European Union Launches European Defence Industry Program: €1.5 Billion Investment and Support for Ukraine

The European Parliament approved on Tuesday in Strasbourg the first program dedicated to the European defence industry, the European Defence Industry Programme (EDIP).

The regulation, previously agreed informally with the Council, aims to strengthen Europe’s industrial and technological defence base, promote joint public procurement, enhance production capacities in the defence sector, and support Ukraine amid the ongoing war with Russia.

EDIP has a total budget of €1.5 billion, of which €300 million is earmarked for the Ukraine Support Instrument. In addition, the Fund for Accelerating the Transformation of Defence Supply Chains (FAST) will be created, benefiting from at least €150 million in additional contributions, according to caleaeuropeana.ro.

MEPs succeeded in increasing the program’s budget through additional funds from the “Action for Security of Europe” (SAFE) instrument. Member states can also leverage unused resources from the Recovery and Resilience Facility to support European defence projects.

A key principle of EDIP is “buy European products.” For defence products to qualify for funding, components from non-associated third countries cannot exceed 35% of the total estimated cost. The regulation also establishes the legal framework for European Defence Projects of Common Interest, which must involve at least four EU countries, with Ukraine eligible to participate. The Ukraine Support Instrument will help modernize Ukraine’s defence industry and integrate it into the European sector.

According to Marie-Agnes Strack-Zimmermann (Renew, Germany), Chair of the Security and Defence Committee, “EDIP marks a significant step towards a faster, more effective European approach to defence public procurement and the strengthening of European defence capabilities with long-term impact.” François-Xavier Bellamy (EPP, France), co-rapporteur of the Industry, Research, and Energy Committee, emphasized that the program “will help build a more resilient and sovereign Europe through joint investments and integration of the Ukrainian defence industry.” Raphaël Glucksmann (S&D, France) added that EDIP will reverse Europe’s historical dependency on imports and ensure strategic autonomy for the European defence industry.

The regulation was adopted with 457 votes in favour, 148 against, and 33 abstentions, and now requires official approval by EU member states before being published in the Official Journal of the European Union.

The European Commission proposed EDIP on 5 March 2024. The program complements short-term emergency measures, such as the Ammunition Support Production Regulation (ASAP) and EDIRPA for joint public procurement, providing a long-term, structural approach.

Europe’s defence industrial base includes large multinational companies, medium-sized enterprises, and over 2,000 SMEs, with a combined annual turnover of approximately €70 billion, highlighting EDIP’s strategic and economic potential for the continent.