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The European Union has rolled out its first-ever Defense Industrial Strategy (EDIS), with the aim of increasing the “competitiveness” and “readiness” of the European Defense Industrial and Technology Base (EDTIB). This strategy, the first document entirely devoted to the defense industry, is a set of strategies to streamline and encourage the joint efforts of European Union member states in defense and to raise the profile of the European Union as a reliable nation. and the latest on the agenda. Security and defense player. These efforts, which have produced some instruments and tools, have often proven useful, but are not transformative for European defence.
This new, non-binding strategy comes at a time of unpredictability for the continent, including Russia’s war of aggression in Ukraine and growing doubts about the sustainability of US commitment to European security. It signals a leap forward in the European Union’s ambitions to However, questions remain as to whether this strategy will lead to concrete actions. After all, the strategy currently has little funding and faces skepticism from NATO and some member states, which ultimately maintain sovereignty over national defense and procurement decisions. To ensure that this strategy does not follow the fate of other EU defense initiatives that have failed to deliver in the past, it will need to trigger significant follow-on actions, especially funding.
Nevertheless, as the European Union’s strong response to the Ukraine war shows, there may be more to the new strategy than meets the eye. And perhaps more importantly, with growing concerns about a future isolationist regime in Washington and a dysfunctional NATO, the European Union’s efforts will ensure that transatlantic security responsibilities are shared equitably with Europeans. This may be the best opportunity to take on the role. If implemented and funded, this strategy would cause U.S. defense companies to lose some market share in Europe, but it would strengthen Europe’s defense production capabilities and improve Europe’s joint operational capabilities. likely to benefit the alliance.
Q1: What does EDIS include and how important is it?
A1: The basis of this strategy is for Europeans to spend “more, better, together and European”. The EU institutions therefore acknowledge that the increases in defense spending seen since the start of the war in Ukraine will not be sufficient without addressing the structural problems of capability gaps, fragmentation and dependence on non-EU providers of key enablers. (78% of purchases since February 2022, 80% of which are from the US).
This document sets ambitious goals. By 2030, Member States are expected to allocate half of their procurement budgets to purchases from EDTIB and procure at least 40 per cent of equipment together (up from 18 per cent today), increasing value ‘intra-EU’. ing. ‘Defense trade’ amounts to his 35% of the total EU defense market.
To achieve these goals, this ambition is underpinned by a series of measures and initiatives.
First, a new European Defense Industries Program (EDIP) is proposed, with €1.5 billion ($1.6 billion) from the EU budget for the period 2025 to 2027, to encourage joint production of weapons and cooperation between manufacturers. are doing.
Second, EDIS will also create a new institutional ecosystem to foster and promote cooperation among member states. This includes the launch of a Defense Industry Preparation Board bringing together Member States, the High Representative/Head of the European Defense Agency and the European Commission, and the launch of a high-level European Defense Industry Group to work with defense industry on sector-specific issues. is included.
Thirdly, the strategy also aims to establish the European Arms Programming Architecture (SEAP), a legal framework through which joint procurement and joint ownership member states can be entitled to VAT exemptions or bonuses. In terms of “preparedness”, EDIS plans to fund “room-temperature facilities” to maintain production during off-season periods.
Fourth, aim to strengthen Europe’s defense export capabilities and global competitiveness. The bold and potentially far-reaching proposal calls for a European military sales mechanism that in some ways mimics the U.S. Foreign Military Sales (FMS) program. The European Union will aim to create a clearer catalog of products offered by the EU’s defense industry, and will seek to secure the ability to sell “off-the-shelf” equipment by leveraging funds to expand production and stockpile equipment. . If implemented, this could pave the way for the European Union to potentially become an arms exporter itself, with the European Union developing its own arms export policy together with its member states.
Q2: How does EDIS balance the need to support Ukraine and its own defense and technology industrial base?
A2: The strategy initially targets EU member states. This clearly signals the need for Europeans to be able to withstand Russian aggression, but does not define clear criteria for EU military assistance to Ukraine. What EDIS is doing is to connect Ukraine as closely as possible to her EU initiatives and projects.
EDIS mentions Ukraine 54 times and promotes the participation of Ukrainian industry in European Union defense industry programs, including joint procurement programs and the launch of the EU-Ukraine Defense Industry Forum. EDIS also wants to emphasize that Member States have much to learn from Ukraine’s combat experience, which is one of the reasons for establishing the EU Defense Innovation Office in Kyiv.
Q3: How will the new strategy affect relations with NATO and non-EU partners?
A3: As is usual with EU initiatives, EDIS has been heavily criticized by non-EU countries, including the United States, Europe’s main supplier of military equipment, who recognize the risk of duplication through NATO and are wary of the impact on their own industries. It was scrutinized.
Section 6 of the EDIS highlights the role that partnerships play in strengthening Europe’s preparedness and resilience to meet the challenges posed by the internationalization of supply chains. Given the instability of the current supply chain environment, EU cooperation with “strategic partners, international organizations and like-minded third countries” could support EU efforts to improve defense industry readiness. can. Although little attention has been paid to who these countries are, the EU recognizes that it cannot strengthen the continent’s security without them.
Relations between the EU and NATO have always been tense, but EDIS seeks to emphasize complementarity over competition. The strategy makes clear that NATO sets standards for weapons. However, when European member states procure weapons, each asserts its own national requirements for those procurements. This means that even when a European buys and operates the same general system, such as his Leopard tank, each has a different, bespoke variation. While that sometimes makes sense, it limits economies of scale, complicates NATO logistics, and makes it difficult for European forces to deploy and fight together.
EDIS aims to strengthen European security by leveraging the European Union’s united economic toolkit and builds on the European Union’s strengths in acting as a collective economic power, as well as NATO and non-EU partners. It is not intended to show its own advantages. Indeed, during the rollout of EDIS, EU officials frequently referred to the “single force” principle, according to which capabilities developed by NATO and EU member states would be available to both organizations. Become.
Although EDIS shows hope for improving EU-NATO relations, this strategy ignores the UK, a very important stakeholder in European security. Whether this strategy would have been accepted by London if it had remained in the European Union is another question. But the failure of the strategy, which refers to Europe’s second-largest defense spender with a powerful military, raises further questions about the future scope of EU-UK relations in the defense sector. Nevertheless, the UK is a significant and important part of Europe’s defense industrial base, and EU-UK defense industrial cooperation is likely to be a key area of engagement for the next UK government and the European Commission.
Q4: Where will the funding come from?
A4: The high ambitions of this strategy are hardly reflected in the mere €1.5 billion proposed by the European Commission to invest in defense industry preparedness through EDIP, which is reflected in the European Internal Market Commissioner Thierry Breton of the European Commission. It is also a far cry from the 100 billion euro dedicated fund he touts. Brock’s de facto Secretary of Defense. Rather, the committee is calling for an ambitious dedicated budget allocation under the next long-term budget starting in 2028. EDIS also suggests a “joint” use of billions of dollars a year in profits from Russian state-owned assets frozen under sanctions. Purchase military equipment for Ukraine. ”
Some EU member states are pushing for a more proactive approach. France, Poland and Estonia have called on Brussels to mobilize “adequate” funding for defense programs, suggesting an approach similar to the bloc’s pandemic recovery fund, which issued joint bonds. Another group of frugal northern countries also has concerns about the idea, with countries such as Germany and the Netherlands opposing new bond issuance. The Commission is also urging the European Investment Bank (EIB) to change its lending policy to allow funding for defense projects, although currently the list of activities the bank can finance does not explicitly include are excluded. Some governments are concerned that funding for defense projects could negatively impact the EIB’s top rating and fail to address the core issue of a continued lack of long-term contracts. The idea potentially has wider support than new bond issues, but changes to banks’ lending powers would still require support from a majority of EU member states.
Q5: How does EDIS fit into the European Union’s growing defense policy mix?
A5: European leaders are moving quickly and urgently to strengthen existing EU defense initiatives and establish new mechanisms to deal with the surge in demand for military kit. For example, the European Peace Facility (EPF) has evolved from a conflict prevention tool to a de facto security assistance fund. Since Russia began its full-scale invasion, the EPF has been used to reimburse EU member states for kit donations to Kiev, facilitating reimbursements totaling €5.6 billion to date. Three ammunition plans were also created to facilitate deliveries to Ukraine from existing stockpiles, encourage joint procurement from industry and expand production in Europe. Josep Borrell, the EU’s High Representative for Foreign Affairs and Security Policy, acknowledged that the initial goal of shipping one million shells to Ukraine in 12 months would not be achieved, but European production was rapidly accelerating. There is. Breton said in January that the EU’s ammunition production capacity should reach 1.4 million rounds in 2024, rising to 2 million in 2025.
EDIS under Track 3 of the Ammunition Program, the Ammunition Production Support Act (2025), the Strengthening the European Defense Industry through Common Procurement Act (2025) and the European Defense Fund (2027) can maintain European Union support for EDTIB. We aim to create long-term, more structured tools. The European Union’s next long-term budget negotiations are unlikely to ensure sufficient funding for new instruments to realize the strategy’s high goals, as the prospects for new debt issuance are highly uncertain given strong member states’ opposition. This will be closely monitored to ensure availability.
Max Bergman is director of the Europe, Russia, and Eurasia Program at the Center for Strategic and International Studies (CSIS) in Washington, DC. Mathieu Drouin is a visiting scholar in the Europe, Russia, and Eurasia Program at CSIS. Sissy Martinez is a program manager and research assistant for CSIS’s Europe, Russia, and Eurasia Program. Otto Svendsen is a research fellow in the Europe, Russia, and Eurasia Program at CSIS.
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