European Defense Fund on track with 525 million euro.

The European Commission has just adopted the work programs to co-finance joint defense industrial projects during the 2019-2020 period.

European Defence Fund, initial action plan and funding (Picture source: European Commission)

The first work program of the European Defense Industrial Development Program (EDIDP) agreed with the Member States provides for co-financing of EUR 500 million for the joint development of defense capabilities in the 2019-2020 period.

• Facilitate the operations, protection and mobility of military forces: EUR 80 million is available to contribute to the development of NRBC threat detection capabilities or anti-drone systems.

• Information, secure communications and cyberspace: € 182 million will be dedicated to cybersecurity and cyber defense, space surveillance and early warning capabilities or maritime surveillance capabilities.

• Ability to conduct state-of-the-art operations: € 71 million will support the upgrade or development of the next generation of ground-level precision strike capabilities, ground combat capabilities, air-control capabilities and future capabilities naval systems.

• Innovative defense technologies and SMEs: EUR 27 million will support solutions in the field of artificial intelligence, virtual reality and cyber technologies, as well as support for SMEs.

• In addition, two projects have been proposed for a direct award: EUR 100 million to support the development of Eurodrone, a key capacity for Europe's strategic autonomy, and EUR 37 million to support ESSOR military communications interoperable and secure.

Background

The European Defence Fund is a fund managed by the European Union (EU) for coordinating and increasing national investment in defence research and improve interoperability between national forces. It was proposed in 2016 by President Jean-Claude Juncker and established in 2017. The fund has two stands; research (€90 million until the end of 2019 and €500 million per year after 2020) and development & acquisition (€500 million in total for 2019-20 then €1 billion per year after 2020). In July 2018, The European Commission announces that the budget for 2021-2027 will be €13 billion. Together with the Coordinated Annual Review on Defence and Permanent Structured Cooperation, it forms a new comprehensive defence package for the EU

In 2018, the Council and the European Parliament established the European Defence Industrial Development Programme (EDIDP), under the current MFF and with a total budget of €500 million. The EDIDP also has the objective to foster collaborative defence capability development and reinforce the competitiveness and innovation capacity of the Union's defence industry. The EU wants to strengthen the global competitiveness and innovation capacity of the Union's defence technological and industrial base.

On 13 June 2018, the European Commission presented its proposal for a regulation of the European Defence Fund as part of the upcoming MFF with a proposed envelope of €13 billion. The European Defence Fund aims to foster innovation and allow economies of scale in defence research and in the industrial development phase by supporting collaborative projects.

In its partial general approach, the Council broadly agrees with the Commission proposal. In particular, it confirms the overall objectives and structure of the Fund, including the intention to invest in disruptive technologies. It mostly seeks to clarify a number of aspects in regards to the eligibility of entities, and ownership of the results. It also seeks to clarify the award procedures and criteria and the provisions concerning the share of the indirect costs that will be covered by the Fund, the latter being an important element to make the Fund more attractive for industry players. The Council further stresses that special attention will be paid to Small and Medium Enterprises (SMEs) and mid-caps in the Union.

On 19 November 2018, the Council adopted its position (partial general approach) on the European Defence Fund proposed by the European Commission in the context of the Multiannual Financial Framework (MFF) for 2021-2027.