A political agreement has been reached between the European Parliament and the Council on the European Defence Industry Programme (EDIP), which will be supported by a budget of €1.5 billion for the period 2025–2027.
The programme is designed to bolster the European defence sector by promoting common procurement and accelerating industrial production capacity. The European Commission has welcomed the agreement, framing it as a crucial step towards implementing its Defence Readiness Roadmap 2030 and enhancing the resilience of the continent’s defence industrial base. The core objective of EDIP is to address systemic challenges within the European defence supply chain, with targeted measures aimed at the industrialisation of defence products and the scaling-up of manufacturing capabilities.
For suppliers and sub-contractors, the programme introduces several significant provisions. A key principle of the agreement is an “EU-made content” rule, which will require at least 65% of the components used in funded projects to originate from the European Union or associated countries. This stipulation is intended to ensure that the programme’s funding primarily benefits the Union’s own defence industry, a critical consideration for third-country suppliers seeking to participate in EDIP-funded projects. The programme also places a strong emphasis on supporting small and medium-sized enterprises (SMEs) operating within European defence supply chains, aiming to foster a more robust and diverse industrial ecosystem. In addition to these measures, the agreement formally establishes a Ukraine Support Instrument, which is tasked with modernising Ukraine’s defence industry and fostering partnerships between EU and Ukrainian defence companies.
Furthermore, EDIP will introduce new cooperative frameworks to facilitate multi-state collaboration. These include the establishment of European Defence Projects of Common Interest, which will provide a structure for implementing major defence readiness initiatives. A voluntary Structure for European Armament Programme (SEAP) will also be created to simplify cooperative procurement among Member States, with the potential for VAT exemptions on jointly owned equipment. To mitigate future supply chain disruptions, the programme will implement the first EU Security of Supply Regime, ensuring that Member States have reliable access to critical defence products. Following the formal entry into force of the regulation, the Commission will proceed with programming and financing priorities in line with its strategic roadmap.
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Vicky has worked in media for over 25 years and has a wealth of experience in editing and creating copy for a variety of sectors.
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