Kaja Kallas' €40-billion plan for Ukraine flounders at EU summit

After a summit in Brussels, EU leaders did not endorse the target to mobilise €5 billion to procure 2 million ammunition rounds for Ukraine.

The plan devised by High Representative Kaja Kallas to raise up to €40 billion in fresh military support for Ukraine failed to gain the necessary political traction during a summit of European Union leaders on Thursday, throwing its viability into serious doubt.

The reaction was so lukewarm that some diplomats declared the project “dead”.

The summit’s conclusions dedicated to Ukraine, endorsed as an “extract” by just 26 countries over Hungary’s veto, only made a passing reference to the Kallas plan, without mentioning any objective of financial figures.

“The European Council recalls the initiatives to enhance EU military support to Ukraine, notably that of the High Representative to coordinate increased support by member states and other participating states, a voluntary basis,” the text reads.

The conclusions do not even include what Kallas described as the most “realistic” element of her project: €5 billion to procure 2 million ammunition rounds for Kyiv in the short term. Artillery shells are cheaper and easier to acquire than advanced weapons.

“I think it is important to have a tangible result,” Kallas said on Thursday morning as she made her way into the summit and faced questions about her blueprint.

“If we are not able to decide right now for the whole year that is coming, let us decide on the short term which are the imminent needs that Ukraine has regarding the ammunition right now.”

President Volodymyr Zelenskyy made the same request in a virtual speech to leaders in the room. “We need funds for artillery shells and would really appreciate Europe’s support with at least five billion euros as soon as possible,” he said.

But neither Kallas nor Zelenskyy managed to sway leaders: the target of 2 million ammunition rounds, or, alternatively, €5 billion, is nowhere to be seen. Only a general reference to “large-calibre artillery ammunition and missiles” can be found.

Asked about this absence, António Costa, the president of the European Council, tried to evade the question by pointing out that member states had already pledged €15 billion in additional support for Ukraine and new commitments were expected in the coming weeks as a result of the European Commission’s rearmament package.

“We continue to study other ways to increase our support for Ukraine,” Costa said.

“We will continue in an unwavering way until the end of this war. And after the war, we will continue to support Ukraine with peace guarantees. And the most important, in the integration of Ukraine into the European Union.”

The debacle around the Kallas plan is not entirely surprising.

In the days leading up to Thursday’s summit, diplomats had voiced a string of concerns and unresolved questions around her pitch, which some described as well-intended but hastily put together.

Notably, Kallas has proposed that a “portion” of the military contributions be done “in line” with each country’s “economic weight,” using gross national income (GNI) as the chief indicator to ensure a fair distribution of donations. This model has been met with great resistance from big countries, like France and Italy, who would be expected to put forward sizable contributions under the GNI key.

Meanwhile, other countries have raised questions about how national pledges, such as the €15 billion mentioned by Costa, would be taken into account and how many non-EU countries, like the UK and Norway, would be added to the common undertaking.

Capitals have also been pushing for answers on how the plan integrates the €18 billion that the EU will supply Kyiv as part of an extraordinary loan backed by the windfall profits of Russia’s frozen assets. (The loan is mentioned in the conclusions.)

There is an additional question on how effective the initiative might be in practice if, from the beginning, it is built as a voluntary scheme to bypass Hungary’s veto.

Despite the diminishing hopes, some diplomats say the Kallas plan may still be salvaged by making strategic tweaks – most notably by removing the GNI indicator.