Modern European defense strategy based on a specific industrial program

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The newly created European defense strategy, EDIS is a reaction of the EU institutions and the member states on the EU-wide security challenges. It is aimed, generally at enabling to “transit” from “crisis response” to more feasible “structural defense readiness”. The European defense spending have become too complicated recently: there are too many different weapon systems and too many different military equipment is bought outside the EU. The strategy is based on a transforming industrial program.   

Strong, resilient and competitive European defense industry, EDIS is a strategic imperative and a vital component in enhancing the EU-wide defense readiness. Hence, the member states have to step up measures to “revitalize” as support military defense on an industrial base. Present strategy marks a paradigm shift towards strong security and defense system in Europe in line with objectives of the Strategic Compass.
The EDIS sets a clear, long-term vision to achieve EU-wide defense industrial readiness; as a first immediate and central means to deliver the strategy, the European Commission has prepared a draft for a European Defense Industry Program, EDIP and a framework of measures to ensure the timely availability and supply of defense products.

The set of actions
The strategy outlines the challenges faced by the newly formulated European Defense Technological and Industrial Base, EDTIB providing opportunities to tap its full potential, and sets out a direction for the next decade. To increase European defense industrial readiness, the member states need to invest more, better and in close cooperation.
To support the states in achieving these goals, the EDIS has formulated a set of actions aimed at:
= Supporting a more efficient “expression of the states” collective defense demand, based on already existing instruments and initiatives, e.g. Capability Development Plan, CDP, the Coordinated Annual Review on Defense, CARD and the Permanent Structured Cooperation, PESCO. It will be supported by incentivising the states’ cooperation in the procurement phase of defense capabilities;
= Securing the availability of all defense products through a more responsive EDTIB; thus will be supported investments by the states and the European defense industry in developing and bringing to market tomorrow’s state of the art defense technologies. Additional measures are also proposed to ensure that the EDTIB has at its disposal what it needs even in crisis periods, thereby increasing the EU’s security of supply;
= Ensuring the national and EU-wide budgets’ support with the necessary means in the adaptation of the European defense industry to the new security context;
= Mainstreaming a defense readiness culture across policies, notably by calling for a review of the European Investment Bank’s lending policy in 2024;
= Developing closer ties with Ukraine through its participation in the EU’s initiatives in support of defense industry and stimulating cooperation between the EU and Ukrainian defense industries;
= Teaming up with NATO and the emerging EU-wide strategic interests and that of the like-minded international partners.

Besides, the strategy sets indicators aimed at measuring the states’ progress towards industrial readiness; the member states are invited to:
= Procure at least 40 percent of defense equipment in a collaborative manner by 2030;
= Ensure that by 2030, the value of intra-EU defense trade represents at least 35 percent of the value of the EU defense market; and
= Make steady progress towards procuring at least half of their defense procurement budget within the EU by 2030 and 60 percent by 2035.

The European Defense Industry Program, EDIP
The EDIP is the new legislative initiative that will bridge short-term emergency measures (adopted in 2023 and ending in 2025) with more structural and longer-term approach to achieve defense industrial readiness. This will ensure continuity in the support to the European defense technological and industrial base and accompany its swift adaptation to the new realities.
EDIP includes both financial and regulatory aspects: thus, it will mobilize €1.5 billion of the EU budget over the period 2025-2027 to continue enhancing the EDTIB’s competitiveness. With the EDIP financial support the program will extend the EDIRPA’s “intervention logic” as financial support from EU budget will offset the complexity of cooperation among the states in the procurement phase). Besides, the financial support to defense industries will increase production capacity and further encourage investments by the EDTIB.
Then EDIP will also support the industrialization of products stemming from cooperative R&D actions supported by the European Defense Fund. The EDIP budget may also be used to set up a fund to accelerate defense supply chains transformation; the new fund will aim at facilitating access to debt and/or equity financing for SMEs and small mid-caps in industrializing defense technologies and/or manufacturing defense products.
EDIP budget will also enhance the EU’s defense industrial cooperation with Ukraine and support the development of its defense industrial and technological base. To do so, EDIP could possibly draw additional funding from the windfall profits derived from immobilized Russian sovereign assets, subject to Council decision on a proposal by the High Representative.
On the regulatory aspects, EDIP is supplemented with novel solutions: e.g. it will make available a new legal framework, the Structure for European Armament Program, SEAP to facilitate and scale up the states cooperation on defense equipment, fully complemented with the PESCO framework. It also entails an EU-wide regime for security of supply of defense equipment, which will ensure constant access to all necessary defense products in Europe and provide a framework to efficiently react to possible future supply crises of defense products.
In addition, EDIP will allow the launch of European Defense Projects of Common Interest, with potential EU financial support. Finally, EDIP proposes to set up a governance structure, where the EU states are fully involved, to ensure overall consistency of EU action in the field of defense industry, e.g. through the Defense Industrial Readiness Board.

More information in the following Commission’s websites: = Questions and answers; = Factsheet on EDIS; = Factsheet on EDIP; = EDIP Proposal for a Regulation; = European Defense Industrial Strategy

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