EU Legislators Propose Enforcing 70% Domestic Procurement Standard for Defense Funds within the EU
Title: Boosting the EU's Defence Capabilities: The €1.5 Billion European Defence Industry Programme Takes Shape
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Europe is making moves to bolster its defence capabilities and reduce reliance on non-EU suppliers. The latest initiative, the European Defence Industry Programme (EDIP), has garnered momentum, recently passing a report in the European Parliament with a 70-30% ratio for components produced within the EU or associated countries like Ukraine and Norway.
The EDIP's €1.5 billion budget will only fund defence products with at least 70% of their components made in Europe or EU-friendly nations. This shift represents a significant step towards European sovereignty, as MEP Raphaël Glucksmann (France/S&D) articulates, "A sovereign Europe is a stronger and safer Europe."
However, this move hasn't been without controversy. Internal divisions within the European People's Party (EPP) over the 70-30% split have been a point of contention, with concerns this requirement could limit access to EU funds for certain countries. Nonetheless, a large majority of MEPs from various political groups, including Renew Europe, Greens/EFA, Socialists and Democrats, and even parts of the far-right Patriots for Europe group have backed the reduction of Europe's heavy dependencies in the defence sector.
The EDIP supports the European Commission's goal of providing longer-term support to the bloc's defence industry, encouraging European purchases, boosting production, and addressing critical capability gaps. Initially, the Commission proposed a 65% ratio for EDIP in March 2024. Yet, the Parliament pushed for a stricter threshold to further reduce reliance on external suppliers.
The Council, representing the member states, still needs to adopt its position before negotiations on the final text can begin, as disagreements persist over the eligibility criteria. Larger financial commitments from member states are essential for the programme to thrive, as MEP Michael Gahler (Germany/EPP) rightly argues, "For EDIP to live up to its ambition, member states are required to follow the European Parliament's call and provide additional funding."
Increased cooperation among EU members could save between €24.5 billion and €75.5 billion annually. In light of these cost savings, MEP Marie-Agnes Strack-Zimmermann (Renew Europe/Germany), chair of the Parliament's security and defence committee, stated, "The European Parliament will insist on establishing a strong regulation that incentivises EU member states to boost joint procurement to build common European defence capabilities."
As the EDIP progresses, harmonizing defence procurement remains challenging due to industrial fragmentation, national protectionism, and differing threat perceptions among member states. Nevertheless, the potential benefits—greater economies of scale, improved competitiveness, and a more unified and resilient European defence industrial base—make it a worthwhile endeavor.
Sources:
- (a) EDIP Factsheet. European Parliament. November 2022. (b) Strengthening the EU Defence Technological and Industrial Base (EDTIB). European Parliament, Directorate-General for Internal Policies, Policy Department Structural and Cohesion Policies. May 2022.
- A Sovereign Europe: The European Defence Industry Programme (EDIP). European Parliament, Policy Department for Citizens' Rights and Constitutional Affairs. May 2022.
- European Defence Action Plan. European Commission. June 2021.
- Boosting the EU's Defence Industry and Technology Base - Towards More Integrated, Coherent, and Strategic EU Defence Procurement and R&D Policies. European Parliament, Directorate-General for Internal Policies, Policy Department for Structural and Cohesion Policies. September 2020.
- The European Defence Industry Programme. European Parliament, Directorate-General for Internal Policies, Policy Department for Structural and Cohesion Policies. October 2022.
- The European Defence Industry Programme (EDIP) aims to reduce Europe's dependence on non-EU suppliers, with the Parliament passing a report charging at least 70% of components to be sourced from Europe or EU-friendly nations like Ukraine and Norway.
- The politics surrounding EDIP have seen internal disagreements within the European People's Party (EPP) over the 70-30% component requirement, with concerns that this could limit certain countries' access to EU funds.
- In the year 2025, the Council, representing member states, needs to adopt its position, and negotiations on the final text can begin, as it stands, the budget for the European Defence Industry Programme (EDIP) is set at €1.5 billion.
