Possible EU Short-Term Initiatives on the EDTIB

In the wake of the Russian aggression against Ukraine, European security faces a paradigm shift, exposing vulnerabilities in the continent's defence industrial base (EDTIB). Decades of fragmentation and underinvestment have left the EDTIB ill-prepared for large-scale conflicts. The urgent need to equip armed forces for the evolving strategic landscape and provide continuous military support demands immediate action.

ASD recommendations

• Speed: Rapid decision-making and implementation are paramount. Administrative processes, from planning to execution, must transition from peacetime to wartime efficiency. Accelerating approval procedures at all levels is crucial for timely production of critical defence items.
• Prioritisation: Coordinated EU-level prioritisation for defence companies during crises is essential to avoid allocation conflicts. Establishing a European Defence Priorities and Allocations System ensures fair competition, security of supply, and competitiveness against non-EU entities.
• Access to finance: Ensuring financial support, particularly for mid-caps and SMEs, is vital for production ramp-up. National promotion banks should facilitate access, and advocating for changes in the European Investment Bank's lending policy is crucial.
• Looking ahead: Early assessment and decision-making on a comprehensive approach for various defence equipment are vital. Visibility on acquisition plans is essential to reduce production lead times amidst uncertainties.
• Planning and programming: Improved coordination between EU instruments, NATO, and Member States' planning processes is needed. The swift implementation of the proposed joint defence planning, programming, and procurement function can guide the European Defence Investment Programme (EDIP).
• EDIP: Urgent launch of an EDIP pilot, complementing the ammunition instrument, is recommended to support joint procurement and enhance industrial preparedness.
• MFF mid-term review: To ensure enduring investment in military capabilities, a substantial increase in the MFF budget line for security and defence is crucial. Enhancing the European Defence Fund (EDF) budget is essential, aligning it with the initially proposed €13 bn, and mobilising additional resources for EDIP or its pilot.