In the evening of Tuesday 22 May, the Council and European Parliament reached provisional political agreement on the European Defence Industrial Development Programme (EDIDP) for 2019-2020, its financing and the managing of companies taking part in financed activities.
Among the issues that came in for bitter debate in the last trialogue negotiating meeting were the details of €500 million worth of financing for the programme: 60% of which will be fuelled by redeploying existing programmes and 40% of which will come from unallocated margins from the 2014-2020 Multiannual Financial Framework (MFF). The Council wanted 100% financing of the programme to come from budget redeployment. Parliament wanted financing to come exclusively from unallocated margins over and above the MFF caps.
Another source of discord was Article 7 on eligible bodies, such as those from or owned by a non-EU country. Here, the Council is reported to have won out and it will be for the member states to provide guaranteed directly to the European Commission.
But the European Parliament reintroduced details about the guarantees to be provided. For example, the member states will have to prove that companies are not forced by non-EU countries to participate in the programme and share their know-how and access to its infrastructure. Moreover, the member states will have to demonstrate to the Commission that they are protecting sensitive information.
Still in connection with Article 7, the definition of eligible subcontractors has been clarified. In addition to first tier subcontracting companies (those directly in contact with the company benefiting from the programme), companies that receive at least 10% of the financed activity’s budget and companies contributing classified information to a subcontracted activity as stated in Commission decision 2015/444 will now be eligible.
The way the programme is to be managed was a matter of division – the European Commission and European Parliament recommending direct management by the commission, but the Council tending to favour indirect management by the European Defence Agency (EDA).
In the end, both modes of management were kept in the final agreement to satisfy the Council, but the Commission and Parliament adopted a short declaration to favour direct management for 2019 and 2020.
SMEs. More generally, 10% of the programme’s entire budget should be explicitly allocated to SMEs, with a bonus for SMEs and midcaps of up to 35% of the activity. The two co-legislating institutions agreed to not include use of financial instruments (see EUROPE 12024).
The provisional agreement now needs to be endorsed by member states’ sherpas at a COREPER meeting on Tuesday 29 May. We understand that on Wednesday, the ‘Friends of the Presidency’ sent positive signals. In Parliament, the provisional agreement will be put to a vote by the industry, research and energy committee on 18 June and the vote in plenary will take place in September, after the summer break. (Original version in French by Pascal Hansens)