Ahead of the NATO July summit in Brussels next week, MEPs in Strasbourg on Tuesday (July 3) endorsed the creation of a €500 million program aimed at boosting innovation in the European defence industry.

The €500 million strong European Defence Industrial Development Programme (EDIDP) is meant to fund the development phase between research and production of new and upgraded defence products and technologies in the EU – from studies, to design, testing and up to certification and development phases. Projects will encompass, amongst others, further development of drones, satellite communications and cyber security.

The informal agreement reached earlier by the Parliament and the European Council was approved in Strasbourg with 478 votes in favour, 179 against and 23 abstentions.

“Until a few years ago, nobody imagined that we could go so far on defense, proof that the European Union can act quickly and with ambition when there is a real political will,” declared French MEP Françoise Grossetête (EPP), the Parliament’s rapporteur on the file.

“This program represents a historic step for European defence industrial projects and responds to three challenges: budget efficiency, competitiveness and strategic autonomy,” Grossetête concluded.

Europe aims for greater 'strategic autonomy' from US on defence EU leaders pledged in Brussels on Thursday to intensify efforts to strengthen military cooperation within the bloc and reduce its reliance on the United States, amid growing doubts over the continued US involvement in transatlantic security.

The two-year fund is the so-called ‘capacity’ component of the European Defence Fund, which will receive €13 billion in the next multi-annual financial framework (MFF) framework from 2021 to 2027 and which was announced by the Commission in June 2017 as part of plans to increase military cooperation between EU member states and prevent the duplication of funding for the same research in different countries. Around 10% of the total funding will benefit smaller and medium-sized firms, according to the report.

However, the approval of the EDF by member states and Parliament is still pending.

The first projects could expect to receive financial support next year. However, after pressure from MEPs, the condition for funding is that projects will have to involve at least three different companies – not just two as the Commission proposal initially stated – established in at least three different member states.

“The main criterion for selecting projects will be excellence because the EU must remain at the forefront in this sector,” said Grossetête.

Need to enhance EU’s ‘strategic autonomy’

The program, together with the EU’s Permanent Structured Cooperation (PESCO) agreement, comes at a time when the EU is aiming to step up the bloc’s ‘strategic autonomy’ from the US – and could be a first step towards the establishment of a European defence union.

However, in accordance with the June EU summit conclusions, the emphasis lies on enforced EU-NATO cooperation.

“Europe’s recent move on defence cooperation is not in contradiction with NATO. A stronger Europe in defence means ultimately a stronger NATO,” Industry Commissioner Elżbieta Bieńkowska told MEPs.

With the NATO July summit coming up next week, the NATO burden-sharing debate has been heated up by US President Donald Trump’s reluctance to keep funding the Alliance. Only recently he sent sharply worded letters to leaders of several NATO allies, criticising them for spending too little on their own defence, and warning that the US is losing patience with what he said was their ‘failure to meet security obligations shared by the alliance’.

For decades, Washington has been urging its European NATO allies to increase their military budgets. America spends more of its GDP on military than any other NATO member — 3.6% or around $610 billion in 2017. In comparison, combined military spending in Europe was $342 billion in 2017, a decrease of 2.2% compared to 2016.

In return, the EU states use 178 different weapon systems – compared to only 30 in the US. The EDF is designed to better coordinate the development of weapons systems between member states and counteract the fragmentation of Europe’s defence industry. For example, France and Germany have already announced plans to develop a next-generation European fighter jet.

Closing the loopholes

Critics, however, point towards loopholes that the program conditions do not specifically prohibit the development and export of controversial weapons. MEPs postponed a debate on autonomous weapons systems, known colloquially as ‘killer robots’, that are capable of attacking targets without a human choice.

In its first draft, the European Parliament originally adopted an amendment which provided that certain categories of arms should be exempted from funding. It, however, was dropped from the bill after trilogue negotiations with the Commission and member states.