The Romanian Presidency of the Council of the EU and the European Parliament reached a partial political agreement on the European Defence Fund (EDF), proposed in June 2018 (see EUROPE 12040), on the night of Tuesday 19 to Wednesday 20 February.
This agreement, which incorporates the general objectives and structure of the Fund, as proposed by the European Commission, has yet to be formally adopted by the Council and the European Parliament. The budgetary aspects and some horizontal provisions will depend on the agreement on the next multiannual financial framework.
Under this agreement, the Fund will provide support throughout the industrial development cycle, from research to prototype development and, ultimately, certification. The projects financed will be defined primarily in accordance with the defence priorities agreed by the Member States within the framework of the Common Foreign and Security Policy.
These projects must involve the participation of at least three eligible entities from at least three different Member States or associated countries. In this way, the co-legislators succeeded in reaching agreement on the participation of entities from third countries (Article 10 - see EUROPE 12174). The agreed conditions are the same as those decided for the European Defence Industrial Development Programme (EDIDP - see EUROPE 12025).
In principle, only entities established in the EU or in an associated country, controlled by a Member State or a legal entity of a Member State, will be eligible for funding. However, subsidiaries established in the EU of third country companies will exceptionally be eligible for financing under certain conditions. No European funding may be granted to entities established outside the EU, but they may participate in cooperation projects.
The association of third countries with the Fund is one of the horizontal aspects that will be finalised later (Article 5).
The research and design phase may be financed by the EU budget up to 100%. The EU budget may be used to complement Member States' investments in prototype development costs (up to 20%) and related testing, qualification and certification activities (up to 80%). Projects developed within the framework of Permanent Structured Cooperation (PESCO) may, if eligible, benefit from a 10% co-financing bonus, although this is not automatic.
The co-legislators also agreed on ex-ante control of actions by independent experts appointed by the Commission (Article 7 on ethics). This idea was not foreseen in the initial proposal and is close to the European Parliament's position (see EUROPE 12158). The Commission may intervene in the event of any slippage during the project.
Similarly, actions that are not eligible because they are considered unethical have been specified (Article 11). According to one source, much of the discussion focused on autonomous lethal weapons, such as “killer robots”.
In addition, the co-legislators decided that the adoption of the multi-annual work programme would be by implementing act, as proposed by the Commission, whereas the European Parliament wanted a delegated act.
This agreement is being debated in Parliament, because, according to one source, the Conference of Presidents had given the order not to accept any implementing act, in particular because it sets a precedent for future negotiations. The rapporteur of the ECR group was reportedly supported in his approach by the EPP and ALDE groups, while the S&D and Greens/EFA are opposed. (Original version in French by Camille-Cerise Gessant)