Defence: European Commission paves the way for first joint industrial projects under EU budget

Once the Commission adopts the work programme for the European Defence Industrial Development Programme, it will launch calls for proposals under the EU budget for 2019-2020. This will help pave the way for the future European Defence Fund for the period 2021-2027. In a world of increasing instability and cross-border threats to our security, no country can succeed alone. That is why the Juncker Commission is making an unprecedented effort to protect and defend Europeans. It has already taken first steps to boost cooperation between Member States in the field of defence research and defence industry development, with more to follow in 2019-2020. In June 2018, the Commission also proposed a fully-fledged €13 billion European Defence Fund for 2021-2027, which is now under discussion by the European Parliament and Council. Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “Defence cooperation in Europe helps Member States spend taxpayer money more efficiently, reduce duplications in spending, and get better value for money. Defence cooperation promotes a strong and innovative defence industry and raises the EU’s autonomy and technological leadership in defence. Unthinkable only a few years ago, defence cooperation is becoming a reality today.” Commissioner Elżbieta Bieńkowska, responsible for Internal Market, Industry, Entrepreneurship and SMEs, added: “To protect our citizens, Europe needs cutting-edge, interoperable defence technology and equipment in novel areas like artificial intelligence, encrypted software, drone technology or satellite communication. Thanks to the European Defence Fund, we are making this happen. We are ensuring Europe becomes a stronger security provider.” The European Commission, under the steer of President Juncker and with the support of Member States, is taking the following steps: For the 2017-2020 EU budget period: For the first time in European history, the EU is incentivising European defence cooperation with a budget envelope of €590 million (€90 million for research over 2017-2019 and €500 million for developing equipment and technology during 2019-2020).

• Defence research cooperation is already materialising. First EU grant agreements under the 2017 budget included the research project Ocean2020, which brings together 42 partners from 15 EU countries and supports maritime surveillance missions at sea and to that end will integrate drones and unmanned submarines into fleet operations. In the coming weeks the Commission will announce further collaborative defence research projects under the 2018 budget and present the work programme and final call for proposals under the remaining budget tranche for 2019.
• Following the views of Member States, in a few weeks, the Commission will adopt the first ever Work Programme to co-finance joint industrial projects in the field of defence under the EU budget for 2019-2020. The projects for which calls for proposals under the European Defence Industrial Development Programme (EDIDP) will be launched will be consistent with the priorities identified in the context of the Permanent Structured Cooperation (PESCO), the Capability Development Plan (CDP) and NATO.

For the 2021-2027 EU budget period: On the basis of these two “pilot” programmes, the Commission proposed in June 2018 a fully-fledged European Defence Fund worth €13 billion under the next EU long-term budget to cover both the research and capability strands. Following positive votes in the European Parliament and Council, the proposal is now being discussed by the co-legislators in the final so-called trilogue negotiations.   Background In his political guidelines in June 2014, President Juncker made strengthening European citizens’ security a priority. He announced the creation of a European Defence Fund in his 2016 State of the Union address. The European Commission presented a first set of actions in June 2017 in order to allow defence cooperation at EU level to be tested by means of the Preparatory Action on Defence Research (PADR) for 2017-2019, as well as through the European Defence Industrial Development Programme (EDIDP) for 2019-2020. The implementation of EDIDP requires that the Commission adopts a work programme to define the categories of projects which will be supported following open calls for proposals. The work programme will be adopted in the coming weeks after consultation with the Member States and a positive opinion to be adopted by qualified majority. In June 2018, the Commission proposed a fully-fledged European Defence Fund delivering on the commitment made in June 2017 to scale up initial funding for the period 2021-2027. The new €13 billion European Defence Fund will provide €4.1 billion to directly finance competitive and collaborative research projects, in particular through grants. Beyond the research phase, €8.9 billion will be available to complement Member States’ investment by co-financing the costs for prototype development and the ensuing certification and testing requirements. The Fund will place the EU among the top 4 defence research and technology investors in Europe, and act as a catalyst for an innovative and competitive industrial and scientific base. PESCO projects may, if eligible, receive an additional co-financing bonus of 10%, but funding is not automatic. The European Defence Fund will complement other EU programmes, in particular the budget of €6.5 billion earmarked for the Connecting Europe Facility to enhance the EU’s strategic transport infrastructures to make them fit for military mobility, and the new €100 billion research and innovation programme Horizon Europe.