Ammunition for Ukraine and the perils of industrial policy

EU's pledge to deliver 1M artillery shells to Ukraine by March 2024 faces obstacles due to insisting on producing them within the EU. Some member states allegedly block sourcing from outside the EU. Industrial policy clashes with timely supply.

The recent news that the EU will not be able to provide Ukraine with 1 million artillery shells by March 2024 should not come as a surprise. Only half of that number will be provided by the deadline. While true that every shell helps Ukraine and 500k is better than none, the truth is the EU has not even come close to fulfilling its commitment. Why?

It would appear that the explanation relies on the insistence of some to produce those shells in the EU. In short, good old industrial policy showing once more the pitfalls it creates. France, Greece and Cyprus have allegedly blocked the move pushed by other EU Member States to source those shells from outside the Union. The logic being that EU industry needs those orders to scale up.

Herein lies the internal contradiction of industrial policy in public procurement (as with all other ‘strategic objectives’). A dog cannot serve two masters and the example of Ukraine is evident: either supplying those shells by the deadline is important or where they are source from is. Pursuing one implies setting the other aside despite all protestations about having your cake and eating it.

I’m sure the Ukrainian soldiers fighting would not care about not having a Made in the EU sticker in the shells they’re firing.