The European Commission and the High Representative have introduced the inaugural European Defence Industrial Strategy at the EU level and put forth an extensive set of new initiatives aimed at bolstering the competitiveness and preparedness of the defence industry.
Approximately two years ago, Russia initiated an unjustified and ongoing war of aggression against Ukraine, marking the resurgence of high-intensity conflict in Europe.
The European Defence Industrial Strategy (EDIS) outlines a clear, long-term vision for achieving defense industrial readiness within the European Union.
As an immediate and central measure to enact this Strategy, the European Commission has proposed a legislative framework for a European Defence Industry Programme (EDIP) along with a series of measures to ensure the timely availability and supply of defence products.
The Strategy delineates the current challenges confronting the European Defence Technological and Industrial Base (EDTIB) while also identifying the potential for its full utilisation, providing a trajectory for the next decade.
To enhance European defence industrial readiness, Member States are urged to invest more effectively and collaboratively at the European level. The European Defence Industrial Strategy articulates a range of actions aimed at:
- Supporting a more efficient expression of the Member States’ collective defence demand. This will be based on existing instruments and initiatives, such as the Capability Development Plan (CDP), the Coordinated Annual Review on Defence (CARD) and the Permanent Structured Cooperation (PESCO). It will be supported by incentivising Member States’ cooperation in the procurement phase of defence capabilities;
- Securing the availability of all defence products through a more responsive EDTIB, under any circumstances and time horizon. Investments by Member States and the European defence industry in developing and bringing to market tomorrow’s state of the art defence technologies and capabilities will be supported. 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 that national and EU budgets support with the necessary means the adaptation of the European defence industry to the new security context;
- Mainstreaming a defence readiness culture across policies, notably by calling for a review of the European Investment Bank’s lending policy this year;
- Developing closer ties with Ukraine through its participation in Union initiatives in support of defence industry and stimulating cooperation between the EU and Ukrainian defence industries;
- Teaming up with NATO and our strategic, like-minded and international partners, and cooperating more closely with Ukraine.
Measures are also proposed to ensure the availability of necessary resources during crisis periods, thereby enhancing the EU’s security of supply ensuring that national and EU budgets allocate sufficient resources to adapt the European defence industry to the evolving security landscape.
EDIP encompasses both financial and regulatory aspects.
It mobilises €1.5 billion of the EU budget from 2025 to 2027 to further enhance the competitiveness of the EDTIB.
Additionally, EDIP may establish a Fund to Accelerate Defence Supply Chains Transformation (FAST) to facilitate financing for SMEs and small midcaps involved in defense technologies.
Moreover, EDIP enhances EU defence industrial cooperation with Ukraine and supports the development of its defense industrial and technological base.
EDIP also proposes a governance structure, involving Member States, to ensure the overall consistency of EU action in the defence industry .
On the regulatory aspects, EDIP comes with novel solutions. It will make available a new legal framework, the Structure for European Armament Programme (SEAP), to facilitate and scale up Member States’ cooperation on defence equipment, in full complementarity with the PESCO framework
A stronger and more responsive European defence industry will not only benefit Member States and EU citizens but also key partners such as NATO and Ukraine.
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