EU Unveils Historic Defence Industrial Strategy to Boost Security and Cooperation

On March 5, 2024, in Brussels, the European Commission and the High Representative announced the groundbreaking European Defence Industrial Strategy (EDIS), alongside a comprehensive proposal for a European Defence Industry Programme (EDIP). This strategic initiative, the first of its kind at the EU level, aims to fortify the competitiveness and readiness of the EU's defence industry in response to the heightened security challenges highlighted by Russia's ongoing war against Ukraine. The EDIS provides a long-term vision for defence industrial readiness within the EU, underpinned by the newly proposed EDIP, which focuses on legislative measures to ensure the timely supply of defence products.

The strategy addresses the challenges faced by the European Defence Technological and Industrial Base (EDTIB) and outlines measures to tap into its full potential. Key actions include facilitating a unified demand for defence capabilities among Member States, ensuring the availability of defence products under any conditions, securing necessary funding, promoting a culture of defence readiness, and strengthening ties with strategic partners like NATO and Ukraine.

Significantly, the EDIS proposes ambitious targets for Member States, such as achieving at least 40% collaborative procurement of defence equipment by 2030 and increasing intra-EU defence trade to represent at least 35% of the EU defence market's value by the same year. Furthermore, it sets a progressive goal for Member States to allocate at least 50% of their defence procurement budgets within the EU by 2030, with an aim to reach 60% by 2035.

The EDIP, pivotal in transitioning from emergency measures to a sustainable framework for defence industrial readiness, entails a €1.5 billion EU budget allocation for 2025-2027. It extends financial support mechanisms from previous initiatives, encourages investments in the EDTIB, and aims to streamline the industrialization of defence technologies. Additionally, the EDIP proposes the establishment of a fund to support SMEs and small mid-caps in the defence sector and enhances EU-Ukraine defence industrial cooperation.

Regulatory innovations introduced by EDIP include the Structure for European Armament Programme (SEAP) to bolster Member States' collaboration on defence equipment, an EU-wide security of supply regime, and the possibility of launching European Defence Projects of Common Interest with EU financial backing. A governance structure involving Member States will oversee the consistency of EU actions in the defence industry sector.

This strategy and programme not only aim to strengthen the EU's defence capabilities but also to support key partners, enhancing overall security and cooperation within the region and with allies.