Ukraine has secured exemptions allowing it to source military equipment from outside Europe under the EU’s €90 billion Ukraine Support Loan.
France is now pushing to limit how long those exemptions can remain in place, in an effort to ensure more of the EU-backed funding supports European — and potentially French — defence production, Euronews has learned.
In April, EU countries approved the Ukraine Support Loan, a €90 billion financial instrument to support Kyiv’s war effort in 2026 and 2027. It is split into €30 billion in economic support and €60 billion for military assistance.
The first disbursement came in June, with €3.9 billion allocated to drones, followed by €6.1 billion for defence procurement earlier this week.
Under the loan’s conditions, Ukraine cannot source more than 35% of the total cost of a defence product from outside the EU and European Economic Area.
Kyiv can request an exemption where no EU-made equivalent meets its immediate operational needs, or where European products cannot meet the required volume, take too long to produce or are too expensive.
The Ukrainian government has so far requested two exemptions: one for Chinese-made drone components and another for US-made Patriot interceptor missiles, which Kyiv urgently needs to strengthen its air defences.
The European Commission has approved both, acknowledging that Europe currently lacks sufficient production capacity and remains dependent on foreign manufacturers in key areas of modern warfare.
France, however, is pushing for these exemptions to be temporary, in an effort to ensure a greater share of the EU-backed funding ultimately supports European — and potentially French — production.
France has one of Europe’s largest defence industries, including the Franco-Italian SAMP/T system, Europe’s closest alternative to the US-made Patriot.
By contrast, in July, the defence ministers of Sweden, the Netherlands, Germany, Denmark, Estonia, Poland, Latvia, Finland and Lithuania wrote to EU foreign policy chief Kaja Kallas and Defence Commissioner Andrius Kubilius, calling for Ukraine to have maximum flexibility to procure the equipment it urgently needs.
“We continue to stress that the swift approval of product schedules is crucial, including through the pragmatic use of the derogation for the purchase of materiel produced by third countries,” the letter said.
Still, Paris is pushing the Commission to ensure that exemptions eventually give way to European production. How this could work in practice depends largely on the mechanics of the loan itself.
At the outset, Kyiv provided Brussels with a broad breakdown of how it intended to spend the money by product category — drones, air defence systems, artillery and so on. The precise allocations are classified and can be adjusted as battlefield needs evolve.
For products covered by an exemption, there is a second stage in which the Ukrainian government must provide details of how the money will be spent, including contracts specifying what equipment is being purchased, from which supplier and when. The Commission releases the funds only after reviewing the contracts.
For Chinese suppliers, the Commission must also check that the companies are not subject to EU sanctions targeting Russia’s military-industrial complex, as China-based drone manufacturers can supply both sides.
The government of the country where the supplier is based is also asked to commit to the fulfilment of the contract, helping to ensure the equipment is delivered if political priorities change.
Crucially, exemptions must be renewed each time Ukraine requests a new payment. This means that if a European supplier emerges in the meantime that can match the foreign manufacturer’s volume, cost and production times, the Commission could refuse to renew the exemption and require Kyiv to source from the European supplier instead.
Informally, the EU executive could also limit how long Ukraine can rely on foreign manufacturers, for example by imposing tighter deadlines for Kyiv’s contracts with those suppliers to be fulfilled.
In practice, the Commission will have to strike a delicate balance: boosting European defence production and reducing strategic dependence on foreign suppliers over the medium to long term, while ensuring Ukraine has the equipment it needs to defend itself against Russia.
How the EU handles these exemptions under the Ukraine Support Loan could set an important precedent for other financial instruments, notably the Security Action for Europe (SAFE) and the European Defence Industry Programme (EDIP).
A French government spokesperson did not respond to Euronews’ request for comment.