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European defense integration is gaining speed as modern military conflicts require the EU-wide response. Commission is coordinating the member states’ efforts through new “instruments” to support such actions as e.g. joint acquisition of weapons, transferring urgently needed defense equipment and establishing the EU Defense Union. Besides, present vulnerable global geopolitical and security situation shows that the EU requires a modern defense technological and industrial base.
The “instruments” suggested by the EU, in particular, will include:
= fostering the states cooperation in defence procurement, which will contributes to interoperability and efficiency of public spending, prevents occasions when it would be impossible for the states to satisfy their demand of defense products because of a demand peak while avoiding fragmentation.
= boosting the competitiveness and efficiency of the European Defence Technological and Industrial Base, EDTIB, in particular by speeding up the adjustment of industry to structural changes, including ramp-up of its manufacturing capacities, resulting from the new security environment following the war in Ukraine.
More in: https://ec.europa.eu/commission/presscorner/detail/en/ip_22_4491
The Commission’s actions to support the competitiveness of the EDTIB have gradually taken shape over the past few years. With a budget of €7,2 billion for the period 2021-27, the European Defense Fund is the EU’s key instrument to support defense R&D cooperation in Europe and will help reduce the fragmentation of investments in European defense capability development. It will also enhance industrial competitiveness and promote interoperability throughout Europe. The Commission has proposed to enhance its funding by €1,5 billion as part of the mid-term review of the Multiannual Financial Framework.
The defense sector is characterized by increasing costs of defense equipment and by high research and development (R & D) costs that limit the launch of new defense programs and have a direct impact on the competitiveness and innovation capacity of the European defense technological and industrial base (EDTIB). In view of that cost escalation, the development of a new generation of major defense systems and of new defense technologies should be supported at Union level in order to increase cooperation between Member States with regard to defense equipment investments.
Adopted at the end of October 2023, the European Defense Industry Reinforcement through common Procurement Regulation (EDIRPA) has a budget of €300 million “industrial policy instrument” aiming at reinforcing defense industrial capabilities by supporting EU states’ cooperation on common procurement of the most urgent and critical defense products.
Short history
Faced with new security challenges, the EU states have announced their intention to spend more on defense. However, without more coordination and cooperation, these increased investments entail significant risks such as: deepening the fragmentation of the European defense sector along national borders, limiting the potential for cooperation throughout the life cycle of the equipment, intensifying external dependencies and hampering the EU-wide interoperability and the states’ armed forces ability to act.
Starting in 2017, a new framework for EU-wide and cross-border defense R&D cooperation has been created including the mentioned EDIRPA and the European Defense Fund.
In particular, the new instruments will act in coherence with the €8bn European Defense Fund in the development and acquisition cycle of defense equipment.
The EDIRPA will also complement the European Peace Facility (EPF), which has allowed bold steps in financing the states’ efforts to supply defence equipment to Ukraine, with a level of support reaching €2 billion with further allocations. While EPF reimburses those transfers, there is now the need to support the states in replenishing depleted stocks of material with a due cooperation.
The Strategic Compass for security and defense, approved by the Council on 21 March 2022, covers all aspects of the security and defense policy and enhances the EU’s level of ambition in this field. With the defense package adopted in February 2022, the Commission made concrete proposals to support the Strategic Compass implementation.
On strategic compass in: https://www.eeas.europa.eu/eeas/strategic-compass-security-and-defence-1_en
Building on all of these initiatives and in order to strengthen the EU’s response to external military aggression, the Joint Communication on the Defense Investment Gaps Analysis in May 2022 formulated a number of concrete and staged measures, which include the establishment of a Defense Joint Procurement Task Force and the creation of the short term “instruments”.
A specific regulation will avoid competition among the EU states for the same products and facilitate cost savings. It will strengthen interoperability and allow the mentioned EDTIB to better adjust and ramp-up its manufacturing capacities to deliver the needed products. The regulation will support actions from consortia composed of at least three EU states and eligible actions can involve new defense procurement projects.
More in the Regulation draft from June 2022 in: https://ec.europa.eu/commission/presscorner/detail/en/ip_22_4491
European Defense Fund
In order to contribute to the enhancement of the competitiveness and innovation capacity of the Union’s defense industry, a European Defense Fund is established for a period of seven years to align its duration with that of the multi-annual financial framework 2021-2027 (MFF 2021-2027) laid down in Council Regulation 2020/2093.
See: Council Regulation 2020/2093 (December 2020) laying down the multi-annual financial framework for 2021-27; in OJ L 433I, 22.12.2020, p. 11.
The aim of the Fund is to enhance the competitiveness, innovation, efficiency and technological autonomy of the Union’s defense industry, thereby contributing to the Union’s strategic autonomy by supporting the cross-border cooperation among the EU states as well as cooperation between enterprises, research centers, national administrations, international organisations and universities, both in the research and in the development phases of defense products and technologies. To achieve more innovative solutions and to foster an open internal market, the Fund would support and facilitate the widening of cross-border cooperation of SMEs and mid-cap companies in the defense sector. Common defense’s capabilities are identified within the framework of the EU-wide Common Security and Defense Policy, in particular through the Capability Development Plan (CDP) and the Overarching Strategic Research Agenda, OSRA.
On the Regulation concerning the Fund in: https://eur-lex.europa.eu/eli/reg/2021/697/oj
The objective of the Fund is to support the competitiveness, efficiency and innovation of the Union’s defense industry by leveraging and complementing collaborative defense research and technology activities and de-risking the development phase of cooperative projects. Actions related to the research and the development phases of a defense product or technology should be eligible for support from the Fund.
An integrated approach should be ensured by bringing together activities covered by the Preparatory Action on Defense Research (PADR), launched by the Commission in accordance with the European Defense Industrial Development Program, EDIDP established by Regulation 2018/1092. Such an integrated approach should create a more coherent set of instruments and increase the innovative, collaborative and economic impact of the Fund, while avoiding unnecessary duplication and fragmentation. It would also ensure that the Fund contributes to the better exploitation of the results of defense research, covering the gap between the research and the development phases taking into account the specifics of the defense sector, and promoting all forms of innovation, including disruptive technologies for defense.
More in: EU Regulation 2018/1092 of the European Parliament and of the Council of 18 July 2018 establishing the European Defense Industrial Development Program aiming at supporting the competitiveness and innovation capacity of the Union’s defense industry; source: OJ L 200, 7.8.2018, p. 30.
Commission’s opinion
= More than ever, the EU needs a strong and resilient European defense industry; hence, it is crucial to equip the member states’ armed forces with the full range of capabilities they require, e.g. to continue delivering military support to Ukraine and to make the EU a more credible and reliable security provider in the world. This is also crucial to deliver on the ambitions of the European Strategic Compass.
Commission Vice-President, Josep Borrell.
= Present vulnerable global geo-political and security situation shows that the EU requires a modern defense technological and industrial base. It necessitates boosting the EU’s capability to defend its values and move from emergency response to long-term abilities. Hence, there is a need for closer cooperation to strengthen supply chains and innovation to provide for a permanent readiness. That is why it is so important to prepare the EU-wide strategy in close consultation with the states, the European Parliament and all stakeholders concerned.
Věra Jourová, Commission Vice-President in charge of values and transparency.
= Increasing Europe’s defense readiness and the availability of military equipment has become vital to guarantee the region’s collective security. The EU needs to continue supporting the European defense industry to adapt to the new security realities and produce more and faster. The formal consultation with the member states, the European Parliament and industrial sectors on a European Defense Industry Strategy is aimed at achieving this objective.
Thierry Breton, Commissioner for Internal Market.
Citations from: https://ec.europa.eu/commission/presscorner/detail/en/IP_23_5364