Parliament wants to foster innovation with a €11.5 billion European Defence Fund
- €7.84 billion for prototype development and the ensuing certification and testing requirements
- €3.62 billion to directly finance competitive and collaborative research projects
- the EU among the top 4 defence research and technology investors in Europe
MEPs approved the proposal to allocate €11.5 billion in 2018 prices (€13 billion in current prices) to the EU Defence Fund for 2021-2027, aiming a more ‘European’ approach, to defence.
MEPs agreed that it will provide €3.62 billion in 2018 prices (€4.1 billion in current prices) to directly finance competitive and collaborative research projects, in particular through grants. Beyond the research phase, €7.84 billion in 2018 prices (€8.9 billion in current prices) will be available to complement Member States' investment by co-financing the costs for prototype development and the ensuing certification and testing requirements.
After the vote rapporteur Zdzisław KRASNODĘBSKI (ECR, PL) said: "By supporting wider cooperation between defence companies all over the Union, the European Defence Fund aims to free the potential of defence industries of all Member States. Their cooperation should also foster innovation in the EU and thus strengthen the EU economy as a whole."
Favouring cross-border participation of SMEs and mid-caps
The Fund will place the EU among the top 4 defence research and technology investors in Europe, and act as a catalyst for an innovative and competitive industrial and scientific base. The European Defence Fund will complement other EU programmes, in particular the budget of €6.5 billion earmarked for the Connecting Europe Facility to enhance the EU's strategic transport infrastructures to make them fit for military mobility.
The proposal has two specific objectives:
- to support collaborative research projects that can significantly boost the performance of future capabilities while aiming at maximising innovation and introducing new defence products and technologies, including disruptive ones;
- to support collaborative capability projects of defence products and technologies consistent with defence capabilities priorities agreed by Member States within the common foreign and defence policy CFSP/CSDP. According to the Resolution, the fund will ultimately lead to a greater interoperability between Member States' capabilities.
The proposal for the European Defence Fund was approved by the European Parliament with 337 votes to 178, and 109 abstentions.
The European Parliament is now ready to start negotiations with EU member states. MEPs want a swift agreement on MFF-related files, in order to avoid the serious setbacks for the launch of the new programmes due to the late adoption, as experienced in the past.
The idea of the European Defence Fund goes back to the political guidelines of Commission President Juncker (June 2014) and his 2016 State of the Union address. A first version of the Fund was presented in June 2017. This fund allowed defence cooperation at EU level to be tested by means of the Preparatory Action on Defence Research (PADR) for 2017-2019 and the European Defence Industrial Development Programme (EDIDP) for 2019-2020.
The main features of the European Defence Fund are:
- Financing of projects which help make the EU safer;
- Only collaborative projects involving at least 3 participants from 3 Member States are eligible;
- The EU will only co-fund the development of common prototypes where Member States commit to buying the final product;
- Cross-border participation of SMEs and mid-caps is strongly incentivised by providing higher financing rates, favouring projects by consortia which include SMEs and, if necessary, launching dedicated calls for proposals;
- Targeting breakthrough innovation, with 5% of the funds dedicated to disruptive technology and innovative equipment allowing the EU to boost its long-term technological leadership;
- Permanent Structured Cooperation projects may receive an additional co-financing bonus of 10%