European Defence Fund 2021-2027
The European Defence Fund (EDF) is an unprecedented, comprehensive instrument covering funding for the whole defence industrial cycle to support European strategic autonomy. It will launch for the first time within the next Multiannual Financial Framework (MFF) from 2021 to 2027 and will integrate the current Preparatory Action on Defence Research (PADR) and European Defence Industrial Development Programme (EDIDP) programmes that focus on defence research and capability development respectively. Furthermore, the EDF will include the "Financial Toolbox", a set of standardised instruments supporting collaborative procurement projects of the Member States.
Military procurement in Europe faces high levels of inefficiency due to separate national acquisition policies. The armed forces within the Union currently field 178 weapon systems, compared to merely 30 systems in the armed forces of the United States. Joint research and capability development, as well as cooperation in procurement have valid potential to decrease costs and increase efficiency. The EDF’s primary purpose is therefore not only to strengthen the European Defence Technological and Industrial Base (EDTIB), but also to enable Member States to gain better value from their defence spending.
The Fund is being set up to support European industries in being more innovative and competitive, boost cross-border integration within the EU and specifically support SMEs and MidCaps in the defence sector. It therefore complements the Horizon Europe programme (currently Horizon 2020), which is available for the civilian sector with the same purpose. The current proposal for the EDF specifically stresses the utilisation of synergies with Horizon Europe, and the potential funding of dual-use technologies (with civilian and defence implications) by both programmes.
Negotiations on the current European Commission (EC) proposal of 13 June 2018 have started during the Austrian EU Council Presidency and are currently dealt with within a “Friends of the Presidency” group in Brussels. The EC’s proposal for the MFF of 2 May 2018 includes a budget of €13 bn. for the period 2021 to 2027, with €4.1 billion earmarked for research and € 8.9 billion for development. This represents € 500 million for research and € 1 billion for development annually.
Projects can receive up to 100% funding for research and 20% to 80% for the development phase. The current proposal foresees additional funding for those undertakings with relevance to the Permanent Structured Cooperation (PESCO) (+10%) and in the field of disruptive technologies (+5%).