Fostering defence innovation through the European Defence Fund

The European Parliament on Thursday adopted the partial agreement on the EU Defence Fund for 2021-2027, aiming for a more ‘European’ approach to defence.

328 MEPs voted in favour of the partial deal with EU ministers, with 231 against, and 19 abstaining. The EU Defence Fund will foster technological innovation and cooperation in the European defence sector and aims to place the EU among the top four defence research and technology investors in Europe.

Parliament advocates a budget of €11.5 billion in 2018 prices (€13 billion in current prices). This sum however is still to be discussed during the negotiations on the EU’s 2021-2027 long-term budget.

Main features of the European Defence Fund for 2021-2027 include:

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  Support to the entire industrial development lifecycle of defence products from research (up to 100%) to prototype development (up to 20%) to certification (up to 80%);
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  Small and medium-sized enterprises (SMEs) and mid-caps (a company valued at 2 -10 billion dollars) are given incentives to participate, as they are provided with higher financing rates, and projects by consortia which include SMEs are favoured;
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  Projects will be defined according to defence priorities agreed by member states under the Common Foreign and Security Policy but other priorities, such as those of NATO, can also be taken into account;
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  Only collaborative projects involving at least three participants from three member states or associated countries are eligible.

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Rapporteur Zdzisław KRASNODĘBSKI (ECR, PL) said: “I believe that the European Defence Fund will help to jointly develop innovative defence products and technologies in cooperation between defence industries from different Member States, including those not involved in this process so far. Thanks to the EDF, we will not only prevent taxpayer's money being wasted on unnecessary duplication of defence capabilities, but more importantly also increase Europe’s security and create new jobs in the defence industry sector.”

Next steps

The newly elected European Parliament will continue negotiating the outstanding issues with member states.