ukraine and replenish the stocks of EU member countries.

The EU would offer subsidies to arms producers for investments that increase the production of ammunition and missiles.

The decision should be made on May 3, Reuters reports.

“When it comes to defense, our industry must now switch to war economy mode,” Thierry Breton, the Commissioner for the EU’s internal market, said.

The plan will need approval from EU governments and the European Parliament to become a reality.

This is the third part of the EU’s plan to supply 1 million shells to Ukraine within 12 months.

The first stage assumes allocating EUR 1 billion through the European Peace Facility (EPF) to replenish ammunition stocks in EU countries ready to hand over ammunition to Ukraine.

At the end of April, Josep Borrell announced that there was already a €600 million request for reimbursement from EU member states that supplied ammunition to Ukraine.

The second stage consists of developing a coordinated demand to procure 155-millimeter ammunition once again through the European Defence Agency (EDA), refilling stocks in the EU countries, and ensuring long-term supplies to Ukraine. For this, it is proposed to allocate one more billion euros.

However, as of the end of April, the EU member states have still not reached an agreement on which scheme to implement purchases.

Germany wants to deliver a quarter of the planned million shells for the Armed Forces of Ukraine. However, this is not enough, other manufacturers are needed, and France insists that purchases should be made only from European companies. Instead, Poland opposes such restrictions and insists on the freedom of choice of ammunition suppliers.

The third stage of the plan consists of increasing the European defense industry’s capacity to meet its own ammunition demand.

The planned €500 million should be used to enable munitions companies to increase their capacity.

It is emphasized that it would also allow EU regional development cash, known as cohesion funds, and coronavirus pandemic recovery funds to be used for such projects.