The European Commission today unveiled the first European defense industrial strategy, proposing joint arms purchases and a €1.5 billion European Defense Industrial Program (EDIP) by 2027 to speed up defense production in Europe.

These are the two pillars of the new defense industry strategy presented by the European Commission to boost defense capabilities in the EU as the European continent faces the Russian threat, two years after Russia’s unjustifiably continued war of aggression against of Ukraine.

“Europe is still at risk, the war is on our borders and it is a war which does not seem to be ending soon and that is why we need to strengthen our production capacity, moving from an emergency situation to a vision of medium- and long-term support for Ukraine,” said EU High Representative Josep Borrell, adding: “Europe it doesn’t have a Pentagon, so we need to group how member states react, we need a common defense policy.”

The Commission’s plan provides for the following:

  • Common purchase program for at least 40% of defense equipment by 2030
  • Ensure that, by 2030, at least 35% of defense production is traded within the EU.
  • To ensure that by 2030, 50% of the defense procurement of the member states is of European origin and that this should increase to 60% by 2035.

Commission President Ursula von der Leyen wrote in X: “Today we set out our vision for defense preparedness with Europe’s Defense Industrial Strategy. It will support Member States not only to spend more, but also better, together with a European way. And it will connect Ukraine’s know-how with our defense industry to facilitate innovation.”

According to the Commission, to increase European defense industrial readiness, Member States must invest more, better, jointly and Europeanly. To support Member States in achieving these objectives, the European Defense Industrial Strategy presents a set of actions, which aim to:

  • To encourage the joint procurement process by the European defense industry
  • To support technologically advanced investments, so as to ensure the member states with sufficient modern defense equipment, even in times of crisis.
  • Ensuring that national and EU budgets support with the necessary means the adaptation of the European defense industry to the new security framework;
  • Embedding a defense preparedness mindset in all policies, notably by calling for a review of the European Investment Bank’s lending policy this year;
  • Develop closer ties with Ukraine through its participation in Union initiatives to support the defense industry and boost cooperation between EU and Ukrainian defense industries;
  • Cooperation with NATO and our strategic, like-minded and international partners, and closer cooperation with Ukraine.

It is noted that the European Defense Industry Program (EDIP) is the new legislative initiative that will bridge from the short-term emergency measures, approved in 2023 and ending in 2025, to a more structured and long-term approach to achieving defense industrial readiness. This will ensure continuity of support for the European defense industrial and technological base to accompany its rapid adaptation to the new reality. EDIP will mobilize €1.5 billion from the EU budget over the period 2025-2027. The financial support of EDIP will in particular extend the intervention logic of EDIRPA (financial support from the EU budget to offset the complexity of cooperation between Member States during the public procurement phase) and ASAP (financial support of defense industries that increase their production capacity) in order to further encourage investment from the European defense industrial and technological base.

The EDIP budget will also strengthen the EU’s defense industrial cooperation with Ukraine and support the development of its defense industrial and technological base. To this end, the EDIP could potentially draw additional funding from windfall profits from frozen Russian state assets (subject to a decision by the Council following a proposal by the High Representative).

“Today we are approving a European defense industrial strategy and submitting a proposal for a program for the European defense industry. We are doing this to respond to changes in Europe’s safety standard. Our defense spending is on too many different weapons systems, mostly bought from outside the EU. Now that defense budgets in all member states are rising sharply, we will have to invest better, which means a lot of co-investment and investment of Europeans. This will allow us to move from a crisis response mode to a structural defense preparedness mode. In a way that closely integrates Ukraine,” said Commission Vice-President for Competition Margaret Vestager.

Finally, Internal Market Commissioner Thierry Breton said: “With our new industrial defense strategy, the Union sets a clear vision for strengthening our defense industrial preparedness. With the European Defense Industry Programme, the Commission is immediately putting forward an ambitious instrument to start putting the strategy into practice. With the return of high-intensity conflict to our continent, Europe can no longer wait to strengthen the ability of the European defense technology and industrial base to produce more and faster.”