Partial political agreement reached for European Defence Fund

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EU Commissioner in charge of Internal Market and Industry, Elzbieta Bienkowska at the start of a European competitiveness council at the European Council in Brussels.

Partial political agreement reached for European Defence Fund


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Since 2014, Jean-Claude Juncker, the president of the European Commission, has been committed to re-enforcing the security of EU citizens. His proclamation five years ago was followed in 2016 by the creation of the Commission’s European Defence Fund.

Cross-border security threats can only be survived by strengthening cooperation between Member States, according to the concept developed by the Commission. Earlier in February, Brussels initiated a project to boost the financing of the joint defence project for 2019 and 2020.

This was followed by an announcement on February 20 that a preliminary political agreement had been reached by the European Parliament, Council, and Commission on the future of the European Defence Fund. This is significant in the process of developing the fund as the next step its formal approval by the European Parliament and the Council.

EU Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, commented on the agreement, saying, “This is a major step in making European defence cooperation a reality. The European Defence Fund will help the Member States get better value for taxpayer money, promote a strong and innovative defence industry, and raise the EU’s autonomy and technological leadership in defence.”

Regarding the defence cooperation between the Member States, he suggested that it will help the Bloc spend taxpayer money more efficiently, reduce duplications in spending, and get better value for money.

“Defence cooperation promotes a strong and innovative defence industry and raises the EU’s autonomy and technological leadership in defence. Unthinkable only a few years ago, defence cooperation is becoming a reality today.”

What Steps Are Being Taken to Strengthen the Defence Cooperation?

For the 2017-2020 period, budget-wise, the EU is boosting European defence cooperation with a draft budget of €590 million.

The 2017 budget plan contained Ocean 2020 project, uniting 42 partners from 15 EU countries. This project aims to integrate drones and unmanned submarines into fleet operations. Soon the Commission will present collaborative defence research projects under the 2018 budget.

The Commission will also adopt a work programme to finance joint industrial defence projects under the EU budget for 2019-2020 after taking into consideration the views of the Member States. The EU executive also announced that it would raise the initial funding for the next Multi-annual Financial Framework period of 2021-2027.

The European Defence Fund’s Key Points

In 2018, the Commission came up with a proposition of a European Defence Fund worth €13 billion to fund defence research and the development of prototypes. With the Fund, the EU will become among the top 4 defence research and technology investors in Europe. The key elements of the fund include supporting industrial development, financing colloborative research projects on defence by grants, and providing incentives for projects with cross-border participation of the many SMEs.

The defence fund is complementary to other programmes such as Connecting Europe Facility and Horizon Europe.

“This agreement is yet another important building block to ensure that Europe becomes a stronger security provider for its citizens. The Fund will foster technological innovation and cooperation in the European defence sector, so that Europe benefits from cutting-edge, interoperable defence technology and equipment in novel areas like artificial intelligence, encrypted software, drone technology or satellite communication,” said Commissioner Elżbieta Bieńkowska, who is responsible for the Internal Market, Industry, Entrepreneurship and SMEs, while Emphasising the importance of the fund.

The EU endeavours do not exclude any particular individual from the European Defence Fund. Companies that are established in the EU and not controlled by third countries are eligible. EU-based third country companies which look after the EU’s security and defence interests can be considered for the fund. Entities based outside of the EU won’t be able to benefit from funding but can participate in cooperative projects.

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