Negotiators from the Council of the European Union and the European Parliament reached agreement in the evening of Tuesday 27 June on the instrument to strengthen the European defence industry through common procurement (EDIRPA).
The instrument will have a budget of €300 million until 31 December 2025. Although the European Parliament had wanted to increase the amount set out in the Commission’s initial proposal from €500 million to €1 billion (see EUROPE 13169/21), the instrument was subsequently cut by €240 million so that this money could be used for the Act in Support of Ammunition Production (ASAP) (see EUROPE 13174/1).
EDIRPA is designed to provide partial reimbursement, via European funds, to Member States that pool their demand and make joint purchases of defence products within consortia of at least three countries. The EU will contribute 20% of the estimated value of the joint procurement for each consortium.
During the negotiations, the European Parliament obtained that Member States engaging in a common procurement procedure could also agree to purchase defence products with Ukraine and Moldova.
The agreement reached in the interinstitutional negotiations (trilogue) lays down a number of clear conditions for the eligibility of contractors, subcontractors and defence products, as well as the conditions with which projects must comply in order to receive funding.
In principle, contractors participating in the common market will have to be established in the EU or in an associated country (Iceland, Liechtenstein or Norway) and have their executive management structures based there. They must not be controlled by a non-associated third country. Under no circumstances will EDIRPA funds be able to be used to source components from countries that do not respect good neighbourly relations.
In addition, by default, contractors will have to use facilities and resources located in the EU or in an associated third country. The use of non-European facilities will only be authorised when an EU producer does not have appropriate infrastructures on EU territory.
Lastly, Member States will only be able to acquire products that are not subject to any restrictions from a non-associated third country limiting their ability to use them. This rule will not apply to urgent and critical defence products, provided that they have been used before 24 February 2022 in the majority of the consortium and that the consortium members undertake to study the feasibility of replacing these restricted components with unrestricted components of European origin.
In addition, an absolute cap of 15% will ensure that the funds available are distributed equally between Member States and between funding priorities.
The Swedish Presidency of the EU Council, the European Commission and the European Parliament rapporteurs welcomed the agreement. “Thanks to the joint acquisition of defence equipment, the competitiveness and effectiveness of the European defence industrial and technological base will be strengthened, and EU Member States will be able to replenish their stocks depleted by donations to Ukraine more effectively”, said Swedish Defence Minister Pål Jonson.
For European Parliament rapporteur Michael Gahler (EPP, German), “the agreement on EDIRPA, despite its rather small budget, marks an important step towards a real Common Security and Defence Policy of the EU”. The other rapporteur, Zdzisław Krasnodębski (ECR, Polish), felt that the compromise found was “reasonable”.
The agreement reached during these interinstitutional negotiations must now be approved by the EU Council and Parliament. (Original version in French by Camille-Cerise Gessant)