A provisional deal announced by the EU’s 27 member states and the European Parliament early on Friday will pour money into the production of missiles and ammunition.
Weapons manufacturers will be eligible for a “ramp-up fund” to increase their production capacity as Europe aims to provide a million artillery rounds to Ukraine in a 12-month period to March 2024.
Grants will be available to train workers and upgrade factories under what is known as the Act in Support of Ammunition Production, or ASAP.
The direct funding for rearmament from the EU budget is a first for the European peace project.
“Thanks to today’s record time agreement on ASAP, the EU will bolster and speed up Europe´s own production of ammunition and missiles,” said Margarita Robles, Defence Minister of Spain, which holds the bloc’s rotating presidency.
“This is yet another proof of the EU’s unwavering commitment to supporting Ukraine, strengthening the EU’s defence technological and industrial base, and ultimately ensuring the long-term security and defence of EU citizens.”
The EU’s internal market commissioner Thierry Breton has spoken of moving to a “war economy” as Europe reverses a long period of lower defence spending after the end of the Cold War.
The ASAP plan still needs final approval from the parliament and member states.
The EU has a separate €3.5 billion ($3.81 billion) pot outside its regular budget that it uses to reimburse countries that send weapons to Ukraine.
“It is important for Ukraine to receive the necessary weapons and ammunition in time for a successful counteroffensive and further de-occupation of its territories,” Mr Zelenskyy said in Bulgaria while on a tour of Nato countries.
At the same time, European countries are looking to plug gaps in their own defences after years of reduced funding.
The Nato summit in Vilnius is expected to issue a rallying cry to raise military spending.