EU to discuss role of foreign defense companies in defense industry program
Kyiv • UNN
Negotiations on the €1.5 billion EU Defense Industry Program (EDIP) depend on funding for non-European companies. The European Parliament opposes exceptions for arms manufacturers outside the EU, aiming to build up the European defense sector.
Negotiations on the EU's proposed bloc defense industry program (EDIP) between the European Parliament and the Council of the EU will depend mainly on how much money can go to non-European defense companies, Euractiv reports, writes UNN.
Details
Technical negotiations on the program will begin on Thursday after the first round of political discussions between MEPs and representatives of the EU Council earlier this week on the European Commission's proposed €1.5 billion plan to modernize the European defense industry.
Both sides aim to reach a final decision in October, two sources close to the matter said.
European Parliament negotiators object to the abolition of strict eligibility rules for missile and ammunition manufacturers headquartered outside the EU - a concession that several bloc countries insisted on during negotiations before agreeing to support the program.
A compromise text agreed by EU member states two weeks ago will exempt ammunition and missile manufacturers from rules requiring technology sharing with European firms to receive EDIP funding, including so-called "design authorities" that give EU companies the right to modify and redesign products.
The European Parliament strongly opposes any exceptions to the eligibility criteria governing which contractors and subcontractors can participate in EDIP-funded defense projects. MEPs adopted their version of the EDIP text, which does not include such exceptions, two months ago.
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The European Commission presented the plan more than a year ago, but progress has been slow due to long-standing disagreements over how much EDIP money can go to non-EU firms. Some want to use the program to build Europe's defense sector and direct money to firms in bloc countries, while others prioritize acquiring necessary military equipment as quickly and efficiently as possible.
MEPs largely adhere to the first point of view, viewing the program as a long-term roadmap for restoring Europe's industrial defense base and reducing dependence on arms manufacturers in third countries, particularly the United States. Providing access to missile and ammunition manufacturers outside the EU is considered counterproductive.
The European Parliament hopes to receive a much larger amount than the current 1.5 billion euros allocated for the program.
Expanding the program from the proposed 1.5 billion euros should also be one of the main items on the agenda. In March, MEPs proposed a much larger funding package, including an additional 15 billion euros from the 150 billion euro SAFE lending program. This could also be supported by an additional 5 billion euros in SAFE loans for Ukraine's defense industry and purchases from Ukrainian firms, the publication writes.
Denmark, which took over the presidency of the EU Council from Poland earlier this week, is leading the negotiations on behalf of the EU member states. The country, which had the right to opt out of EU defense policy only two years ago, has made this issue one of the main priorities of the presidency.
Technical negotiations will take place on Friday, with three more technical trilogues scheduled by July 18.