EU to reinforce the European defence industry through common procurement with a €500 million instrument

The Commission has adopted a proposal for a Regulation by the European Parliament and the Council establishing the European Defence Industry Reinforcement through common Procurement Act (EDIRPA) for 2022-2024.

As announced in the Joint communication on the Defence Investment Gaps in May, the Commission is delivering on its commitment to set up a Short-Term EU Instrument reinforcing European defence industrial capacities through common procurement by EU Member States. The Instrument, responding to the European Council’s request, aims to address the most urgent and critical needs for defence products, resulting from Russia’s aggression against Ukraine. The Commission proposes to commit €500 million of EU budget from 2022 to 2024. The Instrument will incentivise Member States, in a spirit of solidarity, to commonly procure and will facilitate access for all Member States to urgently needed defence products.

What is the EU Strategic Compass?

It will avoid competition among Member States for the same products and facilitate cost savings. It will strengthen interoperability and allow the European Defence Technological and Industrial Base (EDTIB) to better adjust and ramp-up its manufacturing capacities to deliver the needed products. The Instrument will support actions from consortia composed of at least three Member States. Eligible actions can involve new defence procurement projects or the extension of those launched since the start of the war.

Objectives of the Instrument

In particular, the Instrument will:

• Foster Member States cooperation in defence procurement. This contributes to solidarity, interoperability and efficiency of public spending; prevents crowding-out (impossibility for Member States to satisfy their demand of defence products because of a demand peak); and avoids fragmentation.
• Boost the competitiveness and efficiency of the European Defence Technological and Industrial Base, in particular by speeding up the adjustment of industry to structural changes, including ramp-up of its manufacturing capacities, resulting from the new security environment following Russia’s aggression in Ukraine.

Eligible actions for support

The Instrument will support actions complying with the following conditions:

• Consortium of at least three Member States;
• The expansion of existing or new cooperation for common procurement of the most urgent and critical defence products;
• Procurement procedures reflecting the involvement of the EDTIB.

The Instrument will take into account the work of the Defence Joint Procurement Task Force established by the Commission, and the High Representative/ Head of the European Defence Agency. The Task Force facilitates coordination of Member States’ very short-term procurement needs and engages with Member States and EU defence manufacturers to support joint procurement to replenish stocks.

Defence and security of the European Union

Next Steps

Responding to the urgency of the situation, within six weeks of receiving the task from the European Council, the Commission has adopted the proposal for a Regulation as a matter of high priority and will transmit it to the co-legislators. The Commission counts on a swift adoption in order to be able, by the end of 2022, to support Member States addressing their most urgent and critical defence product needs in a cooperative manner.

In addition, the Commission will propose a European Defence Investment Programme (EDIP) regulation, which will serve as the anchor for future joint development and procurement projects of high common interest to the security of the Member States and the Union.

More information: Press release – European Commission