EU reaches deal on new defense funding program

The European Union's drive to rearm and modernize its military took a step forward this week with the bloc's 27 member nations agreeing to establish a 1.5-billion-euro ($1.73-billion) defense fund.

The European Defense Industrial Program, or EDIP, was suggested by the bloc's legislative arm, the European Commission, more than a year ago but member nations have since wrangled over how it should be funded and administered.

The fund, which is part of a wider drive to improve the EU's preparedness that began soon after the outbreak of the Russia-Ukraine conflict in 2022, calls for at least 65 percent of the costs of the components of a purchased item to have originated in the EU. Some military hardware can also still be purchased from other major producers, including the United States and the United Kingdom.

Ambassadors supported the EDIP in principle this week and will formally sign off on it on Monday, Reuters reported. Lawmakers will then discuss the EDIP in detail in the European Parliament.

Ten countries, Bulgaria, Croatia, the Czech Republic, Estonia, Finland, Latvia, Lithuania, the Netherlands, Romania and Slovakia, issued a statement saying they want the bloc's rearmament to happen faster, and that it should purchase more hardware from nations that are not member countries.

"We fully support the goal of enhancing European security and resilience through increased defense cooperation and investment," the statement said. "However, we face an urgent threat to European territory and interests."

The 10 nations said EU producers cannot yet make the weaponry that is needed, and that the bloc "still depends, especially in the short to medium term, on critical components, technologies, and know-how from like-minded third countries, in particular trans-Atlantic allies".

The Euractiv news website said the nations will not derail the adoption of the EDIP but want its "limited flexibility" to be relaxed, so that other advanced weapon makers can participate.

They are understood to be especially interested in ensuring the EU continues to maintain strong connections with the US defense industry, and that the bloc does not try to stand alone before it is able to.

The European Commission said this week it wants to see a range of new rules in place to simplify joint defense procurement.

"The only way to ensure European peace is to make sure we are ready to defend ourselves credibly and quickly," Defense Commissioner Andrius Kubilius told reporters.

In a communique, the commission added that "for the first time in a generation, the risk of large-scale conventional attack in Europe has reentered the strategic calculus "and that "this mandates a shift to a defense-readiness mindset and the immediate ramp-up of efforts to reestablish defense readiness and deterrence by 2030".

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