Estonia hopes to recoup from EU full €400 million military aid to Ukraine

The Estonian state hopes to recoup as much as €400 million from a European Union fund, for arms aid Estonia has provided to Ukraine, in its defensive war against the Russian Federation.

The fund, called the European Peace Facility (EPF), was set up for the period 2021-2027 before Russia's full-scale invasion of Ukraine starting nearly a year ago, meaning the nearly €6 billion allocated is not sufficient to cover all EU member states expenditure on military aid to Ukraine (which is nearly double that sum for 2022 alone), while only a little more than a quarter of the total sum Estonia has requested is confirmed.

The fund is set to be increased in size, however.

To date, the decision has been that Estonia will retrieve €156 million from the EPF, in return for military aid such as 105mm howitzers, given to Ukraine.

Katri Raudsepp, head of the Center for Defense Investment's (RKIK) general department, said: "The decision has been made to allocate this to Estonia, but this money will be physically recouped over a period of several years.

"There are schedules on how this will be reimbursed to the member states," Raudsepp went on.

While these have not been made public, the full amount will have been paid back to Estonia at least, by 2027 at the latest, ERR reports.

At the same time, the state has submitted other requests for reimbursement, for the same purpose, but which have not been decided upon yet.

Reimbursement for the most recent aid package to Ukraine, costing €113 million, is to be submitted soon, Raudsepp said.

An application for the most recent aid package of 113 million euros will also be submitted soon, Raudsepp said.

This application: "States exactly what equipment we have provided, both its balance sheet value and its reimbursement value. Decisions will be made based on this," Raudsepp went on.

"The most important key needs defined by Ukraine itself are what can be applied for reimbursement, primarily: Combat equipment, weaponry, communications equipment, ammunition. Among the more common items are winter personal equipment and other related things," she went on.

Estonia hopes to get €400 million back in total, though this partly depends on how much remains in the kitty.

The RKIK allocated €5.7 billion for the years 2021-2027, but in 2022, EU member states as a while provided €11 billion in military aid to Ukraine, €3.1 billion was reimbursed via the EPF.

However, the fund has since been increased in size, Vivian Loonela, head of Estonia's representation at the European Commission, says.

"In December, the agreement was made to add €2.3 billion for this period until 2027, while it was also announced that the commission's Foreign Affairs Council (FAC) will receive mandates to start negotiations on where to find an additional €3.5 billion," Loonela went on.

Estonia plans to use the full amount requested, should it be granted, to make defensive replacements on a like-for-like basis, or in actual fact, in effect an upgrade – so for instance refunds for older (towed) howitzers sent to Ukraine will be used to purchase self-propelled guns.

The EPF is an off-budget instrument aimed at enhancing the EU's ability to prevent conflicts, build peace and strengthen international security, by enabling the financing of any operational actions under the Common Foreign and Security Policy (CFSP) with a military or defense implication, the commission says.

Estonia's aid to Ukraine makes up around 1 percent of the country's annual GDP at present.


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Editor: Andrew Whyte, Mirjam Mäekivi

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