Estonia, France, Poland call for more cash for the defence industry
Estonia, France and Poland have asked the European Commission and other EU member states to pledge larger sums to Europe’s defence industry as the EU executive is set to propose a re-industrialisation strategy for the sector.
The European Defence Industry Strategy (EDIS) “should be backed by adequate funding, and for that, we call upon the Commission to present concrete funding options, especially for the period leading up to the next MFF”, such as the EU’s seven-year budget 2028-2035, a non-paper, seen by Euractiv, states.
“Inadequate funding now will only mean higher expenditure at a later date,” the three countries say.
The request comes as the European Commission is unveiling a defence strategy (EDIS) and a regulation under the name of the European Defence Investment Programme (EDIP) on Tuesday (5 March) in a move to boost cooperation in defence procurement and production on the continent.
The programme to be proposed for negotiations is expected to have a €1.5 billion financial envelope attached to it until 2028, while Internal Market Commissioner Thierry Breton said earlier this year the bloc needed €100 billion to bring the industry production capacity to war-time pace and match EU countries and Ukraine’s needs.
“Making even on the decades of underinvestment and rearming our armed forces to meet national, NATO and EU demands require far more ambitious efforts [than ASAP and EDIRPA]”, two EU funds that aimed at ramping up ammunition production in Europe and boosting joint procurement, Tallinn, Paris and Warsaw write.
France and Estonia have led the call for the EU to issue bonds to fund the weapons production industry, the same way the Commission did to finance the EU post-pandemic €800 billion fund.
The European Commission also passed contracts to guarantee the provision of doses for all citizens, as it did with gas storage following the Ukraine war and sanctions on Russia.
“We have invested hundreds of billions into an ambitious NextGenerationEU recovery plan to help repair the damage brought about by the pandemic and taken strong action to mitigate the recent energy crisis,” the three countries write.
“While defence products present an inherently different set of challenges, the risks of a defence industry ill-equipped to meet the demand”, they continue, showing Poland could be backing the idea.
The three capitals, in their proposition, add that EU funds will not be enough. At the same time, they warn that all countries will have to increase national defence spending.
A “better access of the EU industry to public and private financing, as well as to European Investment Bank (EIB) funding, could significantly improve the effectiveness of defence spending,” they add on top of the mounting pressure on the EU’s multibillion lending arm to change its lending policy to funding production and equipment.
“We are in a race against time,” they add.
“Experts and intelligence services warn that Russia will reconstitute its forces sooner rather than later.”
Not only for joint procurement
While the European Commission’s proposal, seen by Euractiv, focuses largely on joint procurement as a way to give the industry perspective on offers and increase production capacity and output, Paris, Tallinn, and Warsaw say EU funds should also benefit national procurement for urgently needed stocks when manufactured on the continent.
“While cooperation should be encouraged, the Union should also consider supporting Member States’ national efforts to procure battle-decisive munitions, air and missile defence systems and critical capabilities from the European Industry, taking into account existing supply chains, to reinforce the readiness of our armed forces,” they write.
On top of that, they say, the EU could also “mobilise funding for defence infrastructure projects and common goods that are difficult for member states to develop alone”, such as air and missile defence and deep-sea reconnaissance capabilities.
Read more with Euractiv
