France seeks to limit Ukraine’s non-European purchases with European Union funds. Paris insists on setting time limits for exceptions that allow Ukraine to purchase defense products outside the EU under the Ukraine Support Loan of 90 billion euros. This step is intended to ensure that the majority of funds provided by the EU support European, and potentially French, manufacturers. Currently, Kyiv benefits from exceptions for components of Chinese and American production.
In April, EU countries approved the Ukraine Support Loan (Ukraine Support Loan) — a financial instrument of 90 billion euros, intended to support Kyiv’s military efforts in 2026 and 2027. It provides for 30 billion euros in economic support and 60 billion euros in military aid. In June, the first 3.9 billion euros were allocated for drones, and earlier this week — another 6.1 billion euros for defense purchases.
Conditions and approved exceptions
According to the loan terms, Ukraine cannot purchase more than 35% of the total value of defense products outside the EU and the European Economic Area. Kyiv can request an exception if the European equivalent does not meet its urgent operational needs or if European manufacturers cannot provide the necessary volume, produce products too slowly, or offer them at too high a price.
Currently, the Ukrainian government has requested two exceptions: one for components of Chinese-made drones and another for American Patriot interceptors, which Kyiv urgently needs to strengthen its air defense. The European Commission approved both requests, recognizing that Europe currently does not have sufficient production capacity and remains dependent on foreign manufacturers in key areas of modern warfare.
However, France insists that these exceptions be temporary, seeking to ensure that the majority of EU funding ultimately supports European, and potentially French, production. France has one of the largest defense industries in Europe, including the production, together with Italy, of the SAMP/T system, which is the closest European alternative to the American Patriot system.
In contrast, in July, the defense ministers of Sweden, the Netherlands, Germany, Denmark, Estonia, Poland, Latvia, Finland, and Lithuania appealed to the High Representative of the EU for Foreign Affairs and Security Policy Kaja Kallas and the European Commissioner for Defense Andrius Kubilius. They called for giving Ukraine maximum flexibility in purchasing the equipment it urgently needs. The letter emphasized: “We continue to emphasize that the rapid approval of product delivery schedules is crucial, including through the pragmatic use of the exception for the purchase of materials produced by third countries.”
Mechanism of exceptions and prospects
Nevertheless, Paris is pressing the European Commission to eventually replace exceptions with European production. The practical implementation of this largely depends on the mechanism of the loan itself. At the initial stage, Kyiv provided Brussels with a general distribution of planned expenses by product categories — drones, air defense systems, artillery, etc. The exact amounts of funding are classified and can be adjusted according to the needs on the battlefield.
For products that fall under the exception, there is a second stage at which the Ukrainian government must provide detailed information on the use of funds, including contracts specifying what equipment is being purchased, from which supplier, and when. The Commission allocates funds only after verifying the contracts. Regarding Chinese suppliers, the Commission must also verify that the companies are not subject to EU sanctions targeting the Russian military-industrial complex, as Chinese drone manufacturers may supply products to both sides. The government of the country where the supplier is based is also asked to take on obligations regarding the fulfillment of the contract, which is intended to help guarantee the delivery of equipment in case of changes in political priorities.
Importantly, exceptions must be renewed each time Ukraine requests a new payment. This means that if, in the meantime, a European supplier emerges that can provide similar volumes, cost, and production terms, the Commission may not renew the exception and require Kyiv to purchase products from the European supplier. Informally, the EU’s executive body may also limit the period during which Ukraine can rely on foreign manufacturers, for example, by setting stricter deadlines for contracts with such suppliers.
In practice, the Commission will have to find a delicate balance: stimulating European defense production and reducing strategic dependence on foreign suppliers in the medium and long term, while ensuring Ukraine has the necessary equipment to defend itself against Russia. How the EU resolves the issue of these exceptions under the Ukraine Support Loan may set an important precedent for other financial instruments, including the Security Action for Europe (SAFE) and the European Defence Industry Programme (EDIP). A representative of the French government did not respond to Euronews’ request for comment.
Source: Euronews
