How do Germany and the EU fund military gear to Ukraine?

After weeks of mounting pressure from many of Berlin's Western allies, the German government has agreed to send 14 Leopard 2 tanks to help Ukraine fend off Russia's invasion. The decision marked a significant shift in policy for Germany, which had thus far been reluctant to send heavier weaponry.

Despite that initial hesitance, Germany has provided significant military support to Ukraine since the start of the war last February. As of November, it had committed €2.3 billion ($2.5 billion) in military aid, according to the Kiel Institute for the World Economy.

But how exactly do Berlin and its European allies finance weapons for Ukraine? There are a range of different sources, both for the equipment and the funding behind it.

Bundeswehr sends existing stock

Some of the military equipment Germany sends to Ukraine comes from stocks the Bundeswehr, or the German armed forces, already has available.

For example, Germany has more than 300 of the Leopard 2 main battle tanks coveted by Ukraine, according to the International Institute for Strategic Studies.

The German government publishes military equipment deliveries it has made to Kyiv. Some examples listed are five MARS II rocket launchers with ammunition, 14 self-propelled howitzers (in a joint project with the Netherlands), 22 million rounds of ammunition for firearms and 14,000 sleeping bags.

Industry orders financed by public funds

The German arms industry is by far the biggest in the European Union. Last year, the German government put €2 billion into its "security capacity building" fund, which is designed to help allies in crisis — at the moment, that primarily means Ukraine.

This money can be used to order military equipment from German companies, which is then sent on to Kyiv.

For this year, the German government has allotted €2.3 billion for this fund, mostly earmarked for Ukraine. Among the military equipment recently paid for by this fund, for example, were 107 border protection vehicles.

EU fund for lethal, non-lethal aid

Soon after Russia began its major offensive on Ukraine last February, the EU made the historic decision to use money from a relatively new fund, known as the European Peace Facility, to back Kyiv. It was the first time it had been used to supply lethal weapons to a third country.

Since then, the EU has committed some €3.6 billion in collective funds to the Ukrainian military, which pays for a combination of lethal and non-lethal aid. Contributions to the European Peace Facility are calculated according to each country's economic output. As a result, Germany, which has the largest GDP in the bloc, contributes the most.

The EPF can also be used to reimburse member states for aid they have individually sent to Ukraine. For example, Poland — one of Ukraine's biggest military backers — has indicated it will seek EU funds to cover the cost of Leopard 2 tanks Warsaw wants to send to Kyiv.

Berlin's workaround: the 'Ringtausch'

While the Leopard 2 announcement signals a change in Germany's willingness to send heavy arms, Berlin's previous workaround was known as the "Ringtausch," or the "ring swap."

The idea behind it was that Germany would supply certain weapons, especially battle tanks and other heavy equipment, not to Ukraine but to NATO partner countries. These countries would then give arms from their own, older stocks to Ukraine.

In this way, Germany could bypass the controversial issue of direct heavy weapons deliveries to Ukraine —which is tied to the foreign policy legacy of World War II— but still show its solidarity. Berlin would also contribute to the military modernization of NATO members.

The complicated model has seen mixed results thus far. Poland, for example, was critical of the idea. The "Ringtausch" did work for deals with other EU countries, however, including the Czech Republic, Slovakia and Slovenia.

Edited by: Emily Schultheis