First green light from the European Parliament for the EDIP defense industry program

Brussels – Today (April 24), the European Parliament’s combined Defense and Industry committees gave the first green light to the EDIP Regulation, the new plan for the European defense industry. Seventy MEPs voted in favor, 46 against, and eight abstained.

The program, which involves financial support from the European Investment Bank (EIB), provides for joint procurement of at least 40 percent of military supplies by 2030, joint procurement and measures to ensure that by the same year, at least 35 percent of the market for the sector is produced in the Union. The plenary vote is scheduled for the Strasbourg session in May.

Other principles that MEPs agreed on to strengthen Europe’s defense capability include:

• Introducing a “buy European” principle by which the EDIP should only fund products where the cost of components originating in the EU or associated countries represents at least 70 percent of the estimated end product value.
• To be eligible for funds, European defense projects of common interest should involve at least six member states or at least four facing high exposure to the risk of conventional military threats; MEPs also want Ukraine to participate.
• A European ‘military sales mechanism’ would work as a centralized catalog of defense products and services to bolster EU-wide demand.
• A new, voluntary structure for the European Armament Program would scale up member states’ cooperation throughout the defense equipment lifecycle.
• An EU security of supply regime should gradually guarantee continuous access to essential defense products to tackle future supply crises; a Defense Industrial Readiness Board would manage the regime.

As part of the new EDIP regulation, MEPs backed a Ukraine Support Instrument (USI) to ensure the Ukrainian defense industry’s modernization and integration within the European Defense Technological and Industrial Base (EDTIB).

“Our position on the EDIP sends a strong message to the Council to finalize its own position in order to start inter-institutional negotiations. The European Parliament will insist on establishing a strong regulation that will incentivize EU member states to boost joint procurement in order to build common European defense capabilities – stronger, strategic, efficient, and united,” said Marie-Agnes Strack Zimmermann (Renew Europe), chair of the Committee on Security and Defense.

On March 5, 2024, the European Commission unveiled the EDIP proposal, with a proposed budget of €1.5 billion, to ensure industrial readiness in the defense sector by bridging the gap between short-term emergency measures, such as the Act in Support of Ammunition Production (ASAP) and the European Defense Industry Reinforcement through Common Procurement Act (EDIRPA), which have been implemented since 2023 and will end in 2025, and a more structural and long-term approach.

The EDTIB comprises a number of large multinational companies, mid-caps, and over 2,000 small and medium-sized enterprises, with an estimated combined annual turnover of 70 billion euros.

 The measure does not sit well with the 5 Star Movement (M5S) delegation to the European Parliament, which, in a statement, condemns it as a “shameful act that facilitates the arms trade within the Union, creating a race to the bottom on regulatory and humanitarian standards.” According to the M5S MEPs, “the main beneficiaries of this program will be the major companies in the defense sector, the companies that Minister Guido Crosetto protected when he was president of the Federation of Italian Defense and Security Companies.” According to the delegation, “what is even more disturbing is the request to convert civilian industrial production lines into military ones, as is already happening in Germany.”

Also opposed was League delegation leader Paolo Borchia, who called the document “an unbalanced proposal, dangerous for the national interest and the budget. We are against a surge in military spending in an economic context where families and businesses await concrete answers. From an initial Commission proposal of 1.5 billion, the Parliament has proposed over 21 billion in EU defense funds without even guaranteeing return for countries like Italy. An irresponsible choice.”