Work on a new plan to unlock tens of billions of euros, which will help increase the volume of military aid for Ukraine, will commence in the European Union this week.

"Given the dependence of Ukraine on external support, the choices made by the EU member states and partners in the coming period will either allow Ukraine to progress decisively or will seriously undermine its ability to resist," the proposal says, according to The Wall Street Journal.

If approved, the plan involves reimbursing EU member states with over €20 billion for the substantial military aid, amounting to tens of billions of euros, that they are set to provide to Ukraine over the next four years.

At the outset of Russia’s full-scale invasion of Ukraine, the EU, through the European Peace Facility (EPF), disbursed €5.5 billion to member states that supplied Kyiv with weaponry, ammunition, tanks, and air defence missiles, primarily sourced from their existing stockpiles.

However, since the beginning of last year, Hungary has been obstructing any disbursements from the fund to member states for over six months, demanding actions from Ukraine unrelated to the matter.

In addition, some EU member states have depleted their reserves to the point where they cannot provide significant new aid, and Germany, which has been increasing its aid to Ukraine on a bilateral basis, objects to paying almost a quarter of the EPF bill.

Due to these challenges, the European External Action Service proposes the creation of a special military fund for Ukraine, absorbing part of the remaining assets of the EPF and replenishing it with €5 billion annually from 2024 to 2027. 

The idea is to use these funds to compensate member states for joint procurement of military assistance, such as ammunition, drones, and air defence missiles, for Ukraine.

The rest of the funds will cover expenses for the EU's military training programme for Ukraine. Before the new plan takes effect, there will be a transitional period. The EU document provides approximate estimates suggesting the European Union could offer member states compensation for military aid amounting to €7.5 billion this year.

The new plan will enable smaller member states with limited ammunition reserves to pool their resources for joint purchases, making a more substantial contribution to aid Ukraine. This proposal will also facilitate the coordination of European governments with Ukraine in identifying its most pressing material needs.

The fund's structure will avoid regular payments that Hungary has often blocked or used as leverage to demand unrelated actions. Additionally, it will ensure a steady demand for military equipment over the next few years, supplementing national bilateral aid to Ukraine and potentially motivating European defence companies to increase the production of critical weaponry.

Earlier, German Chancellor Olaf Scholz wanted to use the EU summit on 1 February, dedicated to the mid-term review of the EU budget, to urge partners to send more weapons to Ukraine.

German Chancellor Olaf Scholz also called on other European Union countries to provide more military support to Ukraine this year as it fights full-scale Russian aggression.

Additionally, Hungary claimed that it might lift its veto from the €50 billion EU aid package for Ukraine on condition that the financing will be reviewed annually.