Parliament, Council agree on European defence industry programme

The European Parliament and EU governments have endorsed the European Defence Industry Programme (EDIP), as part of the bloc’s efforts to ensure the availability of weapons and defence systems in time and sufficient volume to counter growing military threats.

“The long-term deterioration of regional and global security requires a step-change in the scale and speed with which the European defence technological and industrial base can develop,” the document reads.

The programme covers the whole defence supply chain, from R&D and innovation through to production and procurement, right the way up to disposal and decommissioning.

The provisional agreement reached on October 16 comes almost two years after the European Commission first tabled its proposal for establishing the EDIP. The aim was to transform the short-term emergency measures adopted in 2023 to support the EU defence sector into a more structural, long-term policy for the industry.

“EDIP is designed to have a lasting impact. It can serve as a reference point for future initiatives and help shape the way European cooperation in defence production is organised beyond 2027,” MEP Marie-Agnes Strack-Zimmermann, who sits with the Renew group and chairs the Parliament’s security and defence committee, said in a statement.

The draft law aims to strengthen Europe’s defence industry by fostering joint common procurement, ramping up its manufacturing capabilities and lifting its defence industrial base, whose estimated annual turnover stands at €70 billion.

“It 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. At the same time, it will deepen our partnership with Ukraine by bringing its defence industry closer to ours, to the mutual benefit of Europe and Ukraine,” said Troels Lund Poulsen, Denmark’s deputy prime minister and minister for defence, in a statement from the EU Council presidency.

The programme has been granted a budget of €1.5 billion from 2025 to 2027, of which €300 million will go to the Ukraine Support Instrument. This aims to modernise the country’s defence industry and facilitate its integration in the EU.

The scheme echoes the Commission’s plans to let research and innovation projects with civil and military applications apply for funding in the next iteration of Horizon Europe. The programme has been exclusively civilian for four decades, but the war in Ukraine and rising global geopolitical tensions have prompted the EU to find ways to have it contribute to defence research and innovation. This in turn could lead to restrictions on participation for security reasons.

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EDIP includes the establishment of a legal framework for European Defence Projects of Common Interest and an EU-wide security of supply regime. The co-legislators also agreed on a “buy European” principle, which requires at least 65% of the cost of components in funded defence projects to originate from the EU or associated countries.

The Parliament and the Council are recommending that the Commission draw up a list of “early-warning indicators” to help identify factors that may disrupt defence supply chains, particularly for “crisis-relevant products.” This includes atypical increases in lead time, forecasted demand, natural disasters, export restrictions and trade barriers.

Meanwhile, the Commission will present a European defence transformation roadmap in November. While the roadmap is not expected to promise any fresh funding for research and development, it should include new ways to boost innovation with the defence industry.