Political Agreement on the European Defence Industry Programme
On 16 October 2025, a significant political consensus was achieved between the European Parliament and the Council regarding the European Defence Industry Programme (EDIP). This initiative is instrumental in facilitating joint procurement and enhancing the industrial capabilities of Europe’s defense sector in alignment with the Defence Readiness Roadmap 2030 and the associated Defence Readiness Flagships.
Statement from Leadership
European Commission President Ursula von der Leyen expressed her approval of the agreement, stating that the €1.5 billion allocated to bolster Europe’s defense industry is vital for supporting Ukraine and ensuring readiness by 2030. She emphasized, “Investing in readiness is investing in peace”, commending the Danish Presidency for successfully advancing this critical initiative.
Key Features of the European Defence Industry Programme
The EDIP, with a budget allocation of €1.5 billion for the period of 2025–2027, is designed to tackle pressing issues affecting Europe’s defense industry, including:
- Industrialization of defense products
- Facilitation of industrial ramp-up
- Support for European supply chains and small- to medium-sized enterprises (SMEs)
- Development of Ukraine’s defense technological and industrial base
EU-Made Content Requirements
A provisional agreement established a crucial principle of “EU-made content,” mandating that a minimum of 65% of components in projects funded under EDIP must originate from the EU or its associated countries. This rule ensures that the primary beneficiaries are the Union’s own defense industry.
Support Mechanisms for Ukraine
Additionally, the co-legislators provisionally endorsed the establishment of a Ukraine Support Instrument, which aims to:
- Modernize Ukraine’s defense sector
- Foster collaborations between EU and Ukrainian defense entities
- Accelerate integration of Ukraine’s defense industry with the European Defence Technological and Industrial Base (EDTIB)
New Collaborative Frameworks
The EDIP incorporates innovative mechanisms, including:
- European Defence Projects of Common Interest: Collaborative frameworks designed to implement the Defence Readiness Flagships.
- Structure for European Armament Programme (SEAP): A voluntary initiative aimed at facilitating cooperative projects among Member States, which may also provide VAT exemptions for jointly owned assets.
- EU Security of Supply Regime: A first-of-its-kind framework intended to guarantee access to essential defense products, enhancing the EU’s capability to respond to future supply chain disruptions.
Next Steps for Implementation
Upon EDIP’s activation, the Commission will initiate programming to finance urgent priorities consistent with the Defence Readiness Roadmap 2030.
Background Context
Initially proposed by the Commission in March 2024, the EDIP is the first all-encompassing EU framework intended to strengthen the European Defence Technological and Industrial Base (EDTIB). It seeks to bridge the divide between urgent emergency interventions, such as the Act in Support of Ammunition Production (ASAP) and the European Defence Industry Reinforcement through Common Procurement Act (EDIRPA), and the EU’s long-term goal of maintaining sustained defense industrial readiness. Additionally, EDIP complements the European Defence Fund.
In March 2025, the Commission put forth the White Paper for European Defence – Readiness 2030 alongside its ReArm Europe Plan/Readiness 2030, which offer a robust defense package designed to empower EU Member States to substantially increase investments in defense capabilities.
The activation of the national escape clause of the Stability and Growth Pact for defense purposes, combined with the Security Action for Europe (SAFE) loan strategy, forms the backbone of the ReArm Europe Plan / Readiness 2030, enabling Member States to significantly expedite their defense investments.
On the same date, the Commission and the High Representative adopted the ‘Preserving Peace – Defence Readiness Roadmap 2030’, laying out a comprehensive strategy to enhance European defense capabilities.
