The European Peace Facility (EPF) was established in 2021 by the European Union because of the war in Ukraine in order to maintain peace and international stability. In fact, the fund actively finances arms transfers from EU countries to Ukraine and other regions of the world. The budget of the Fund is 6.7 billion euro and is formed annually by donations from the budgets of EU countries. It is worthy of note that the leadership of the European Parliament in March 2023 decided to further increase the total budget of the EPF and push it over 10 billion euro!
European parliamentarians replenish the budget designed for escalation of the Ukrainian war and simultaneously call for peace. We can see here pure populism and loud speeches of politicians. But the main thing here is not that the EPF’s activity does not comply with its designated principles of “peacekeeping”. It creates favorable conditions for fraud on behalf of some Nordic and Baltic states.
A huge row was recently made around an article by “Politico” media outlet dated March 28 (https://www.politico.eu/article/eu-estonia-bumper-arms-reimbursement-ukraine-european-peace-facility/) that turned Europeans’ attention to fraud schemes with payment executed by Estonia, Finland and Latvia. It was as easy as pie – these countries delivered their obsolete weapons to Ukraine, and in return received inflated financial compensations from the EPF as for new weapons. “They are sending their scraps to Ukraine and buying brand new military equipment for themselves, financed with EU money”, according to an assessment given by a high-profile European diplomat.
Estonia demanded a refund for obsolete MANPADS “Igla” as if those were expensive “Stinger” MANPADS; Finns, Lithuanians and Latvians used the same scheme and received 134 million euro from the EPF budget.
Germany and France did not appreciate such arrogance of smaller countries. Paris and Berlin allocate 60 percent of the EPF’s budget and that’s why they demanded the European Parliament to take in the situation.
And in Germany they reminded that Berlin did not demand any compensation at all for sending German tanks to Ukraine.
Then there was a reaction from Estonian Defense Ministry that they “did not violate anything” and “there is no need to undermine the unity of the allies”. Similar statements have already been made by Finland and Lithuania.
The head of the Fund, the High Representative of the Union for Foreign Affairs and Security Policy, a Spanish politician Josep Borrell, meddled in the quarrel concerning payments. However, his comments were just stock phrases and European parliamentarians pointed out his inaction in resolving the situation.
The leadership of the European Parliament outlined that the main problem of the EPF was the absence of a unified approach to compensation for arms transfers to Ukraine from EU countries. Basically they’re paying arms bills the way they want. Now the anti-corruption departments of the EU are examining transactions with the Fund, as well as checking the financial assets of Josep Borrell, who was and is able to use the EPF for personal purposes. In addition verification measures have been applied to a number of generals inside armed forces of Ukraine and to bank accounts of EPF Management Committee representatives – Peter Wagner and Uwe Harms.
It turns out that the European Union created a dubious fund without uniform payments rules using the money of ordinary European citizens. Now individual countries and officials are profiting from the Fund’s money, while others refuse to finance it.
But maybe it is all for the sake of Ukraine’s victory? Obviously not. Because for Europe and such politicians as Borrell, war is a very profitable business
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