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EU Nations Agree on New Joint Defence Funding Programme.

Published On Thu, 19 Jun 2025
Tarin Everhart
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European Union member states have finalized a long-debated agreement on a €1.5 billion ($1.73 billion) defence funding programme aimed at strengthening the bloc’s military capabilities and industrial base. The initiative, called the European Defence Industrial Programme (EDIP), forms part of the EU’s broader strategy to boost security cooperation in response to heightened threats, particularly after Russia’s invasion of Ukraine in 2022. The deal is intended to enhance Europe’s ability to produce its own military equipment and reduce reliance on external suppliers, especially in critical areas like weapons systems, ammunition, and advanced defence technologies.

The agreement follows over a year of negotiations among EU governments, during which sharp divisions emerged regarding the rules of eligibility for funding. France led calls for strict “buy European” provisions to ensure the funds would support EU-based companies and encourage greater self-sufficiency. In contrast, countries like the Netherlands, along with Estonia, Latvia, Lithuania, the Czech Republic, Bulgaria, Romania, Croatia, Slovakia, and Finland, argued for more flexibility. They warned that excessive restrictions would hinder efforts to quickly modernize their armed forces, pointing out that many defence technologies and components are still sourced from allies outside the EU, especially the United States and the United Kingdom.

A compromise was eventually reached under which at least 65% of the value of components in any defence product funded by the programme must be sourced from within the EU or certain associated countries. Some exceptions will be allowed, acknowledging current industrial limitations. Although the group of 10 countries expressed concern that the final rules were still too rigid, they agreed not to block the next steps. In a joint statement, the group reiterated their commitment to strengthening Europe’s security but emphasized that the defence industry remains dependent—particularly in the short and medium term—on critical input from trusted non-EU allies. They stressed the need for a balanced approach that enables both strategic autonomy and operational readiness.

The agreement is expected to be formally approved by EU ambassadors in the coming days, after which negotiations with the European Parliament will begin to finalise the legislation. EU officials noted that while the €1.5 billion budget is relatively modest for the defence sector, the intense debate over procurement rules underscores the programme’s long-term importance. It is widely seen as a foundational step toward deeper EU defence integration and may pave the way for significantly larger investments in the future. The deal signals the EU’s growing determination to respond collectively to security threats and to build a more resilient and independent European defence industry.

Disclaimer: This Image is taken from reuters.