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EU funding for collaborative cross-border defence research and development (R&D) projects
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Almost 8 bln € for co-financing costs of research, prototype development, certification and testing of defence technologies and products
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Wider inclusion of SMEs and mid-caps’ in defence industry supply chains
MEPs backed a 7.9 billion euro scheme in support of common R&D defence projects on Thursday, in order to streamline costs and boost interoperability of defence systems.
In the 7 years to come, the European Defence Fund (EDF) will cover projects jointly agreed by Member States and compatible with the Union’s defence priorities as defined within the framework of the Common Security and Defence Policy. The Fund will also take into consideration Member States’ cooperation within other regional and international organisations such as NATO.
The Fund will finance collaborative projects involving at least 3 participants from at least 3 Member States, provide co-funding for common prototypes and promote cross-border activities of small and medium-sized enterprises by e.g. providing higher financing for the projects that involve such companies.
Moreover, up to 8% of the Fund will be dedicated to disruptive technologies and an additional 10% bonus to eligible projects developed within the framework of the Permanent Structured Cooperation (PESCO). The Fund should also contribute to reduce duplication and strengthen interoperability of the defence systems used by Member States’ armed forces.
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“The adoption of this scheme is an important signal sent by the Member States to their citizens and companies: from now on, we want to pull our resources together in order to increase quality of defence technologies produced by the European defence sector, while reducing their cost. This progress should benefit not only Member States’ armed forces, but also their industries, which desperately need every possible stimulus helping them to properly recover from the consequences of the COVID-19 pandemic. Furthermore, the Fund will complement Member States’ defence spending efforts and should thus be perceived as part of a broader answer to the justified demands from our Allies.” said Zdzisław Krasnodębski (ECR, PL), EP rapporteur on the file.
Background
The EU’s geopolitical context has changed dramatically in the last decade. The situation in its neighbouring regions is unstable and it faces a complex and challenging environment in which new threats, such as hybrid and cyber-attacks, are emerging, and more conventional challenges are returning.
European defence faces significant market inefficiencies linked to untapped economies of scale (fragmentation of national markets with a single buyer) and duplication of resources at national level. The demand comes almost exclusively from Member States, but defence budgets, in particular for research and development (R&D), have seen important budget cuts in a number of Member States in the past 10 years.
At the same time, the costs of defence equipment and in particular R&D have increased, while cooperation between Member States in R&D and defence equipment investments has remained limited.
The European Defence Fund will be the first EU programme to finance common defence-related R&D projects. It will come as a joint successor of the European Defence Industrial Development Programme (EDIDP) and the Preparatory Action on Defence Research (PADR), that were two pilot programmes devoted to cooperative projects by the European defence industry launched under the current Multiannual Financial Framework.