Sittings · Compare

What changed

From · report parliamentary committee draft · 2025-06-18 ITRE-PR-774253 on the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153, (EU) 2023/1525 and 2024/795, as regards incentivising defence-related investments in the EU budget to implement the ReArm Europe Plan

→

To · opinion parliamentary committee draft · 2025-05-21 BUDG-PA-774231 on the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153, (EU) 2023/1525 and 2024/795, as regards incentivising defence-related investments in the EU budget to implement the ReArm Europe Plan

+24 added · −285 removed · 1 modified paragraphs hide unchanged text

~~PR_COD_1amCom~~

PA_LegEvaluation

~~Symbols for procedures~~

BUDGETARY ASSESSMENT

* Consultation procedure

for the Committee on on Industry, Research and Energy on the on the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153, (EU) 2023/1525 and 2024/795, as regards incentivising defence-related investments in the EU budget to implement the ReArm Europe Plan

*** Consent procedure

(COM(2025)188 – C100070/2025 – 2025/0103 (COD)

***I Ordinary legislative procedure (first reading)

The Committee on Budgets has carried out a budgetary assessment of the proposal under Rule 58 of the Rules of Procedure and has reached the following conclusions:

***II Ordinary legislative procedure (second reading)

A. whereas a massive increase in European defence spending is needed over a prolonged period to develop the necessary capabilities and military readiness to credibly deter armed aggression and aim at efficinetly protect the EU and its citizens;

***III Ordinary legislative procedure (third reading)

B. whereas the proposal does not modify existing budgetary commitments and remains within the limits of the overall allocations for the period 2021-2027 and is therefore budgetary neutral; whereas the proposal is meant to be implemented within the existing human resources allocation;

~~(The type of procedure depends on the legal basis proposed by the draft act.)~~

C. whereas the proposal establishes a fourth strategic sector for defence-related technologies under the Strategic Technologies for Europe Platform (STEP) which extends the scope of the programmes included in STEP;

~~Amendments to a draft act~~

D. whereas the proposal complements the mid-term review of the Cohesion policy by allowing investment in this sector under STEP in the European Regional and Development Fund (ERDF) and Cohesion Fund (CF); whereas Member States could for this new sector benefit from a 30 % pre-financing of the amounts programmed under cohesion policy funds and a Union financing of up to 100 %; whereas the proposal also introduces the possibility for the Member States to transfer resources to the Connecting Europe Facility (CEF) for projects supporting military mobility to benefit from the same rates; whereas disbursements under the cohesion programmes are subject to the fulfilment of the horizontal and thematic enabling conditions defined in the Common Provisions Regulation (CPR);

~~Amendments by Parliament set out in two columns~~

E. whereas the proposal will enable support to technologies with potential dual-use applications under the European Innovation Council (EIC) Accelerator, as well as support defence technologies under the STEP window; whereas the unused amount and potential returns from investment made by the EIC Fund during the pilot phase under Horizon 2020 should be made available for the STEP window; whereas they are estimated at EUR 210 million;

~~Deletions are indicated in bold italics in the left-hand column. Replacements are indicated in bold italics in both columns. New text is indicated in bold italics in the right-hand column.~~

F. whereas the proposal extends the scope of Digital Europe Programme to include dual-use projects as well as the deployment and operation of AI Factories and new generation AI Gigafactories;

The first and second lines of the header of each amendment identify the relevant part of the draft act under consideration. If an amendment pertains to an existing act that the draft act is seeking to amend, the amendment heading includes a third line identifying the existing act and a fourth line identifying the provision in that act that Parliament wishes to amend.

Conclusions of the budgetary assessment

~~Amendments by Parliament in the form of a consolidated text~~

1. Determines that the proposal is compatible with the multiannual financial framework (MFF), in particular the payments ceiling and the system of own resources; notes that the proposed measures do not involve any top-up of the EU budget;

New text is highlighted in bold italics. Deletions are indicated using either the ▌symbol or strikeout. Replacements are indicated by highlighting the new text in bold italics and by deleting or striking out the text that has been replaced.

2. Notes that, according to the Commission, the proposal does not require additional human resources; doubts whether this assessment took sufficiently into consideration a scenario whereby the Member States would make great use of the possibility to transfer cohesion funds to programmes implemented by the Commission;

~~By way of exception, purely technical changes made by the drafting departments in preparing the final text are not highlighted.~~

3. Deplores that the Commission did not perform an impact assessment of the proposal; highlights that it makes it impossible to comment on the possible consequences of redirecting funds towards the new priority; regrets that the legislative financial statement accompanying the proposal does not provide any estimate of the impact of the introduction of a fourth strategic sector under STEP and of the increase of the pre-financing and co-financing rates for investment in military mobility financed from cohesion funds transferred to CEF;

~~DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION~~

4. Determines that the proposal is compatible with the budgetary principles laid down in the Financial Regulation; welcomes the derogation from Article 212(3) enabling to consider the repayments including reimbursed advances, revenues and unused amounts net of fees and costs of EIC blended finance of the EIC pilot under Horizon 2020 as internal assigned revenues; recalls, in light of the introduction of the option of 100 % Union co-funding, the general principle whereby grants shall involve co-financing and full financing from the EU budget shall remain an exception; points out that introducing such flexibility at this time in the MFF could be perceived as penalising the most advanced Member States in the implementation of the cohesion programmes;

on the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153, (EU) 2023/1525 and 2024/795, as regards incentivising defence-related investments in the EU budget to implement the ReArm Europe Plan

Recommendations as regards the budget implementation

~~(COM(2025)0188 – C10-0070/2025 – 2025/0103(COD))~~

5. Welcomes the objective of the proposal to increase EU support to European defence investment; regrets however that in the absence of fresh resources existing priorities under the amended programmes will face a further budgetary pressure; underlines the importance of including a clear definition of ‘defence technologies’ in the STEP Regulation and a clear definition of dual-use in the Horizon Europe Regulation in order to prevent unnecessary risk of oversubscription to the available funds due to an unclear scope which might also lead to unnecessary overlaps with other existing schemes;

~~(Ordinary legislative procedure: first reading)~~

6. Requests the Commission to provide for traceable information in form of timely reports on transfers referred to in Article 26 of Regulation (EU) 2021/1060 to make the impact of the proposal clearly identifiable for the budgetary authority;

~~– having regard to the Commission proposal to Parliament and the Council (COM(2025)0188),~~

7. Calls on the Commission to maintain consistency in applying conditionality across the EU budget, and to pay utmost attention at preventing that the possibility to redirect cohesion funds leads to circumvent the existing decisions taken in accordance with rule-of-law requirements established in the CPR;

– having regard to Article 294(2) and Articles 114, 164, 172, 173, Article 175, third paragraph, Articles 176, 177 and 178, 182, 183, 188, 192(1) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C10-0070/2025),

8. Concludes that the proposal is compatible with the elements referred to in Rule 58(3) of the Rules of Procedure.

~~– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,~~

AMENDMENT

~~– having~~As ~~regard~~part toof ~~the~~its budgetary ~~assessment by~~assessment, the Committee on ~~Budgets,~~Budgets also submits the following amendments to the proposal:

~~– having regard to the opinion of the European Economic and Social Committee of ...,~~

~~– having regard to the opinion of the Committee of the Regions of ...,~~

~~– having regard to Rules 60 of its Rules of Procedure,~~

~~– having regard to the opinions of the Committee on Security and Defence and the Committee on Transport and Tourism,~~

~~– having regard to the report of the Committee on Industry, Research and Energy (A100000/2025),~~

~~1. Adopts its position at first reading hereinafter set out;~~

~~2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;~~

~~3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.~~

Amendment 1

Proposal for a regulation

~~Recital 1~~

Recital [18] a (new)

~~Text proposed by the Commission~~

~~Amendment~~

(1) The unprecedented geopolitical instability and the rapid deterioration of regional and global threat levels require an urgent and significant step up of the Union spending on research and development, industrial capacity and development of infrastructures connected with security and defence. As identified in the Joint White Paper for European Defence Readiness 2030, the Union should do more to support the urgent need to increase European defence-related investments with the Union budget.

(1) The unprecedented geopolitical instability and the rapid deterioration of regional and global threat levels, in particular Russia’s war of aggression against Ukraine, its continued aggression rhetoric toward the Union, and threat of its conventional military attack against the Union’s Eastern Flank, require an urgent and significant step up of the Union spending on research and development, industrial capacity and development of infrastructures connected with security and defence. As identified in the Joint White Paper for European Defence Readiness 2030, the Union should do more to support the urgent need to increase European defence-related investments with the Union budget. Member States must significantly increase their defence spending to strengthen Europe’s deterrence and defence posture not only by modernising armed forces and replenishing military stockpiles, but also by investing in critical infrastructure, joint capabilities, and defence technological innovation. Sustained and increased defence expenditure is indispensable for the safeguarding of European sovereignty, upholding collective security commitments within the North Atlantic Treaty Organization (NATO), and ensuring the Union's capacity to respond swiftly and decisively to the full spectrum of military and hybrid threats.

~~Or. en~~

~~Amendment 2~~

~~Proposal for a regulation~~

~~Recital 1 a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

(1a) In extending Union funding programmes to cover defence-related projects, robust safeguards must be in place to protect the Union’s strategic security interests, particularly in cooperation with third-country entities, where participation may require strict eligibility controls and exclusions.

~~Or. en~~

~~Amendment 3~~

~~Proposal for a regulation~~

~~Recital 1 b (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

(1b) The extension of Union funding programmes should be implemented with the full recognition that NATO remains a cornerstone of Europe’s collective defence, while the Union strengthens its role in enhancing resilience, supporting the capacity of the defence industry, and contributing to the security and territorial integrity of its Member States, in full complementarity with NATO. In light of the persistent Russian threat, its full-scale aggression, and the intensifying use of hybrid, cyber and subversive tactics, the Union must strengthen practical cooperation with NATO, NATO members, and trusted, like-minded partners, particularly in defence research, capability development, and military mobility. Closer coordination between the Union and NATO not only avoids duplication and enhances interoperability but also reinforces a united transatlantic response to common security challenges.

~~Or. en~~

~~Amendment 4~~

~~Proposal for a regulation~~

~~Recital 3~~

~~Text proposed by the Commission~~

~~Amendment~~

(3) While support to technologies having defence implications is possible today under the 3 existing strategic sectors identified in STEP, it appears necessary to increase the potentialities of development of research, industry and innovation in the defence area by setting out a fourth strategic sector in STEP focussed on defence technologies and security technologies. This new strategic sector should ensure that the STEP incentives are used to increase Union funding in defence technologies and contribute to European competitiveness in line with STEP objectives. Defence technologies should be understood as those referred to in the Annex to Directive 2009/43/EC and include, in particular, technologies in the areas identified by the European Council on March 6th 2025, namely: air and missile defence, artillery systems, including deep precision strike capabilities, missiles and ammunition, drones and anti-drone systems, strategic enablers, including in relation to space and critical infrastructure protection, military mobility, cyber, artificial intelligence and electronic warfare. Security technologies should be understood to refer to technologies intended to support the prevention of, detection of, protection against, response to, and recovery from, security threats, such as terrorism, hybrid threats, organised crime, and to support border management, critical infrastructure protection, cybersecurity and disaster-resilient societies. The development of such technologies is essential to enhancing the Union’s internal security, safeguarding its strategic interests, and ensuring the resilience of Member States’ societies and economies against destabilisation attempts. As regards artificial intelligence, AI Gigafactories should become key infrastructures to expand rapidly the power of AI in defence technologies.

~~Or. en~~

~~Amendment 5~~

~~Proposal for a regulation~~

~~Recital 5~~

~~Text proposed by the Commission~~

~~Amendment~~

(5) Horizon Europe established by Regulation (EU) 2021/695 of the European Parliament and of the Council4 is the Union’s key funding programme for research and innovation. The European Innovation Council (EIC) Accelerator established by that Regulation provides support, in particular, for innovations with breakthrough potential and of a disruptive nature with scale-up potential that may be too risky for private investors. SMEs operating within the defence sector require financing for the commercialization of innovative products. However, these companies face higher barriers to access finance compared to SMEs in other sectors. Whereas the support to defence research and development is done through the European Defence Fund (EDF), which is a specific programme of Horizon Europe, it is appropriate to open the EIC Accelerator for actions with potential dual-use applications. Support to scale-up under the EIC Accelerator should also be extended to non-bankable SMEs, including start-ups and non-bankable small mid-caps, including entities which have already received support from the Accelerator carrying out breakthrough and disruptive non-bankable innovation with a focus on defence applications. This justifies a targeted exception to the principle set out in Article 7(1) of Regulation (EU) 2021/695 of the European Parliament and of the Council according to which research and innovation activities under Horizon Europe have an exclusive focus on civil applications while not undermining the objective of ensuring unnecessary duplications.

~~__________________~~

4 Regulation (EU) 2021/695 of the European Parliament and of the Council of 28 April 2021 establishing Horizon Europe – the Framework Programme for Research and Innovation, laying down its rules for participation and dissemination, and repealing Regulations (EU) No 1290/2013 and (EU) No 1291/2013 (OJ L 170 12.5.2021, p. 1, ELI: http://data.europa.eu/eli/reg/2021/695/2024-03-01)

~~Or. en~~

~~Amendment 6~~

~~Proposal for a regulation~~

~~Recital 15~~

~~Text proposed by the Commission~~

~~Amendment~~

(15) Military mobility is also one of the objectives of the CEF programme. The Joint White Paper for European Defence Readiness 2030 recognised military mobility as an essential enabler for European security and defence and stressed the Union added-value in supporting dual-use infrastructure for mobility. The mid-term review of the European Regional Development Fund (ERDF) and the Cohesion Fund both established by Regulation (EU) 2021/1058 of the European Parliament and of the Council9 introduced the possibility to invest in defence or dual use infrastructure to foster military mobility benefiting from a pre-financing of 30% of the amounts programmed and the possibility to apply a Union financing of up to 100%. In cases where Member States transfer resources allocated to them in shared management to CEF they should benefit from the same conditions on pre-financing and co-financing for dual-use transport infrastructure projects as introduced in the ERDF and Cohesion Fund. In such a case, these amounts should be reserved to projects developing the Military Mobility corridors as identified by the Member States in Military Requirements for Military Mobility within and beyond the Union as well as digital connectivity and capacities..

(15) Military mobility is also one of the objectives of the CEF programme. The Joint White Paper for European Defence Readiness 2030 recognised military mobility as an essential enabler for European security and defence and stressed the Union added-value in supporting dual-use infrastructure for mobility. The report of 30 October 2024 commissionned by the Commission and the High Representative of the European Union for Foreign Affairs and Security Policy, entitled ‘Safer Together Strengthening Europe’s Civilian and Military Preparedness and Readiness’ (the Niinistö report)9a specifically refers to the need to intensify further work on priority dual-use transport corridors for military movements and the extension of fuel-supply chains for the armed forces along those corridors, as well as stockpiling and strategic reserves of energy. This position is echoed in NATO statements. In this context, the Commissioner for Defence and Space stated in March 2025 that the Union requires an initial investment of at least EUR 70 billion to adapt its transport and logistics infrastructure for the rapid movement of troops and equipment across Union territory in the event of conflict. The Union should therefore give special consideration to the situation regarding fuel pipelines, storage and other critical infrastructure projects that enhance the security and defence of the Union, particularly along its Eastern Flank, where major infrastructure gaps remain.

~~__________________~~

9 Regulation (EU) 2021/1058 of the European Parliament and of the Council of 24 June 2021 on the European Regional Development Fund and on the Cohesion Fund (OJ L 231 30.6.2021, p. 60, ELI: http://data.europa.eu/eli/reg/2021/1058/2024-12-24)

~~9 https://commission.europa.eu/document/download/5bb2881f-9e29-42f2-8b77-8739b19d047c_en?filename=2024_Niinisto-report_Book_VF.pdf.~~

~~Or. en~~

~~Justification~~

The second part of Recital 15 of the Commission proposal, on the ERDF and Cohesion Fund, is moved to Recital 15b (Amendment 8), and changed to include the pre-financing rate raised to 40 %, as proposed in the amendment on Article 4, paragraph 1, point 4.

~~Amendment 7~~

~~Proposal for a regulation~~

~~Recital 15 a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

(15a) Moreover, the scope of action in the transport section should be extended to include counter-mobility and territorial defence infrastructure, including dual-use obstacles, fortifications, and rapid deployment systems to reinforce border and territorial defence as part of comprehensive military mobility.

~~Or. en~~

~~Amendment 8~~

~~Proposal for a regulation~~

~~Recital 15 b (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

(15b) The mid-term review of the European Regional Development Fund (ERDF) and the Cohesion Fund both established by Regulation (EU) 2021/1058 of the European Parliament and of the Council1a introduced the possibility to invest in defence or dual use infrastructure to foster military mobility benefiting from a pre-financing of 40 % of the amounts programmed and the possibility to apply a Union financing of up to 100 %. In cases where Member States transfer resources allocated to them in shared management to CEF they should benefit from the same conditions on pre-financing and co-financing for dual-use transport infrastructure projects as introduced in the ERDF and Cohesion Fund. In such a case, these amounts should be reserved to projects developing the Military Mobility corridors as identified by the Member States in Military Requirements for Military Mobility within and beyond the Union as well as digital connectivity and capacities.

~~_____________________~~

~~1a Regulation (EU) 2021/1058 of the European Parliament and of the Council of 24 June 2021 on the European Regional Development Fund and on the Cohesion Fund (OJ L 231 30.6.2021, p. 60, ELI: ).~~

~~Or. en~~

~~Justification~~

~~The second part of Recital 15 of the Commission proposal is moved here, and changed to include the pre-financing rate raised to 40 %, as proposed in the amendment on Article 4, paragraph 1, point 4.~~

~~Amendment 9~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 1 – point 4~~

~~Regulation (EU) 2021/694~~

~~Article 12 – paragraph 5 – paragraph 1 a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

By way of derogation from the first subparagraph, the restricted calls for proposals and calls for tenders shall be open to the participation of legal entities established in, or controlled by, associated countries that are member countries of the North Atlantic Treaty Organization (NATO) or of the European Free Trade Association. The Commission shall conduct a thorough, risk-based screening of those legal entities, aiming to assess potential security risks to the interests of the Union.

~~Or. en~~

~~Justification~~

This amendment aligns participation rules with the EU’s security interests. It allows entities established in or controlled by NATO and EFTA countries to participate in restricted calls, while ensuring the Commission conducts thorough risk-based screenings to safeguard Union security interests.

~~Amendment 10~~

~~Proposal for a regulation~~

~~Article 2 – paragraph 1 – point -1 (new)~~

~~Regulation (EU) 2021/695~~

~~Article 24 – paragraph 2~~

~~Present text~~

~~Amendment~~

~~(-1) In Article 24, paragraph 2 is replaced by the following:~~

2. If necessary to achieve their objectives, calls for proposals may, in exceptional cases, be restricted in order to develop additional activities or to add additional partners to existing actions. In addition, the work programme may provide for the possibility for legal entities from low R&I performing countries to join already selected collaborative R&I actions, subject to the agreement of the respective consortium and provided that legal entities from such countries are not yet participating in it.

‘2. If necessary to achieve their objectives, calls for proposals may, in exceptional cases, be restricted in order to develop additional activities, to add additional partners to existing actions or to protect the Union’s security interests, in particular with regard to projects related to dual-use applications. In addition, the work programme may provide for the possibility for legal entities from low R&I performing countries to join already selected collaborative R&I actions, subject to the agreement of the respective consortium and provided that legal entities from such countries are not yet participating in it.’

~~Or. en~~

~~(02021R0695)~~

~~Justification~~

The amendment allows targeted restrictions to protect Union security interests, especially in sensitive dual-use projects, where uncontrolled access could pose security risks. It ensures that Horizon Europe supports research while safeguarding the Union’s strategic and technological assets.

~~Amendment 11~~

~~Proposal for a regulation~~

~~Article 4 – paragraph 1 – point 1 – point -c (new)~~

~~Regulation (EU) 2021/1153~~

~~Article 3 – paragraph 2 – point a – point ii~~

~~Present text~~

~~Amendment~~

~~(-c) in point (a), point (ii) is replaced by the following:~~

~~(ii) to adapt parts of the TEN-T for the dual use of the transport infrastructure with a view to improving both civilian and military mobility;~~

‘(ii) to adapt parts of the TEN-T for the dual use of the transport infrastructure with a view to improving both civilian and military mobility, including through the development of necessary dual-use energy infrastructure;’

~~Or. en~~

~~(02021R1153)~~

~~Justification~~

The Niinistö report underlines the need to strengthen dual-use transport corridors for military movements and extend fuel supply and energy logistics capacities along these routes, ensuring sufficient energy availability and resilience for military operations under crisis conditions.

~~Amendment 12~~

~~Proposal for a regulation~~

~~Article 4 – paragraph 1 – point 1 – point -c a (new)~~

~~Regulation (EU) 2021/1153~~

~~Article 3 – paragraph 2 – point a – point ii a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(-ca) in point (a), the following point is added:~~

~~‘(iia) to reinforce Union external borders by impeding adversary movement and enhancing military mobility.’~~

~~Or. en~~

~~Justification~~

Counter-mobility and territorial defence infrastructure are critical to ensuring full-spectrum military mobility and defence readiness. Including dual-use obstacles, fortifications, and rapid deployment systems allows Member States to strengthen border and territorial defence in response to evolving threats.

~~Amendment 13~~

~~Proposal for a regulation~~

~~Article 4 – paragraph 1 – point 2 a (new)~~

~~Regulation (EU) 2021/1153~~

~~Article 9 – paragraph 2 – point c~~

~~Present text~~

~~Amendment~~

~~(2a) In Article 9(2), point (c) is replaced by the following:~~

(c) under the specific objective referred to in Article 3(2), point (a)(ii), and in accordance with Article 12, actions or specific activities within an action, supporting parts, new or existing, of the TEN-T suitable for military transport, in order to adapt the TEN-T to dual-use infrastructure requirements.

‘(c) under the specific objective referred to in Article 3(2), point (a)(ii), and in accordance with Article 12, actions or specific activities within an action, supporting parts, new or existing, of the TEN-T suitable for military transport, in order to adapt the TEN-T to dual-use infrastructure requirements, including through the development of dual use-energy infrastructure;’

~~Or. en~~

~~(02021R1153)~~

~~Justification~~

The Niinisto report specifically mentions the necessity to intensify further work on priority dual-use transport corridors for military movements and the extension of fuel supply chains for the armed forces along these corridors, as well as stockpiling and strategic reserves of energy. This position is echoed in NATO statements.

~~Amendment 14~~

~~Proposal for a regulation~~

~~Article 4 – paragraph 1 – point 2 b (new)~~

~~Regulation (EU) 2021/1153~~

~~Article 9 – paragraph 2 – point c a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(2b) In Article 9(2), the following point is added:~~

‘(ca) under the specific objective referred to in Article 3(2), point (a)(iii), and in accordance with Article 12, actions supporting counter-mobility and territorial defence infrastructure, including dual-use obstacles, fortifications, and rapid deployment systems to reinforce border and territorial defence as part of comprehensive military mobility;’

~~Or. en~~

~~Justification~~

The inclusion of counter-mobility and territorial defence infrastructure ensures that CEF funding supports not only the movement of military forces but also defensive measures needed to deny access to potential aggressors, strengthening the Union’s border protection and territorial defence capabilities.

~~Amendment 15~~

~~Proposal for a regulation~~

~~Article 4 – paragraph 1 – point 3 a (new)~~

~~Regulation (EU) 2021/1153~~

~~Article 12 – paragraph 1 – introductory part~~

~~Present text~~

~~Amendment~~

~~(3a) In Article 12(1), the introductory part is replaced by the following:~~

1. Actions contributing to the adaptation of the TEN-T core network or comprehensive network as defined by Regulation (EU) No 1315/2013, with the purpose of enabling civilian-defence dual use of the infrastructure, shall be subject to the following additional eligibility rules:

‘1. Actions contributing to the adaptation of the TEN-T core network or comprehensive network as defined by Regulation (EU) No 1315/2013, with the purpose of enabling civilian-defence dual use of the infrastructure, including dual-use energy infrastructure, shall be subject to the following additional eligibility rules:’

~~Or. en~~

~~(02021R1153)~~

~~Amendment 16~~

~~Proposal for a regulation~~

~~Article 4 – paragraph 1 – point 3 b (new)~~

~~Regulation (EU) 2021/1153~~

~~Article 15 – paragraph 2 – point b~~

~~Present text~~

~~Amendment~~

~~(3b) in Article 15(2), point (b) is replaced by the following:~~

(b) for works relating to the specific objectives referred to in Article 3(2), point (a)(ii), the amount of Union financial support shall not exceed 50 % of the total eligible cost; however, the co-financing rates may be increased to a maximum of 85 % if the necessary resources are transferred to the CEF pursuant to Article 4(13);

‘(b) for works relating to the specific objectives referred to in Article 3(2), points (a)(ii) and (iii), the amount of Union financial support shall not exceed 50 % of the total eligible cost; however, the co-financing rates may be increased to a maximum of 85 % if the necessary resources are transferred to the CEF pursuant to Article 4(13);’

~~Or. en~~

~~(02021R1153)~~

~~Justification~~

Actions to reinforce EU external borders by impeding adversary movement and enhancing military mobility should have similar increased co-financing rate as those on adaptation of parts of the TEN-T for the dual use of the transport infrastructure.

~~Amendment 17~~

~~Proposal for a regulation~~

~~Article 4 – paragraph 1 – point 4~~

~~Regulation (EU) 2021/1153~~

~~Article 15 – paragraph 2 – point ba – point ii~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(ii) actions are entitled to a pre-financing payment representing at least 30% of the amount allocated in the grant agreement;~~

~~(ii) actions are entitled to a pre-financing payment representing at least 40 % of the amount allocated in the grant agreement;~~

~~Or. en~~

~~(02021R1153)~~

~~Justification~~

Raising pre-financing to 40% ensures timely disbursement of Union funds, enhancing liquidity for beneficiaries and accelerating the implementation of eligible military mobility actions. This adjustment facilitates the prompt execution of dual-use infrastructure projects essential for the Union’s security and defence objectives.

~~Amendment 18~~

~~Proposal for a regulation~~

~~Article 6 – paragraph 1~~

~~Regulation (EU) 2024/795~~

~~Article 2 – paragraph 1 – point a – point iv~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(iv) defence technologies;~~

~~(iv) defence and security technologies;~~

~~Or. en~~

~~Justification~~

Expanding STEP to include security technologies ensures comprehensive support for the Union’s resilience and strategic autonomy. Security technologies complement defence by addressing hybrid threats, critical infrastructure protection, cybersecurity, border management, and disaster resilience, reflecting the full spectrum of current security challenges.

~~Amendment 19~~

~~Proposal for a regulation~~

~~Article 6 a (new)~~

~~Regulation (EU) 2021/241~~

~~Article 21 a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

~~Article 6a~~

~~In Regulation (EU) 2021/241, the following Article is inserted:~~

~~‘Article 21a~~

~~Use of unspent RRF resources for defence industrial capacity~~

By derogation from Article 5, Member States may propose to reallocate unused resources under the Recovery and Resilience Facility (RRF) towards voluntary national contributions to Union defence industrial instruments, including the European Defence Industry Programme (EDIP). Such reallocations shall comply with fiscal governance principles and Union financial stability, and shall support the scaling up of the Union’s defence technological and industrial base. The Commission shall assess and, if appropriate, approve such reallocations in coordination with the Member State concerned.’

~~Or. en~~

~~Justification~~

Allowing voluntary reallocation of unspent RRF resources enables Member States to strengthen the Union’s defence industrial base without requiring new funding sources. This flexibility supports industrial scaling while respecting fiscal governance and ensures efficient use of remaining RRF funds to address urgent defence capacity needs.

~~Amendment 20~~

~~Proposal for a regulation~~

~~Article 6 b (new)~~

Text proposed by the Commission

Amendment

~~Article 6b~~

([18]a) This Regulation has implications for the Union budget. Accordingly, the European Parliament’s Committee on Budgets adopted a budgetary assessment, which forms an integral part of Parliament’s mandate for negotiations.

~~Transparency and Financial Vetting Requirements~~

1. Beneficiaries of Union funding pursuant to this Regulation shall disclose to the Commission information on their beneficial ownership structure, as defined in Article 3, point (6), of Directive (EU) 2015/849 of the European Parliament and of the Council1a. The accuracy of the disclosed information shall be duly verified prior to the award of funding.

2. All financial transactions carried out pursuant to this Regulation, including those under indirect management or involving external assigned revenues, shall be subject to screening pursuant to Union law on anti-money laundering and countering the financing of terrorism .

3. The Commission shall establish and maintain a Defence Transparency Register, listing all beneficiaries of funding pursuant to this Regulation. Registration in the Defence Transparency Register shall be a condition for the award and continued implementation of Union funding.

~~____________________~~

1a Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73).’

Or. en

~~Justification~~

Given the sensitivity of defence funding, mandatory disclosure of beneficial ownership, AML/CFT screening, and registration in a Defence Transparency Register ensure transparency and integrity of Union funding, prevent misuse by opaque or hostile-controlled entities, and safeguard the Union’s security and financial interests.

~~EXPLANATORY STATEMENT~~

The rapporteur considers that the Defence Mini-Omnibus proposal (COM(2025)0188) presents a necessary, timely and proportionate response to the rapidly evolving European security environment. Russia’s full-scale war of aggression against Ukraine, its long-term hybrid destabilisation efforts, persistent cyber threats, foreign interference, and growing geopolitical tensions have exposed Europe’s longstanding vulnerabilities. Decades of underinvestment in defence, fragmentation of industrial capacity, and regulatory rigidities have left Europe ill-prepared for the scale of current and future threats. In this context, strengthening the Union’s capacity to act under the Common Security and Defence Policy (CSDP), while contributing to the resilience and credibility of the Union as a security actor, is indispensable for ensuring stability and security on European territory and beyond.

The rapporteur stresses that these amendments do not create new funding instruments, but rather introduce targeted, legally coherent adjustments to existing Union programmes under the current Multiannual Financial Framework (MFF). In view of the rapidly evolving security environment and the limited years remaining in the present MFF, it is necessary to adapt priorities and ensure that existing financial instruments are mobilised effectively to strengthen the Union’s defence technological and industrial base, build long-term resilience, close critical capability gaps, and reinforce the Union’s strategic autonomy, while remaining fully complementary to NATO.

~~Expanding STEP to Defence and Security Technologies~~

The rapporteur considers it imperative that STEP’s strategic sectors reflect the real and immediate security challenges confronting Europe. Defence technologies, as defined by Directive 2009/43/EC and the European Council conclusions of 6 March 2025, encompass critical capabilities required for territorial defence and deterrence: air and missile defence, artillery, precision strike, drones, anti-drone systems, space-based enablers, electronic warfare, cyber, and artificial intelligence. In parallel, the inclusion of security technologies acknowledges that Europe’s security challenges are no longer purely military, but increasingly hybrid, spanning terrorism, organised crime, cyberattacks, disinformation, critical infrastructure sabotage, border threats, and disaster resilience including CBRN, pandemics, and climate-related disruptions. The rapporteur considers that supporting security technologies is an essential element of the Union’s wider resilience architecture. STEP must therefore serve as a vehicle not only for strengthening defence production capacities, but also for consolidating the Union’s capacity to withstand complex multi-domain threats.

~~Enabling Horizon Europe to Support Dual-Use Research~~

The rapporteur supports targeted amendments to Horizon Europe to enable controlled support for dual-use research, particularly through the EIC Accelerator. Many disruptive defence-relevant technologies emerge in the civilian innovation space but struggle to attract sufficient investment due to the complexity of dual-use markets and heightened security sensitivities. Supporting SMEs and start-ups working on such technologies helps bridge the innovation-commercialisation gap while securing European leadership in strategically sensitive sectors. In parallel, the rapporteur introduces necessary safeguards, allowing the Commission to restrict participation to entities established in the Union or in trusted NATO and EEA partners, with security screening where justified. This ensures that EU research funding does not inadvertently strengthen the technological capabilities of potential adversaries.

~~Allowing Voluntary Use of Unspent RRF Resources for Defence Industry Investments~~

The rapporteur proposes to allow Member States to voluntarily reallocate unused Recovery and Resilience Facility (RRF) resources towards EDIP. The scale of industrial ramp-up required to meet both Ukrainian needs and Europe’s defence production capacities far exceeds current allocations. Given that new RRF commitments are only possible until the end of 2026, this measure would enable Member States to make full use of remaining uncommitted resources within the current timeframe. Voluntary reallocations provide additional flexibility to support large-scale joint procurement, production capacity expansion, and technological upgrades, while respecting national recovery plans, fiscal governance frameworks, and Member State budgetary sovereignty. The rapporteur underlines that this option maintains national control while contributing to collective defence industrial strengthening.

~~Clarifications in CEF: Military Mobility, Energy, and Counter-Mobility Infrastructure~~

The rapporteur introduces clarifications to ensure that CEF funding reflects military operational needs, particularly along the external borders where large-scale military movements and reinforcement scenarios depend on robust dual-use transport corridors, secure fuel logistics, protected energy grids, and grid protection measures. In addition, the rapporteur highlights the essential role of counter-mobility and territorial defence infrastructure, including dual-use obstacles, fortifications, and rapid deployment systems, which are critical for denying hostile access and supporting border and territorial defence. These upgrades not only support NATO reinforcement plans but also strengthen Union resilience, crisis response and civil protection capacities.

~~Participation Restrictions for Security Reasons~~

The rapporteur recognises that security-sensitive projects, especially those involving dual-use technologies, require differentiated eligibility rules. The amendments introduced clarify that while in some programs participation is or may be further limited to EU-based entities, trusted partners from associated countries, established in NATO and EEA countries may continue to participate subject to Commission risk-based security screening. This approach maintains coherence with existing practices under Digital Europe and Horizon Europe, while allowing necessary safeguards to be applied in proportion to security risks.

~~Strengthening Transparency, Financial Vetting and Beneficial Ownership Requirements~~

The rapporteur underlines that public funding in the defence sector carries elevated security risks if funds are channelled to entities with opaque ownership or malign foreign control. The introduction of mandatory beneficial ownership verification, AML screening, and a Defence Transparency Register ensures full traceability, transparency, and integrity of EU defence funding.

~~Reinforcing NATO-EU Coherence~~

The rapporteur reiterates that NATO remains the cornerstone of Europe’s collective defence architecture, providing essential deterrence and security guarantees. At the same time, the Union has a responsibility to strengthen its own defence technological and industrial base, build operational resilience, enhance its capacity to respond to complex hybrid threats, and safeguard the security of its Member States. The amendments strengthen the Union’s ability to act, while contributing to NATO coherence, interoperability, and transatlantic security unity as a complementary benefit.

~~Conclusion~~

The rapporteur stresses that the geopolitical environment the Union faces today leaves no room for strategic hesitation. The Russian threat and malign influence operations originating from China will remain central security challenges for Europe for years to come. Hybrid operations, cyber sabotage, and military intimidation demand that Europe reinforce its own defence technological and industrial base as a matter of sovereignty and survival.

The rapporteur supports the Commission’s approach to adapt existing Union programmes to allow defence-related projects to benefit from Union funding. The amendments introduced build on this approach by proposing complementary, targeted modifications that further strengthen operational relevance, address identified capability gaps and enhance financial integrity and security safeguards.

The Union must assume greater responsibility in securing its territory, safeguarding its populations, and contributing fully to the joint defence effort alongside NATO Allies. These amendments strengthen the Union’s readiness, resilience, and credibility in a time where geopolitical competition is intensifying, threats are becoming more complex, and security can no longer be outsourced.

~~ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT~~

Pursuant to Article 8 of Annex I to the Rules of Procedure, the rapporteur declares that he received input from the following entities or persons in the preparation of the draft report, prior to the adoption thereof in committee:

~~Entity and/or person~~

~~European Commission DG DEFIS~~

~~Latvian Permanent Representation to the EU~~

~~The list above is drawn up under the exclusive responsibility of the rapporteur.~~

Where natural persons are identified in the list by their name, by their function or by both, the rapporteur declares that he submitted to the natural persons concerned the European Parliament’s Data Protection Notice No 484 (https://www.europarl.europa.eu/data-protect/index.do), which sets out the conditions applicable to the processing of their personal data and the rights linked to that processing.