EU Weighs Exemption to Let Kyiv Buy Patriot Interceptors with €90 Billion Loan

Ukraine has formally asked the European Union to approve spending from a €90 billion support loan on PAC-3 interceptor missiles for its Patriot air defence batteries, a request that would mark the first draw on the fund for U.S.-made equipment, according to European officials.

The request comes as Kyiv faces what its defence ministry describes as a $27 billion shortfall in defence funding, alongside a sustained campaign of aerial strikes on Kyiv, Odesa and other cities. Defence Minister Yevhenii Khmara said last week that Ukraine is also urging partners to fund domestic drone production, accelerate disbursement of the EU loan, and revisit talks on the use of frozen Russian assets.

“We will keep supporting Ukraine, including with European air defence and PAC-3 Patriot systems,” European Commission President Ursula von der Leyen said in a statement, adding that the exemption review “is moving in the right direction.” She confirmed the request alongside NATO Secretary General Mark Rutte.

The 35% Content Cap

The €90 billion facility, finalised by the Council of the EU in April after months of negotiation, allocates roughly €60 billion for defence procurement and €30 billion for budget support. However, its rules were designed to favour European and Ukrainian-made equipment, capping non-EU or non-Ukrainian content at 35% of any purchase’s value.

Because PAC-3 missiles are manufactured in the United States, a formal exemption is required before funds can be applied to the purchase. EU representatives were scheduled to decide on the waiver on Monday, according to von der Leyen. Kyiv secured a comparable carve-out in April for Chinese-made drone components, a precedent officials are citing as member states weigh the current request.

Khmarya framed the ask in broader terms, saying that “every euro invested in Ukraine’s defence is an investment in European security.”

The outcome carries implications for transatlantic defence suppliers and for European industrials positioning around the EU’s procurement priorities. Companies in the aerospace and defence sector, including National Presto Industries (NPK) — which trades at $149.16, up 0.97% from a previous close of $147.72, with a market capitalisation of roughly $1.06 billion — operate in a market where government funding decisions continue to shape demand. The company’s defence segment supplies ammunition and related safety products in North America.

For now, the Patriot missile request remains subject to the EU’s internal approval process, with no final decision yet announced.

What to watch

• The EU representatives’ decision on the exemption, which was due Monday following von der Leyen’s statement.
• Any formal announcement on the timing and size of the first disbursement from the €90 billion loan.
• Further statements from Ukraine’s defence ministry on its $27 billion budget shortfall and funding requests.
• Upcoming earnings reports from defence manufacturers for commentary on European procurement demand.

Source: original release