European Parliament approves first-ever European defence industry programme
Members of the European Parliament voted on November 25 to approve legislation designed to strengthen the EU defence industry, foster joint European defence procurement, ramp up defence manufacturing and increase support for Ukraine.
The legislation was adopted by 457 votes to 148, with 33 abstentions.
It must now be formally endorsed by the EU member states, before publication in the Official Journal.
The European Commission proposed the European defence industry programme (EDIP) regulation on March 5 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 2000 small and medium-sized enterprises, with an estimated combined annual turnover of 70 billion euro.
The regulation, already informally agreed with the Council of the EU, 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 euro budget, 300 million euro 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 euro 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 EU 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 per cent of the estimated total cost of components.
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.
