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The EU budget boosts the EU’s defence industry and European security

In a nutshell

Fire Blade 2022 - European Defence Agency helicopter exercise in Hungary

The EU budget has always supported the competitiveness of the Union’s industry. With the return of war to European soil in 2022, the budget has been mobilised to further strengthen the EU’s defence industry and promote research and capability development.

To improve the EU’s ability to protect its citizens, values and interests and contribute to international peace and security, the EU adopted a Strategic Compass. In line with the direction set by the Versailles Declaration, it aims to step up investment, harness innovative and critical technologies and build a more integrated and competitive European defence market. One of the aims is to improve coordination between Member States as regards capabilities and equipment standardisation.

The role of the EU budget

Currently, a budget of close to €8 billion for 2021-2027 is dedicated to the European Defence Fund. €2.7 billion to fund collaborative defence research and €5.3 billion euros to fund collaborative capability development projects complementing national contributions.

 

More details – results achieved

In 2022 alone:

  • €1 billion mobilised via the 2022 European Defence Fund to boost the EU’s defence capabilities and provide new tools for defence innovation.
  • €1.2 billion made available to 61 defence industrial research and development projects (supported by around 700 companies) selected under the 2021 European Defence Fund.
  • €2 billion investment announced for the EU Defence Innovation Scheme (Consists of budget from the European Defence Fund (€1.46 billion), combined with co-funding from Member States (€90 million) and expected leverage of €400 million from other public and private sources.)
  • €500 million proposal for a new short-term instrument via the regulation establishing a European Defence Industry Reinforcement through Common Procurement Act to incentivise the common procurement by Member States of urgent and critical defence products from EU industry.

Actions of the EU budget are complemented by the European Peace Facility (EPF),  an off-budget funding mechanism for EU actions with military and defence implications under the Common Foreign and Security Policy (CFSP).