On Tuesday 5 March, the European Commission presented its European Defence Industrial Strategy and proposed the European Defence Industry Programme.
EDIS sets a vision for the EU defence industry for the next decade, focusing on more collaboration among Member States to improve EDTIB readiness under « any circumstance and time horizon ».
EDIS sets specific targets :
- By 2030, Member states should procure at least 40% of defence equipment in a collaborative manner, and intra-EU defence trade should account for at least 35% of the EU defence market’s total value.
- They must also procure at least 50% of their defence procurement budget within the EU by 2030 and 60% by 2035.
EDIP is setting several novel solutions that, in addition to the European Defence Fund will allow the EU to support the European defence industry and collaborative armament programmes at every stage, from programming to R&D, production, joint procurement and access to finance.
EDIP proposes several actions to facilitate joint procurements. Those initiatives include :
- The establishment of a Structure for European Armament Programme (SEAP);
- Financial incentives for joint procurement (an expansion of the logic of EDIRPA);
- The creation of a European Military Sales Mechanism;
- The launch of European Defence Projects of Common Interest, with potential EU financial support.
As a successor of ASAP, EDIP will also support the ramp-up of production capacity, beyond ammunition and missiles:
- De-risking and even subsidizing companies’ investments in increasing production capacity;
- Supporting the development of ‘ever-warm’ production facilities.
EDIP will also « support the industrialisation of products stemming from cooperative R&D actions » from the European Defence Fund and be used to set up a Fund to Accelerate defence Supply chains Transformation (FAST).
EDIP also proposes the creation of an EU-wide regime for the security of supply of defence equipment in case of crises.
For EDIP, the Commission intends to invest €1.5 billion from the EU budget between 2025 to 2027. However, there will be a debate as to how to increase this financial number in the short term, and the budget of EDIP will likely be much higher in the next MFF (2028-2035).
The Commission proposes to fully integrate Ukraine and its defence industry in EDIP. Additionally, the EU will open an Innovation Office in Kyiv to matchmake the EU’s innovators with the Ukrainian industry and armed forces.
C&V Consulting welcomes the Commission’s proposal which, if provided with an ambitious financial envelope, has the capacity of radically modernising the European defence market and the European Defence Technological and Industrial Base.
Our consultants are fully mobilised to help our clients seize the opportunities presented by EDIP. Contact us to learn more: contact[a]cnv-consulting.eu