Europe moves towards integrated defence market

Negotiators from the European Parliament and member states have agreed on creating a temporary fund to encourage EU countries to increase the procurement of arms and other military equipment through joint tenders.

"This is a giant step towards a more integrated defence market," the European Commission said on Wednesday. The Commission proposed the creation of the European Defence Industry Reinforcement through Common Procurement Act (EDIRPA) fund last year at the request of European leaders. It has since committed to strengthening Europe's defence capabilities after the Russian invasion of Ukraine.

Through joint projects, it wants to work together more closely, increase investments in fortification and support the European defence and tech industry. It should enable the formation of a genuine defence union.

To be entitled to financial support from the new fund, at least three member states must buy military equipment through a joint tender. Contractors, subcontractors and the actual defence products must have a clear link with Europe or be established there. Under no circumstances can parts be bought in countries where the EU does not maintain good relations.

The fund will have a budget of 300 million euros - the Commission had initially proposed 500 million initially - and will remain active until the end of 2025. Joint procurement by groups of member states can be reimbursed up to 20 per cent through the fund.

"EDIRPA is crucial for our immediate aid to Ukraine and for replenishing Member States' (military) stocks," said European Commissioner for the Internal Market Thierry Breton. The fund is meant to work with the European Peace Facility, which is also used for supplying military equipment to Ukraine, and the law that supports European industry in producing its own weapons and ammunition. Negotiations on that law are still ongoing.



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