At a negotiation meeting on Thursday 3 May, the Council of the EU and the European Parliament continued to disagree over the matter of funding the European defence industrial development programme (€500 million over the 2019-2020 period). The former preferred redeployment based on existing programmes, while the latter called for the use of unallocated margins.
As talks began, funding of the project was an immediate stumbling block to negotiation (see EUROPE 11982). During this third interinstitutional meeting (trialogue), the Council is reported to have submitted a compromise, which involves financing 85% of the budget through redeployment of existing programmes, and 15% by using unallocated margins under the 2014-2020 multiannual financial framework (MFF). The European Parliament, on the other hand, is said to have proposed a budget financed at 75% from unallocated margins and at 25% on the basis of redeployment. No agreement was found during the meeting and both institutions are sticking to their respective positions.
Another bone of contention concerns support for undertakings taking part in consortia controlled by a third state or an entity of a third state. On this point, the Council considers it up to member states to provide the European Commission with proof of guarantee regarding the protection of European security and defence interests, while Parliament calls on the undertakings themselves to prove their compliance with the principles of protecting European interests. The Council is said to be keeping to its stance but would propose making eligibility criteria tougher for undertakings under third state control (or the control of a third state entity). Agreement could be reached on this as Parliament is willing to come a step closer to the Council’s position.
Progress
Headway has been registered on various points. The minimum number of member states that must take part so that a project is eligible for the programme has been set at three. Parliament’s position has therefore been heeded. Nonetheless, a subtle change has been introduced in order to indulge the Council (which was calling for a minimum of two member states), acknowledging the eligibility to the programme of projects comprising three independent undertakings in at least two member states. In addition, Parliament is said to have agreed that 10% of the budget be explicitly attributed to SMEs, with a higher bonus for intermediary undertakings (“midcaps”). When it comes to financial instruments, the Council agreed that these should only be integrated in the next budgetary cycle. With respect to the work programme, Parliament is said to have agreed that it should be conducted by implementing act, in return for greater precision.
The next trialogue meeting will be held on 22 May. (Original version in French by Pascal Hansens).