The European Court of Auditors has raised concerns about the European Defence Industry Programme (EDIP), calling for a more robust design and realistic targets. The €1.5 billion programme lacks sufficient budget to achieve its objectives and may end up spreading finances thinly across various projects with no measurable impact. The EU auditors recommend setting realistic targets by the end of 2027 and developing a long-term funding strategy to enhance defence capabilities in the next seven-year spending programme starting in 2028. The industry itself has expressed similar concerns, emphasizing the need for EU financial support to be targeted at the domestic sector and calling for emergency provisions that can be activated during a crisis.
The European Commission proposed the EDIP as a stopgap measure after Russia’s invasion of Ukraine, aiming to increase the EU’s defence capacity. Commission President Ursula von der Leyen appointed Lithuania’s Andrius Kubilius as the EU seeks to meet the Russian threat. However, the auditors stress the importance of finding the right balance between policy objectives, budget, and timeline. They also recommend a long-term funding strategy to support defence capabilities beyond the lifespan of the proposed regulation. The industry advocates for funding restrictions on products with at least 65% EU content, with some pushing for a higher percentage. They see this as a starting point for future collaboration, allowing member states to procure from non-EU suppliers or work with like-minded European partners outside the EU-funded instrument.
The industry’s position paper emphasizes the need for a short-term plan that can lead to a more ambitious programme post-2028. They propose an emergency section that can be activated during a crisis, with fast-track administrative procedures and shorter timelines. While some European defence companies support the EU’s financial support for the domestic sector, others believe the focus should be on increasing EU content in products. The discussion among EU ambassadors on the EDIP, which was initially scheduled for October 2, has been postponed, and a new date has yet to be determined. The industry views the 65% EU content requirement as a starting point and hopes for further collaboration with non-EU partners like the UK outside the framework of the EU-funded instrument.
In response to the European Court of Auditors’ concerns, the EU Commission may need to reassess the EDIP’s policy design, budget allocation, and timeline to ensure its effectiveness. The auditors emphasize the importance of setting realistic targets by the end of 2027 and developing a long-term funding strategy to enhance defence capabilities beyond the proposed programme. The industry supports the need for a more ambitious programme post-2028, with emergency provisions to be activated during crises. While some European defence companies advocate for financial support targeting the domestic sector, others prioritize increasing EU content in products to promote European defense capabilities. The discussion among EU ambassadors on the EDIP has been delayed, indicating ongoing deliberations on eligibility criteria for funding and industry concerns regarding the programme’s implementation.
