EU launches shared defence fund

8 Jun 17

The European Commission has launched the bloc’s first shared fund for defence, which it said would ensure spending is more efficient and improve value for money.


Unveiled yesterday, the fund will pool European Union defence cash, and provide at least €1bn from the EU budget every year, to be spent on shared defence research, equipment and technology.

The commission said budget contributions will generate funding directly from member states, taking the fund’s total worth to around €2.6bn until 2020 and up to €5.5bn per year after that.

Its creation takes the bloc a step closer towards the deeper military cooperation previously resisted by outgoing member the UK, and builds on Europe’s joint security capabilities at a time when the continent’s leaders are warning it cannot rely on old allies.

The 68-year long sense of security provided by Nato has begun to waver with the election of US president Donald Trump, whose criticism of the organisation has placed a question mark over the commitment of the group’s heavyweight member.

“Complementing our cooperation with Nato, we need to do more and better ourselves,” said Jyrki Katainen, commission vice president for jobs, growth, investment and competitiveness.

“People across Europe are worried about their and their children’s security. We are showing that we can walk the talk.”

Funding will come both directly from member states and the EU budget, with two financing strands focused on research and development/acquisition respectively.

From 2017, the EU will offer grants for collaborative research and defence and technology projects, directly funded by €90m from the EU budget (with €25m available this year). After 2020, €500m will be available for this every year.

Co-financing from the EU budget and practical support from the commission will also encourage member states to cooperate on the joint development and acquisition of defence equipment and technology and equipment.

This will be worth €1bn per year after the end of the decade, while €500m will be provided for 2019 and 2020. The commission said it expects the programme will leverage national contributions worth five times that, potentially generating €5bn per year after 2020.

Only collaborative projects will be considered, with hopes the fund will encourage joint investment in areas like the development of drone technology or satellite communication.

The commission said it would increase efficiency, reduce duplication of spending and increase value for money, for instance through enabling the bulk purchase of equipment like helicopters.

“The fund will act as a catalyst for a strong European defence industry which develops cutting-edge, fully interoperable technologies and equipment,” said Katainen.

“Member states will remain in the driving seat, get better value for money – and ultimately see their influence increased.”

Did you enjoy this article?

Related articles

Have your say


CIPFA latest

Most popular

Most commented

Events & webinars