La European Commission dresses up in military green and launches its first strategy for the defense industry Edip (European Defense Industry Programme). This new instrument will also be open to Ukraine, which will be treated almost like an EU member state.
The EU plan, which aims to incentivize European industries in the sector, includes a program of joint purchases, common procurement e measures to ensure that, by 2030, at least 35% of the entire market value is in the EU. On the financing side, the The , but there are no references to Eurobonds. Furthermore, funds of 1,5 billion euros until 2027 to ensure that the continent is "ready to react" to any eventuality.
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Anticipated in its general lines to the MEPs by the President of the European Commission herself, Ursula von der Leyen, this is the first strategy for the common defense of the EU. The general lines had been hypothesized by some observers in the last few hours. The focus is on supporting Member States in the process of supplying and to increase production capacity, but also aims to "establish a Background for accelerating the transformation of defense supply chains (Fast)” and to facilitate access to debt and equity financing for small and medium-sized enterprises. The hypotheses regarding this fund speak of a base of 100 billion.
The idea is to strengthen the industrial cooperation nin the defense sector between the EU and Ukraine with the establishment of a Innovation Office in Kiev, as announced by von der Leyen, and the possibility of “drawing further funding from windfall profits arising fromimmobilization of Russian sovereign assets“, following a decision by the Council on a proposal from the EU High Representative for Foreign Affairs and Security Policy, Josep Borrell.
Russia's war against Kiev has pushed many European countries to increase military spending, but for Brussels purely national efforts are less efficient and the EU executive aims to play a greater role in military industrial policy, even if the issue is delicate. The stated aim of trying to help the European defense industry better prepare for existing and potential major challenges, such as a sudden surge in demand for large quantities of artillery ammunition.
Joint purchases, as done with gas and vaccines
With regard to regulatory issues, Edidp will provide a new legal framework – the Structure for the European Armaments Program (SEAP) – “to facilitate and increase cooperation between Member States on equipment” and will also allow the launch of European defense projects of common interest, “with potential financial support from EU".
It is therefore necessary to look precisely at the strategy and indicators to measure the progress of Member States towards industrial preparedness. The Commission invites the Twenty-Seven to purchase at least 40 percent of the equipment “collaboratively” by 2030 (in other words through joint purchases as done in recent years with gas and anti-Covid vaccines), to guarantee by the same date that the value of intra-EU trade in this sector represents at least 35 percent of the value of the EU defense market and reach at least 50 percent of national supply within the EU (by 2030) and 60 percent by 2035. In this scenario, the increase in the Union's industrial commitment will benefit “ also of the EU's main partners", including NATO which will see 18 of its member countries exceed the target of 2 percent spending in relation to GDP this year.
