The European Commission revealed a fresh 1.5 billion euro ($1.63 billion) defence industry initiative on Tuesday, slated to draw funding from the European Union budget spanning from 2025 to 2027.

According to the proposal, the program urges the 27 EU member states to collectively procure a minimum of 40% of their defense equipment by 2030.

Additionally, it aims to elevate the value of intra-EU defense trade to encompass at least 35% of the EU defense market.

“To increase European defence industrial readiness, member states need to invest more, better, together, and European,” the EU Commission said in a statement.

The conflict between Russia and Ukraine has spurred several European nations to boost their defense expenditures. However, EU officials contend that purely national endeavors are less effective and advocate for greater involvement of EU entities in defense industrial policy.

Furthermore, the EU Commission aims to assist the European defense sector in better preparing for current and potential significant challenges, such as a sudden increase in demand for substantial quantities of artillery ammunition.

The Commission additionally suggested utilizing a portion of the profits derived from frozen Russian assets to finance arms acquisitions for Ukraine.