EU foreign policy chief Josep Borrell presented the first-ever European Defence Industrial Strategy. The strategy is designed to strengthen the European defense industry in modern realities. During the presentation, Borrell noted that the member states of the European Union (EU) have increased defense production by 50% since 2022.
According to Borrel, the sharp increase in the volume of defense production has led to certain problems, some of which have been solved. Thus, he stated that the EU countries have sufficient production capacities, but at the same time, manufacturers of defense products do not receive adequate financing. Against this background, he called on the EU member states to " cooperate and coordinate the way the Member States react in order to provide funding for the industry and the capacity for the industry in order to answer the increasing demand."
The strategy for the development of the European defense industry presented by Barrel in the EU was called an ambitious set of new measures to support the competitiveness and increase the readiness of the European defence industry. The text says that the need to draw up a strategy arose against the background of a highly intense armed conflict in Europe. The strategy "sets a clear, long-term vision to achieve defence industrial readiness in the European Union."
The text of the document presents the problems currently faced by the European defence technological and industrial base, as well as proposals to determine the direction of its development for the next decade and the realization of its potential. It is reported that the European defense industrial strategy is a set of measures aimed at:
- Supporting a more efficient expression of the Member States' collective defence demand. This will be based on existing instruments and initiatives, such as the Capability Development Plan (CDP), the Coordinated Annual Review on Defence (CARD) and the Permanent Structured Cooperation (PESCO). It will be supported by incentivising Member States' cooperation in the procurement phase of defence capabilities;
- Securing the availability of all defence products through a more responsive EDTIB, under any circumstances and time horizon. Investments by Member States and the European defence industry in developing and bringing to market tomorrow's state of the art defence technologies and capabilities will be supported. Measures are also proposed to ensure that the EDTIB has at its disposal what it needs even in crisis periods, thereby increasing the EU's Security of Supply;
- Ensuring that national and EU budgets support with the necessary means the adaptation of the European defence industry to the new security context;
- Mainstreaming a defence readiness culture across policies, notably by calling for a review of the European Investment Bank's lending policy this year;
- Developing closer ties with Ukraine through its participation in Union initiatives in support of defence industry and stimulating cooperation;
- Teaming up with NATO and our strategic, like-minded and international partners.
The Strategy sets indicators, aimed at measuring Member States' progress towards industrial readiness. Member States are invited to:
- Procure at least 40% of defence equipment in a collaborative manner by 2030;
- Ensure that, by 2030, the value of intra-EU defence trade represents at least 35% of the value of the EU defence market;
- Make steady progress towards procuring at least 50% of their defence procurement budget within the EU by 2030 and 60% by 2035.
Also, as part of the strategy, the European Commission (EC) has submitted a legislative proposal for the European Defence Industry Program (EDIP). The program is characterized by the EC as a new legislative initiative that will allow the transition from short-term emergency measures to a more structured and long-term approach to the defense industry. This should ensure the continuity of support for the European defence technological and industrial base and accelerate its adaptation to modern conditions.
The program includes financial and regulatory aspects. Thus, EDIP assumes the allocation of €1.5 billion from the EU budget in 2025-2027 to increase the competitiveness of the European defence technological and industrial base and attract investment in the defence sector. The program is also expected to support research and development work carried out through the European Defence Fund, support activities to strengthen supply chains in the field of defense and other defense initiatives. From a regulatory point of view, the program offers a new legal framework to facilitate and expand cooperation between member states in the field of defense equipment, fully complementing the structure of PESCO, and also proposes the creation of a governance structure in which EU member States "are fully involved, to ensure overall consistency of EU action in the field of defence industry".
Source - The European Commission
