The European Commission is working on new economic incentives to support member states’ willingness to cooperate regarding national and collective European Union (EU) security through the European Defence Action Plan.

The European Commission (the EU’s executive body) considers the creation of a real European defence industrial base an important step forward in EU defence cooperation. To date some measures already exist such as value-added tax exemption for European Defence Agency programmes, the legal provisions to ease defence and security procurement across the EU and the intra-EU transfer of defence related products.

The European Commission is currently working on new measures, such as the European Defence Fund which will support joint national investments in defence equipment and technology research and development. The fund will include two ‘windows’: the ‘research window’ covering innovative technologies, and a ‘capability window’ covering the joint purchase of materiel.

An EU source confirmed to armadainternational.com that the Commission’s proposals for the capability window includes the co-financing of collaborative projects involving three or more EU members from 2019. In addition, the source confirmed that a $28 million allocation for the research window had already been included in the 2017 EU budget. According to the EU Commission website, this fund could grow up to $101 million by 2020. Funds are expected to reach $561 million per year in the 2021-2027 Multi-annual Financial Framework (the document which lays down the maximum annual amounts the EU may spend in specific policy areas). The 2017 allocation for the research window will fund the first phase of the Preparatory Action on Defence Research, a three-year project to be developed under the European Defence Agency administration.

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