EU Commission amends budget to boost defense spending

Brussels – New targeted amendments to existing EU funding programs will support faster, more flexible, and coordinated investments in Europe’s defense technological and industrial base (EDTIB). Under a new Regulation to stimulate defense-related investments within the EU budget proposed today by the Commission, the EU will strengthen its defense readiness 2030 and will implement the ReArm Europe plan.

The Commission said the proposed changes will enhance the ability of the EU and Member States to develop, scale up, and innovate in key defense capabilities while streamlining access to EU funds for defense-related projects.

The proposal broadens the scope of the Strategic Technologies Platform for Europe (STEP) to technologies and products in the defense sector, particularly those identified as priority capabilities in the recent White Paper on European Defense – Preparedness 2030. This approach ensures that STEP effectively supports the development of cutting-edge technologies essential to EU defense readiness by allocating selected projects under the European Defense Fund, Horizon Europe, and the Digital Europe program a STEP seal. The extended scope of STEP is also expected to boost investments in critical technologies for defense under cohesion policy funded by the EU budget, particularly under the specific objectives of the European Regional Development Fund (ERDF) and Cohesion Fund (CF). This approach ensures that STEP effectively supports the development of cutting-edge technologies essential for the EU’s defense preparedness.

Through the Horizon Europe regulation, the European Innovation Council (EIC) reach will include start-ups working on dual-use and defense-related innovations. The objective is to foster a dynamic innovation ecosystem that speeds up developing and deploying cutting-edge dual-use and defense technologies, like AI and cybersecurity.

The Digital Europe Program (DEP) should also expand to include dual-use applications. This will offer crucial support for defense technologies, particularly in developing and operating AI Gigafactories. These factories are vital for scaling up the production of advanced technologies with dual-use capabilities relevant to both civilian and defense sectors.

The Regulation introduces additional flexibility in using EU funding to bolster a robust and competitive European defense industry. In particular, the Regulation includes a ‘landing clause’ within both the European Defense Fund (EDF) and the Act in Support of Ammunition Production (ASAP). This provision allows Member States, on a fully voluntary basis, to transfer resources allocated to them under cohesion policy funds to these two programs. The duration of ASAP is also extended until December 31, 2026.

Lastly, changes to the Connecting Europe Facility (CEF) will enhance military mobility and dual-use digital infrastructure support. First, it will create more favorable conditions for Member States to transfer cohesion funds to CEF for dual-use transport infrastructure projects. Second, it will expand the CEF digital program to support dual-use digital capacities, like cloud, AI, and 5G systems, among others.

This proposed amendments package will complement the Omnibus Defence Simplification Package, expected to be presented by the Commission in June 2025. It will further streamline EU regulations and processes, enabling faster and more efficient defense investment and cooperation across Member States.

Five Star Movement MEP Danilo Della Valle disagrees and, in a statement, said: “We will oppose in the European Parliament these proposals that are part of the so-called Omnibus package: citizens have very different priorities. The EU should work to promote peace and prosperity in line with the teachings of Pope Francis.” According to Della Valle, “the European Commission is stubbornly pushing forward with its military escalation and has approved a new regulation to facilitate investment in defense— a ploy to siphon EU funds away from the poorest regions and redirect them toward the arms industry.”