Green light for EDIP, the EU’s EUR 1.5 billion defence industry plan

Brussels – The European Parliament and the EU Council last night (16 October) reached an agreement on the European Defence Industry Programme (EDIP), an embryonic common defence to which €1.5 billion will be allocated over the next two years. The agreement came at the last minute, at the fourth and final trilogue, after intense discussions between negotiators over recent weeks.

 In the end, the provisional agreement – which will have to be reaffirmed by the Strasbourg Chamber and the member states – confirms the budget the European Commission proposed in March 2024: EUR 1.5 billion in the form of grants, of which 300 million is directly earmarked to support Ukraine. At the initiative of the European Parliament, it includes the possibility of additional financial contributions, e.g., by channeling additional contributions from the EUR 150 billion SAFE fund. The Socialists and Democrats (S&D) group denounced the “reluctance” of member states to find new funds for the EDIP, which remains somewhat limited for the time being.

The defence industry programme will “boost our capacity to produce and supply critical defence equipment and ensure that we can respond swiftly and decisively to the increasingly complex security environment,” said Troels Lund Poulsen, Defence Minister of Denmark, the country holding the six-month presidency of the EU Council and leading the negotiations with the European Parliament.

 In essence, EDIP will enable Member States to enhance long-term armaments cooperation and establish the first-ever mechanism to ensure the security of supply of defence products throughout the Union. In the deal, the EU Council and European Parliament agreed that the cost of components from third countries should not exceed 35 percent of the estimated cost of the components of the final product. A bar that reflects a balance between the principle of ‘buy European‘ and the willingness to cooperate with partner countries for the benefit of European industry.

The programme will establish a legal framework for European defence projects of common interest, which will have to involve at least four member states to be eligible for funding. Ukraine will also be able to participate. The defence industry in Kyiv will be involved through the Ukraine Support Facility, with a budget of EUR 300 million.

 “Today’s agreement marks real progress; a concrete step towards greater autonomy, stronger capabilities and the protection of our democracies,” said French socialist Raphael Glucksmann, co-rapporteur of the regulation for the European Parliament. The MEP pointed to three primary goals: “Joint investments, joint procurement, and the full integration of Ukrainian and European industries”. 

Faced with the limited budget of EUR 1.5 billion, the EU Council and the European Parliament called on the European Commission to examine options for adding new funds for EDIP over the next two years.