Parliament greenlights first-ever European defence industry programme

Boost to European defence capabilities

“Buy European” approach

Greater support for Ukraine

The law adopted on Tuesday is designed to strengthen the EU defence industry, foster joint European defence procurement, ramp up defence manufacturing and increase support for Ukraine.

The regulation, already informally agreed with the Council, will establish the first-ever European defence industry programme (EDIP). The scheme seeks to strengthen the European defence technological and industrial base, and boost European defence capabilities.

Of EDIP’s €1.5 billion budget, €300 million would go to the Ukraine Support Instrument. Co-legislators also agreed to create a Fund to Accelerate Defence Supply Chain Transformation (the FAST instrument) to total an indicative amount of at least €150 million through additional financial contributions.

During negotiations with Council, MEPs successfully pushed for an increase in the programme’s budget, by means of additional contributions from the Security Action for Europe instrument (SAFE). In addition, the programme allows member states to use the Recovery and Resilience Facility (RRF) to its full potential, by diverting and reallocating unspent RRF-backed funds to support EDIP projects.

MEPs also championed the “buy European” principle: for defence products to secure funding, the cost of their components originating from non-associated third countries cannot exceed 35% of the estimated total cost of components.

Support for Ukraine

The programme will set up a legal framework for European defence projects of common interest. To be eligible for funding, these will need to involve at least four member states; Ukraine will be able to participate. The legislation will also set up a Ukraine Support Instrument (USI) to help modernise the Ukrainian defence industry and ease its integration with the European defence industry.

Quotes

“The European Defence Industry Programme (EDIP) marks an important step towards a more efficient, faster and genuinely European approach to defence procurement and strengthening European defence capabilities. It is designed to have a lasting impact, serving as a reference point for future initiatives and shaping the way European cooperation in defence production is organised beyond 2027,”Marie-Agnes Strack-Zimmermann (Renew Europe, Germany), the Security and Defence committee Chair, said.

“EDIP is the first EU defence instrument that is truly European. In the face of Russia's full-scale war against our neighbour and repeated attacks against our own countries, we need to reinforce our common defence systems and ramp up our defence capabilities collectively. EDIP will enable us to build a more resilient and sovereign Europe, through joint investment, common procurement from the European defence technological and industrial base, and further integration of the Ukrainian and European defence industries. This is key to making sure we can protect our democracies effectively and autonomously”, said Raphaël Glucksmann (S&D, France), co-rapporteur from the Committee on Security and Defence.

"This programme represents a major step forward for the security of the European continent and the development of our defence industry. After decades of dangerous dependencies that threatened the sovereignty of our democracies and the protection of our countries, the EDIP programme will reverse the reliance on imports that prevailed in Europe. It will serve to strengthen our industrial base in a real way, enabling us to ensure autonomously that our armed forces have the means to fulfil their mission”, said François-Xavier Bellamy (EPP, France), co-rapporteur from the Committee on Industry, Research and Energy.

Next steps

The legislation was adopted by 457 votes to 148, with 33 abstentions. It must now be formally endorsed by the member states, before publication in the Official Journal.

Background

The Commission proposed the European defence industry programme (EDIP) regulation on 5 March 2024. EDIP seeks to achieve defence industrial readiness by bridging the gap between short-term emergency measures, such as the Act in Support of Ammunition Production (ASAP) and the European Defence Industry Reinforcement through Common Procurement Act (EDIRPA), with a more structural, long-term approach.

The European defence industrial base consists of a number of large multinational companies, mid-caps and over 2,000 small and medium-sized enterprises, with an estimated combined annual turnover of €70 billion.