Opinion on the general budget of the European Union for the financial year 2026 - all sections

10.9.2025

Mr Johan Van Overtveldt

Chair

Committee on Budgets

BRUSSELS

Subject: Opinion on the general budget of the European Union for the financial year 2026 - all sections (2025/0210(BUD))

Dear Mr Chair,

Under the procedure referred to above, the Committee on Security and Defence has been asked to submit an opinion to your committee. On 8 July 2025, SEDE Coordinators decided to send the opinion in the form of a letter, which SEDE adopted at its meeting of 8 September 2025.

OPINION

The Committee on Security and Defence calls on the Committee on Budgets, as the committee responsible, to incorporate the following into its motion for a resolution:

A. whereas the draft budget for 2026 is presented under extremely tight margins and leaves no room for substantive new initiatives under the ordinary annual budgetary procedure;

B. whereas the current geopolitical context, marked by Russia’s ongoing war of aggression against Ukraine, the escalating humanitarian catastrophe in Gaza and, following military conflict, ongoing tensions in the Middle East - including between Israel, Iran and Syria - and growing instability in the Union’s neighbourhood as well as the worrying policies of China, demands enhanced strategic responsibility by the Union, including in the area of its Common Security and Defence Policy (CSDP) in full complementarity with the commitments of the Member States within NATO and with the avoidance of unnecessary duplication of structures and competences;

C. whereas Member States, in particular those located on the Union’s eastern flank, have for years consistently increased their defence expenditure and strengthened their deterrence capabilities, providing substantial support from the very outset of the conflict in Ukraine, including military equipment, financial assistance and humanitarian aid;

D. whereas the European Council of 26–27 June 2025 reaffirmed the Union’s strategic objective to reinforce its defence capabilities and to increase joint investment; whereas it stressed the need to substantially increase national and collective defence spending, recalling the 5% defence expenditure commitment agreed by Member States participating in NATO at the June 2025 Summit;

E. whereas the Council also emphasised the urgency of strengthening the European Defence Technological and Industrial Base (EDTIB), promoting demand aggregation, joint procurement, standardisation and the functioning of a fully integrated European defence market;

F. whereas, in continuation of the ReArm Europe Plan, the recently adopted agreement on the mid-term review of cohesion policy, as well as to the European Social Fund Plus (ESF+), introduces new priority areas — notably defence and security — in the use of the remaining 2026–2027 flexibility reserve of cohesion programmes;

G. whereas this demonstrates a broad political consensus on the need to align all EU financial instruments, including shared management funds, with evolving geopolitical and security priorities;

H. whereas hybrid threats, especially cyberattacks targeting critical infrastructure, public administrations, companies and defence systems, as well as Foreign Information Manipulation and Interference (FIMI) against democratic processes, represent a growing structural risk to the Union’s security; whereas cyber preparedness is a fundamental element of strategic deterrence and resilience; whereas despite its central importance cybersecurity remains insufficiently mainstreamed across the Union’s main security and defence budgetary instruments;

I. whereas the development and deployment of emerging, disruptive and dual-use technologies — such as artificial intelligence, autonomous systems, quantum computing and space-based capabilities — will be decisive in securing the Union’s strategic autonomy in defence and security; whereas the European Parliament Resolution of 12 March 2025 on the White Paper on the Future of European Defence underlines the need to strengthen the European defence technological and industrial base (EDTIB) through ambitious and sustained investment in strategic and innovative capabilities;

J. whereas the European Defence Fund (EDF) is the Union’s main instrument to foster structured cooperation in defence-related research and industrial development, directly contributing to the competitiveness, resilience and innovation of the European defence technological and industrial base (EDTIB); whereas, according to the Interim Evaluation of the European Defence Fund (COM(2025) 299 final), the EDF has generated significant structural effects by supporting the development of critical capabilities, increasing SME participation and reducing fragmentation, while challenges remain regarding co-financing, the continuity between R&D and procurement, and the strategic planning at European level;

K. whereas, in light of global crises and growing geopolitical challenges, the Union must possess first-hand strategic information on developments beyond its borders; whereas the European intelligence system remains heavily dependent on national capabilities and willingness to share information of the Member States and allied countries, which underscores the urgent need to reinforce mechanisms for joint coordination and analysis; whereas the 2022 Strategic Compass for Security and Defence highlights the importance of intelligence for strategic autonomy and calls for strengthening the role of EU INTCEN (EU Intelligence and Situation Centre) and SIAC (Single Intelligence Analysis Capacity) as the intelligence hub to enhance common situational awareness by integrating data from multiple sources;

L. whereas the Union’s Preparedness Strategy and the Niinistö Report identify the urgent need to strengthen crisis preparedness through an integrated approach combining civilian and military resources, public-private cooperation, and joint operational protocols; whereas such capabilities are essential to ensure the Union’s functionality under hybrid threats, technological disruptions or external aggression; whereas defence budgets must be complemented by investments in critical infrastructure, resilient logistics and integrated response capabilities;

M. whereas the Union’s civilian CSDP has recently expanded with the establishment of new missions, which are underfunded and understaffed, and are at risk of not meeting operational demands;

N. whereas the draft budget for Heading 7 (European Public Administration) is based on a “stable staffing” principle and a maximum increase of 2% in non-salary expenditure; whereas such constraints do not take into account the political commitments of Member States to expand CSDP planning structures and missions, thereby undermines the operational effectiveness of the European External Action Service (EEAS);

O. whereas the EEAS Statement of Estimates for 2026 requests an increase in personnel to accommodate 14 additional contract agents for the Military Planning and Conduct Capability (MPCC), approved by the Political and Security Committee (PSC);

P. whereas the Union must adopt a defence-readiness mindset, and urgently scale up efforts to re-establish its defence preparedness and deterrence capability by 2030, taking into account long-standing underinvestment and a cumulative defence investment gap among Member States;

Q. whereas strengthening the European Union of Defence requires financing that is not only ambitious, but also fair, efficient and shared among Member States;

1. Welcomes the recognition of defence and security as strategic Union priorities, as reflected in the conclusions of the European Council and the move to allow targeted defence and security-related investments under shared management; reiterates its long-standing call to fund all CSDP expenditure from the Union budget except for operations having military or defence implications; stresses, furthermore, that this must not lead to the merging of security with other policy areas, such as the Common Agricultural Policy or cohesion policy;

2. Notes, however, that the draft budget 2026 does not provide any significant reinforcement of Heading 5 (Security and Defence), despite the increased operational tempo and political ambition of the Union;

3. Welcomes the Council Decision (CFSP) 2024/3116 of 9 December 2024 on the European Security and Defence College and repealing Decision (CFSP) 2020/1515; notes with satisfaction that this responds to a decade-long request by the European Parliament; reiterates its multiple calls to fund all security and defence related structures of the European Union from the EU budget and calls on the VP/HR and the Commission to make joint proposals to that end;

4. Stresses the fundamental importance of the “Eastern Shield” project as a strategic undertaking aimed at strengthening Europe’s security, notes its inclusion in the White Paper on Defence Readiness, and calls for the allocation of adequate financial resources to ensure its implementation;

5. Calls for the extension of funding opportunities from European funds, including through the Integrated Border Management Fund, to support the engineering preparation of border areas in countries threatened by hybrid activities and conventional armed aggression by third countries, particularly in Member States located in the eastern part of the European Union;

6. Notes with concern that the budgetary allocations for Common Security and Defence Policy (CSDP) missions under the CFSP instrument also fall short of current strategic demands and operational realities; stresses the need to reinforce the civilian CSDP budget line to reflect the creation of new civilian missions and ensure their sustainability, promoting rule of law, protecting human rights, and strengthening police and criminal justice cooperation especially in Ukraine, Moldova, Kosovo, the Middle East, Libya, the Sahel, etc, strengthen their interaction with relevant other EU and Member States instruments in the framework of the EU Integrated Approach, planning capacity, ensure proper staffing which requires closer coordination with Member States JHA actors and capabilities for rapid deployment; promote in budget procedures closer cooperation between Civilian CSDP missions and EU JHA including EU JHA agencies (FRONTEX, Europol, Eurojust, CEPOL);

7. Underlines that the current ceiling under Heading 7 is incompatible with the needs of an adequately staffed EEAS and calls for its adjustment in line with the EEAS Statement of Estimates; calls in particular for the recruitment of 14 additional contract agents for the MPCC, in accordance with the PSC-endorsed business case and the growing requirements for operational EU-level defence planning; underlines the persistent need for the procurement of secure Communication and Information Systems (CIS) for the effective control of all CSDP Missions;

8. Reiterates that military mobility is essential to the Union’s defence preparedness and the protection of its citizens in light of internal/external security nexus and constitutes one of the key areas of cooperation with NATO; underlines the growing relevance of this programme in light of the shifting security environment, the increasing need for cross-border troop and law enforcement movements, and the strategic importance of rail infrastructure for dual-use transport; takes note of the Council`s intended readjustment of appropriations in Heading 5 increasing the spending on military mobility; regrets however the low level of adjustment in view of the current challenges in the countries at the Eastern border; recalls that Heading 5 does not provide sufficient margin to cover the full scale of such investments and calls, therefore, for a minimum of 10% reinforcement of the military mobility envelope through the available margin under Heading 5, and, where necessary, by mobilising the Flexibility Instrument, in accordance with Article 12 of Council Regulation (EU, Euratom) 2020/2093 on the Multiannual Financial Framework; underlines that such use of the Flexibility Instrument is justified by the geopolitical emergency and the need to support urgent and unforeseen expenditure in the field of common defence and security;

9. Reiterates its call to fund Rapid Deployment Capacity and the related exercises and deployments from the Union budget except for operations having military or defence implications; calls on the VP/HR and the Commission to make joint proposals to those ends;

10. Stresses that cybersecurity must be treated as a transversal, coherent and coordinated priority within the Union’s security and defence policy; therefore calls for increased financial support through the instruments most directly linked to cybersecurity, including the European Defence Fund (EDF), Horizon Europe, the Digital Europe Programme, the Connecting Europe Facility, and the external action instruments supporting cyber-resilience abroad; underlines the need to invest specifically in the research and development of enabling strategic technologies for cybersecurity, such as quantum cryptography; calls, in this context, for increased funding to strengthen and expand the operational, analytical and technological capacities of the Union’s relevant bodies in this domain, including the European Cybersecurity Competence Centre (ECCC), the European Union Agency for Cybersecurity (ENISA) and the European Union Satellite Centre (SatCen);

11. Calls for the Union’s 2026 budget to strengthen support for the research, development and validation of cutting-edge technologies in the field of defence and security, with particular emphasis on high-impact domains such as artificial intelligence, advanced automation, quantum computing and autonomous platforms; highlights the role of the European Defence Fund (EDF) as the primary instrument for fostering technological innovation in defence, in synergy with Horizon Europe, the Digital Europe Programme, and cooperative projects among Member States promoted by the Commission; recalls that these technologies must be developed in line with international law and the Union’s fundamental values, ensuring their ethical and responsible use within the framework of the Common Security and Defence Policy (CSDP);

12. Stresses the increased strategic relevance of the European Defence Fund (EDF) in light of the Union’s rearmament objective and growing defence capability needs; notes with concern that a number of high-quality defence cooperation projects, positively evaluated under previous EDF calls, could not be financed due to budgetary constraints; calls, therefore, for a reinforcement of the EDF envelope for 2026 within realistic budgetary limits to address this gap, with a focus on supporting the development of key technologies for cybersecurity and to strengthen the Union’s own intelligence and strategic analysis capacities, notably in the framework of the EU Single Intelligence Analysis Capacity (SIAC) and the EU Intelligence and Situation Centre (INTCEN), as well as the EU Satellite Centre (SatCen); underlines that this increase should be financed, to the extent possible, through the available margin under Heading 5 and, where necessary, by mobilising the Flexibility Instrument, in accordance with Article 12 of Council Regulation (EU, Euratom) 2020/2093 on the Multiannual Financial Framework;

13. Stresses the need to consolidate and enhance the impact of the European Defence Fund, by addressing the shortcomings identified in the interim evaluation report 2025; calls for better co-financing mechanisms through the complementary use of instruments such as InvestEU and EIB resources; underlines the importance of better linking the Fund’s research, development and procurement phases, by creating stronger synergies with the European Defence Industry Programme (EDIP) and the joint procurement instrument; supports the creation of a multiannual planning framework for the EDF, aligned with the Capability Development Plan and the Strategic Compass, developed in close cooperation with the European Defence Agency (EDA) and the EEAS;

14. Takes note of the Commission’s Defence Omnibus proposal, which introduces key simplifications to the management of the EDF, including streamlined award criteria, the use of multi-annual work programmes, simplified rules for direct awards and pre-commercial procurement, and broader scope for indirect management; underlines that, in the context of limited available resources under Heading 5, the well prepared implementation of these changes is essential to ensure maximum impact and agility of defence-related expenditure;

15. Welcomes the forthcoming adoption of the EDIP and insists that, once its legal basis is in force, a dedicated portion of its envelope should be allocated to the Fund to Accelerate Defence Supply Chains Transformation (FAST); underlines the strategic role of SMEs and mid-caps in the industrialisation of defence technologies and the production of essential defence components, and urges reinforced support for them within this framework; considering the overall need to properly fund EDIP, calls for the Flexibility Instrument to be mobilised in accordance with Article 12 of Regulation (EU, Euratom) 2020/2093 to finance the proposed reinforcement of EDIP’s pillars including the FAST envelope;

16. Recalls the adoption of SAFE as part of the ReArm EU Plan, providing Member States with up to EUR 150 billion in loans backed by the Union budget to finance joint investments in defence capabilities; underlines that, although off-budget, SAFE constitutes a key pillar of the Union’s defence preparedness; regrets, however, that the European Parliament was not involved as co-legislator in its adoption - given its policy and budgetary implications as well as its strategic relevance - and expects the legal base to be corrected; calls for coherence and complementarity between SAFE-supported investments and budgetary instruments such as EDIP, notably to support demand aggregation, joint procurement and industrial scaling across Member States; insists that the Commission acts in full transparency and provides the European Parliament with detailed information on National Defence Industrial Plans in order to assess progress in achieving the objectives of demand aggregation and joint procurement;

17. Regrets that, under the 2026 draft budget, Heading 5 offers no real margin for reinforcement, despite the Union’s increasing strategic responsibilities; welcomes, in this context, the initial proposal to substantially increase defence-related appropriations proposed under the next Multiannual Financial Framework, which represents a significant rise compared to current levels; stresses, however, that this future increase must translate into coordinated Union-level action, with funding channelled through programmes that support joint procurement, demand aggregation, and the development of a truly European Defence Technological and Industrial base;

18. Calls on the Commission and the Council to move towards a truly European financial architecture for defence, based on solidarity and economic rationality; stresses the need to introduce shared financing mechanisms that avoid fragmentation, reinforce spending efficiency and promote cohesion among Member States; considers it a priority to mobilise common resources, facilitates the use of instruments such as InvestEU, and improves alignment with MFF and cohesion policy objectives; recalls that a credible European Union of Defence requires not only political will, but also stable, common and interest-driven financing aligned with the general European interest.

ANNEX: DECLARATION OF INPUT

The rapporteur for opinion declares under his exclusive responsibility that he did not include in his opinion input from interest representatives falling within the scope of the Interinstitutional Agreement on a mandatory transparency register, or from representatives of public authorities of third countries, including their diplomatic missions and embassies, to be listed in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.