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.
Source: European Parliament
