Council agrees position to incentivise defence-related investments in the EU budget

Member states’ representatives approved yesterday the Council’s position on a proposal aiming to incentivise defence-related investments in the EU budget to implement the so-called ReArm Europe plan, an EU initiative to increase defence spending and strengthen the EU’s military capabilities.

With a view to facilitating faster, more flexible and coordinated investments in the European defence technological and industrial base (EDTIB), the Council’s position seeks to amend five EU regulations:

• the Digital Europe Programme
• Horizon Europe
• the European Defence Fund
• the Connecting Europe Facility, and
• the Strategic Technologies for Europe Platform (STEP)

Main amendments introduced by the Council

Member states have broadly maintained the general thrust of the Commission proposal for the five programmes concerned. However, the Council’s position added the adaptation of the eligibility rules for activities with dual-use and defence applications under Horizon Europe to ensure consistency with other EU instruments in the defence industry sector.

Next steps

Following yesterday’s approval of the Council’s mandate, the presidency will start negotiations with the European Parliament to reach an agreement before year’s end.

Background

This initiative complements the so-called defence readiness omnibus package presented in June 2025 by the Commission and currently being examined by the Council. Both proposals aim to incentivise defence-related investments and improve Europe’s defence readiness, as requested by the European Council in March 2025.

More information: Council of the EU