EC launches € 5.5 bn European Defence Fund
The European Commission launched the European Defence Fund on 7 June 2017. The creation of the Fund had been announced by EC President Juncker in his State of the Union address in September 2016. On 30 November 2016, the Commission had thus presented the European Defence Action Plan. The initiative was welcomed by EU leaders during the European Council meetings in December 2016 and March 2017, and the Commission was given a mandate to present the proposals it has now presented. The Fund is intended to coordinate, supplement and amplify national investments in defence research, in the development of prototypes and in the acquisition of defence equipment and technology.
The European Defence Fund has a research strand, and a development and acquisition strand. With regard to research, starting in 2017, the EU will for the first time offer grants for collaborative research in innovative defence technologies and products, fully and directly funded from the EU budget (so far, more than 90% of research and technology in the field of defence and security are run on a national basis). Projects eligible for EU funding will focus on priority areas previously agreed by Member States, and could typically include electronics, metamaterials, encrypted software or robotics.
Under this so-called "research window" of the Fund, a two-step approach is being pursued. Under the current Multiannual Financial Framework, which runs until the end of 2019, €25 million have been allocated for 2017, and a total of €90 million will be provided until end of 2019. A call for proposals was also launched on 7 June 2017, for projects in the areas of unmanned systems in a naval environment and soldiers systems. The signature of the first grant agreements is expected by the end of this year. For the next budgetary cycle after 2020, the EC will propose a dedicated EU defence research programme in 2018, building on the experience of the preparatory phase, with an estimated annual budget of €500 million.
The Commission, in close cooperation with Member States experts and with input from the European Defence Agency, will establish annual work programmes. The European Defence Agency (EDA) will be responsible for implementing the annual work programmes by publishing the calls for proposals, organising the evaluation of project proposals, and managing the research projects selected to receive EU funding.
With regard to development and acquisition, the Fund will create incentives for Member States to cooperate on joint development and the acquisition of defence equipment and technology through co-financing from the EU budget and practical support from the Commission. Member States may for example jointly invest in developing drone technology or satellite communication, or bulk buy helicopters to reduce costs. Only collaborative projects will be eligible, and a proportion of the overall budget will be earmarked for projects involving cross-border participation of SMEs.
The EC's initiative for a European Defence Fund consists of a Communication and a proposal for a European Defence Industrial Development Programme (EDIDP) Regulation. If the Regulation is adopted by the European Parliament and the Council early in 2018, the Development Programme will be operational in early 2019.
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