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Senators Race to Save Faltering Border-Ukraine Negotiations - POLITICO

One year into efforts to boost production of artillery rounds for Ukraine, the United States and Europe are seeing radically different results.

The U.S. has increased its output of 155mm shells far faster than it originally forecasted, and plans to increase it further—if Congress can pass a budget for the nearly two-month-old fiscal year. Europe has moved more slowly than it intended to, hampered by the consensus-focused nature of NATO and the EU.

And in a twist that belies Europe's reputation for state-owned businesses, its dilemma is set by market conditions, while U.S. progress is made possible by state-control of ammo manufacturing.

It's a "a bit of a chicken-and-egg question," said Estonian Defense Minister Hanno Pevkur during a recent visit to Washington, D.C. Industry officials, Pevkur said, say, "'Please give us contracts and then we can produce' and then we say that, you know, 'There is a clear demand. Just start to increase your production'."

On the U.S. side, production doubled within a year of launching a crash production program, largely because the Army owns the facilities that make the shells.

In Europe

The countries of the European Union began with a head start, producing about 230,000 155mm shells a year—about one-third more than the U.S. The EU also has a better recent record for approving annual spending plans.

By February 2023, European production was at 300,000 rounds annually, according to Estonian defense officials. By November, capacity had risen again, though assessments differ. European Commissioner for the Internal Market Thierry Breton suggested that Europe could now make some 400,000 rounds annually. Estonia's Pevkur, speaking at a November media roundtable, put the figure between 600,000 and 700,000—and said it would reach one million rounds in 2024.

In March, the EU announced it would spend 2 billion euros ($2.2 billion) to send one million 155mm shells to Ukraine within a year. The money is split between paying countries to send stockpiled shells to Ukraine and acquiring new shells from EU members and Norway under a joint procurement scheme.

But the EU will not meet its goal this year, German Defence Minister Boris Pistorius confirmed recently. In September, Estonian defense official Kusti Salm said the plan would likely be fulfilled by mid-2024.

And in the long term, Pevkur said, even more shells will be required—to backfill stocks, support NATO regional plans, and keep Ukraine in the fight.

"My estimation is that we have to produce in the next ten years around 3 million rounds in a year," the Estonian minister said.

NATO

NATO, whose own procurement agency is also pursuing the acquisition of more 155mm rounds, is finding that prices have quadrupled.

In October, NATO's senior military officer, Adm. Rob Bauer, said that the price for one 155mm shell had risen from 2,000 euros ($2,171) at the start of Russia's full-scale invasion to 8,000 euros ($8,489.60).

For comparison, the U.S. currently pays $3,000 for its most modern shells, according to an Army spokesperson. That price includes the charge, fuze, and shell body.

Unlike the U.S., European 155mm production is primarily in the hands of the commercial market. That means that European countries can incentivize production increases through purchases, but cannot order factories to invest in automation, double shifts, or build new plants, as the U.S. has.

In Race To Make Artillery Shells, US, EU See Different Results - Defense One