EU ambassadors meeting in Brussels Thursday (22 June) approved a €3.5 billion second top-up of the European Peace Facility (EPF) after months of negotiations, with it set to be endorsed by foreign ministers on Monday (26 June).

The EPF is used to reimburse member states for their lethal and non-lethal deliveries to Ukraine, as well as send aid to other partners in the bloc’s neighbourhood and fund missions and operations.

Additionally, ministers are expected to give their political green light to allocate an 8th tranche of €500 million to Ukraine to keep reimbursing the member states’ deliveries of military equipment, EURACTIV understands.

This budget increase comes as the €6 billion fund set up in 2021 has been nearly exhausted in supporting Ukraine.

The first top-up in January with an additional €2 billion was almost immediately allocated to finance the delivery of ammunition to Ukraine and jointly procure more, EU diplomats said.

Last December, EU leaders also committed another €3.5 billion until 2027, but the immediate needs fast-tracked the negotiations to top-up the fund this year.

Interpretations over money’s allocation

The agreement is expected at the end of the written procedure today, three EU diplomats told EURACTIV, as Hungary ultimately lifted its veto.

Officially, Budapest argued the fund had to help not only Ukraine but also other countries worldwide- an argument supported by all member states, although the strict geographical repartition of the money has yet to be agreed on.

The understanding among EU diplomats was that Hungary linked the adoption of the top-up and the allocation of an extra €500 million to Ukraine to the adoption of the 11th sanctions package against Russia and the delisting of their OTP bank from the Ukrainian blacklist.

“The top-up is not only for Ukraine, as the EPF is a global instrument,” one EU diplomat said.

“African countries are very interested in the European Peace Facility,” the same EU diplomat said. The EU is also looking in its neighbourhood, for instance, in the Western Balkans and Moldova, “where we can do a lot with little amounts of money”, they said.

While Budapest understands that only €1 billion would go to support Ukraine, two diplomats said the member states have not yet formalised an agreement on a specific figure.

Some member states have asked over the last year to set up a separate ‘special’ fund for Ukraine, potentially based on voluntary contributions by member states, to avoid the regular top-up of the EPF and the issue of geographical attribution of the money.

Although it is still supported, the plan is not yet on the tracks, a second EU diplomat said.

[Edited by Alice Taylor]

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