One of the EU’s main duties is to protect its citizens. Europe must progressively ensure its own security through collective e¬ orts. No member state is strong enough to meet the growing threats and challenges on its own.
Attitudes to more defence cooperation have changed rapidly in an increasingly unstable world. In the last six months, more progress has been achieved in defence cooperation in Europe than in the last 60 years.
However, political will on its own is not sufficient. If Europe is to be credible as a security provider, it needs to achieve strategic autonomy in critical technologies and capabilities. This in turn requires a modern, competitive and innovative European defence industry.
In November last year, the Commission adopted its European defence action plan, which sets out a range of measures to support the competitiveness of the defence industry, reinforce the single market and strengthen innovation. The plan’s flagship proposal was a European defence fund, which will allow the Commission to direct EU funds to supporting collaborative defence research and capability development.
Launched on 7 June, the European defence fund is a game changer. For the first time, EU funds will be mobilised to support the entire life-cycle of defence product development. SMEs are crucial to Europe’s defence sector.
That is why the fund has as a core objective of ensuring the maximum opportunities for all member states and SMEs to participate. It has two main windows: research and capabilities.
In the area of research, the Commission, thanks to the support of the European Parliament, has launched the preparatory action on defence research with a proposed budget of €90m over three years. The first grant agreements for concrete collaborative research projects will be signed before the end of this year.
The preparatory action will be an important milestone on the way to the ultimate objective of a dedicated future defence research programme post-2020, with a proposed annual budget of €500m.
The Commission is now working on the 2018 work programme. In this context, SME participation will be warmly welcomed, but of course the proposals should be consistent with EU priorities and contribute to EU strategic autonomy.
While the research window is up and running, the Commission has also initiated steps to prepare the capabilities window. The proposed regulation for a European defence industrial development programme (EDIDP), which the Commission put forward on 7 June this year, will target the development stage of collaborative projects and ensure full consistency with the research programme.
It will be limited to two years (2019-2020) and will mainly cover the prototype phase with support covering 20 per cent of costs, increasing to as much as 100 per cent for other actions in the development phase, such as studies and testing.
Projects should correspond to capability priorities as defined by member states. The selection of projects will be done in close cooperation with member states, which will be in the driving seat at all stages of the implementation of the programme.
The programme aims to create a pan-European defence industry, and part of the budget will be reserved for actions involving SMEs in cross-border partnerships. The Commission has proposed a budget of €500m for the two years.
The defence fund is an unprecedented and ambitious proposal from the Commission. It could prove to be the key to incentivising greater and sustained European defence industry cooperation and, consequently, strengthening our strategic autonomy.
Our objective with the fund is clear: by spending together, we can spend better and increase efficiency in defence industry and ultimately eliminate wasteful duplication in defence spending.
The Commission’s objective is not to substitute member states, which are primarily responsible for investing in research. Through the defence fund, the Commission will make its contribution, particularly to incentivising cooperation and contributing to a viable and sustainable European industrial technological base for defence and security.
The European defence fund complements the upcoming launch of a Permanent Structure Cooperation (PESCO) in defence. Member states’ recent decision to create this cooperation is a historic step. The European defence fund, while broader than PESCO, will incentivise PESCO-related projects through an increased financing rate.
The proposal for a European defence industrial development programme is now under consideration by member states and the European Parliament. It is crucial to have an agreement by early 2018 and for governments and industry to team up and come forward with concrete projects so we can move ahead quickly.