The European Parliament has approved a regulation to strengthen Europe’s defence industrial base, encourage joint procurement and increase support for Ukraine. The measure, informally agreed with the Council, creates the first EU-level programme for the defence industry, the European Defence Industry Programme (EDIP), aimed at boosting Europe’s industrial and technological capacity and upgrading the bloc’s defence readiness.
Funding and structure
EDIP sets a budget of €1.5 billion, of which €300 million will go to a Ukraine Support Instrument to modernise Ukraine’s defence sector and facilitate its integration with Europe’s. Parliament and Council also agreed to establish the FAST facility, a fund to accelerate the transformation of defence supply chains, with an indicative envelope of at least €150 million from additional contributions.
During negotiations, MEPs secured flexibility to top up EDIP using resources from the Security Action for Europe (SAFE) instrument. The programme also allows member states to reallocate unspent Recovery and Resilience Facility funds into EDIP projects.
European-made equipment priority
To qualify for EU financing, defence equipment must be primarily European-made. The regulation limits non-associated third-country components to no more than 35% of a product’s estimated total cost.
EDIP will also create a legal framework for European defence projects of common interest. Each project must involve at least four member states, with Ukraine eligible to participate as a partner.
Political reactions
Marie-Agnes Strack-Zimmermann, chair of Parliament’s Security and Defence Committee, said the programme marks “a significant step toward a more effective and truly European approach to defence procurement, with long-term effects that will shape cooperation after 2027.”
Co-rapporteur Raphaël Glucksmann described EDIP as the first “genuinely European” defence instrument, designed to build “a more resilient and sovereign Europe through common investment, joint procurement and deeper integration of the Ukrainian and European defence industries.”
Meanwhile, François-Xavier Bellamy, co-rapporteur in the Industry, Research and Energy Committee, said the plan reverses “dangerous import dependencies” and strengthens Europe’s industrial base to ensure armed forces have the means to fulfil their missions.
Vote and next steps
The regulation passed with 457 votes in favour, 148 against, and 33 abstentions. It now awaits formal Council approval before publication in the EU’s Official Journal.
Once in force, the Commission will issue implementing guidelines, paving the way for member states and industry to propose multi-country projects, including those involving Ukraine.
The European Commission first proposed EDIP on 5 March 2024, shifting from short-term measures, such as ASAP (ammunition production support) and EDIRPA (joint procurement boost),toward a longer-term, structural framework. Europe’s defence industry includes several major multinationals, mid-sized firms, and more than 2,000 SMEs with an estimated combined annual turnover of €70 billion.
For Cyprus, EDIP offers opportunities in electronics, sensors, shipbuilding support and component manufacturing, sectors where Cypriot firms already have niche capabilities. Joint procurement consortia and the EU-content rule could incentivise regional participation, especially for projects meeting the four-country minimum threshold.