On Wednesday 21 November, MEPs of the European Parliament's Committee on Industry, Research and Energy (ITRE) adopted by a relative majority (35 votes in favour, 14 abstentions and 11 against) the report by the Polish MEP Zdzisław Krasnodębski (ECR) on the regulation establishing the European Defence Fund after 2020, which has the particular feature of strengthening the eligibility conditions for companies with a link with a third country.
On the provisions on eligible entities (Article 10), MEPs recommend banning any company or organisation whose management structure is controlled by a third country subject to restrictive measures by the European Union.
The rapporteur's nationality is no stranger to this addition, according to some Parliament observers, as the provision in question concerns Russia in particular. In addition, MEPs introduced an additional criterion to support the EU's technological and industrial autonomy.
The other important point - and particularly so - concerns the ethical issues of the actions financed by the Fund (Article 7).
There were two opposing blocs: the EPP, ECR and ALDE groups only wanted ex ante control of the ethical aspects, while the S&D and Greens/EFA groups wanted ex ante control and the possibility for Parliament to block actions that would be considered unethical, even after their launch. The compromise amendment of the EPP, ECR and ALDE finally won. Therefore, the S&D delegation largely abstained on the final vote on the report.
The addition of a bonus is foreseen for any project that includes cross-border cooperation between mid caps. Article 16 on indirect costs (mainly related to subcontracting) has also been amended to allow companies to exceed the 25% ceiling within the total direct eligible costs.
Germany may not like this amendment, a European source told us. During the negotiations in the Council, the German position on this issue had been very harsh (see EUROPE 12141).
Maintain the budget as it stands. It should be noted that the budget of the fund for the period 2021-2027 has not been modified. The €11.453 billion package has only been converted into constant 2018 prices by MEPs (compared to €13 billion in current prices in the European Commission's proposal).
MEPs agreed that at least 5 to 10% of the budget allocated should be dedicated to disruptive technologies, where the Commission proposed to allocate up to 5% of the total budget.
Like the Space Programme Regulation (see other news), the Regulation on the European Defence Fund and the rapporteur's negotiating mandate will be put to the vote at the December or January plenary session.
Article 7 on ethical issues will then probably be a possible battleground between the different groups of Parliament. (Original version in French by Pascal Hansens)