The proposed regulation

Here is what the EU's proposed new defence industry programme envisages

The proposal is under consideration for an opinion by the Defence and Productive Activities Committees of the Chamber of Deputies. The programme would have a budget of EUR 1.5 billion for the period 2025-2027 from the Multiannual Financial Framework (MFF) 2021-2027

by Andrea Carli

Ucraina, svolta per l'uso delle armi contro Mosca

3' min read

3' min read

The Russian Federation's large-scale military invasion of Ukraine not only caused extensive damage to civil infrastructure, but also had as one of its consequences the impairment of demand for certain defence products in Europe. All of this has happened with a limited 'peacetime' production capacity of the European defence industrial and technological base (the acronym is: 'EDTIB'). In the long run, this situation raises doubts about industrial readiness in the European defence sector, i.e. the ability of the EDTIB to respond effectively (in terms of time and scope) to changes in European demand for defence products. On 5 March, the European Commission proposed a new regulation on the European Defence Industry Programme (EDIP).

In particular, the proposal, which is currently being examined for an opinion by the Defence and Productive Activities Committees of the Chamber of Deputies, aims to establish anew European Defence Improvement Programme (EDIP) with the objective, on the one hand, of strengthening the competitiveness of the European Defence Technological and Industrial Base (EDTIB), according to the perspectives of the new European Defence Industrial Strategy (EDIS), which accompanies the proposal. On the other hand, the initiative takes into account the urgency to supply Ukraine with defence products.

Loading...

Budget of EUR 1.5 billion for the period 2025-2027

The programme would have an allocation of EUR 1.5 billion for the period 2025-2027 from the Multiannual Financial Framework (MFF) 2021-2027 (the allocation is already foreseen in the recent mid-term review agreement of the same framework). The proposal consists of five chapters and 67 articles. Here are the main solutions envisaged.

Parallel to the European one, there is the grand plan proposed by NATO Secretary Jens Stoltenberg himself to 'institutionalise' aid coordination under the umbrella of the Atlantic Alliance and 'inject' new resources for military support to Kiev (the famous 100 billion plan over five years, which according to unconfirmed rumours could be reconfigured into 40 per year, it remains to be seen over what timeframe). The work is in progress and will mature in time for the NATO summit in Washington.

The objectives

.

Instead, it aims to strengthen the European defence industry's capacity to ensure the timely production, availability and supply of defence products, and to contribute to the recovery, reconstruction and modernisation of the Ukrainian defence industry, as part of the EU's future security commitments to Ukraine and in view of its future accession to the European Union.

Pool for Defence Industrial Readiness

In particular, solutions to increase the defence industrial readiness of the Union and its Member States include the establishment of a Defence Industrial Readiness Board and the establishment of a cooperation programme with Ukraine aimed at the recovery, reconstruction and modernisation of the country's defence industrial and technological base. A Defence Industrial Readiness Pool is also envisaged to increase the availability and accelerate the delivery time of EU-manufactured defence products, ensuring an immediate and preferential purchase or use/rental option for member states, associated countries and Ukraine.

European Defence Projects of Common Interest

.

The European Commission can identify European projects of common interest in the area of defence to be financed in the work programme. The project must involve at least four Member States and the Commission may, where appropriate, participate in the project. Up to 25 per cent of the programme's financial resources may be allocated to European projects of common interest in the field of defence.

The 'Fast Fund'

.

In order to mobilise and accelerate the investments needed to increase the manufacturing capabilities of SMEs and small mid-caps in the defence sector, and to reduce the risks of these investments, the EU's proposed regulation envisages that a blended financing operation offering support in the form of debt and/or equity may be set up (fund to accelerate the transformation of defence supply chains - Fast).

The Seap Structure

.

The regulation also outlines the structure for a European Armament Programme (Seap). The structure provides Member States with a voluntary legal framework to stimulate and facilitate armament cooperation throughout the life cycle of defence products. This means that three or more Member States willing to cooperate to jointly develop, acquire, use and maintain defence equipment will be able to use the Seap. Participation in a Seap requires Member States to invest in the EU defence industry and provides specific advantages for cooperation: favourable access to EU funding; harmonised and simplified rules for joint procurement; exemption from VAT in the case of co-ownership by the Seap; and incentives to adopt a common approach to the control of material exports. A Seap will be open to Member States, associated countries (e.g. Norway) and Ukraine.

 

Copyright reserved ©
Loading...

Brand connect

Loading...

Newsletter

Notizie e approfondimenti sugli avvenimenti politici, economici e finanziari.

Iscriviti