European defence industry programme

What is the European defence industry programme?

How is the programme funded?

EDIP is funded by the EU through its long-term budget (the multiannual financial framework for 2021-2027).

The provisional agreement between the Council and the Parliament confirms the budget proposed by the European Commission, i.e. €1.5 billion, in the form of grants. The total budget includes €300 million in support of Ukraine's defence industry.

The Council and the Parliament invited the Commission to explore options for additional financial resources in the future. 

Moreover, EDIP allows member states or third parties to make financial contributions.
 

Areas covered by the programme

Ramping up defence capacity and supply chains

EDIP aims to boost cooperation in defence procurement among member states. It also aims to increase the European defence industry's manufacturing capacities, thereby reducing lead production time for defence products and addressing existing capability gaps.

EDIP establishes a framework for European defence projects of common interest, which are aimed at developing capabilities of a wider European interest, including those securing access to strategic domains.

Support for Ukraine

EDIP supports Ukraine's defence industry through a dedicated instrument (the Ukraine support instrument), which:

• incentivises cooperative procurement with Ukraine
• finances the ramp-up of the defence industrial manufacturing capacities of Ukrainian companies

The Ukraine support instrument will be endowed with a financial envelope of €300 million. 

Defence supply in crisis situations

Through EDIP, the EU will set up the first ever mechanism to ensure the security of supply of defence products throughout the EU. The mechanism is designed to ensure timely and reliable access to defence products and components during crises.

European military sales mechanism

Through EDIP, the EU will establish a European military sales mechanism that will:

• offer a centralised catalogue of defence products
• provide the possibility to establish 'pools' of defence products to allow for a swift delivery of equipment

Eligibility of companies and products

Companies benefitting from financial support under EDIP must be established and have their executive management structures in the EU. To be eligible for funding, they must also use infrastructure, facilities, assets and resources in the EU. 

At least 65% of the total cost of the components used in defence products must originate from the EU or associated countries (i.e. members of the European Economic Area). Furthermore, for the products to be eligible for funding under EDIP, the design authority, which decides on the design of a product, must generally be in the EU.

In addition, no components are to be sourced from non-associated countries that contravene the security and defence interests of the EU or its member states.

See also

• National escape clause for defence expenditure
• EU defence in numbers
• EU military support for Ukraine