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DRAFT OPINION (COM(2025)0188 – C100070/2025 – 2025/0103(COD))

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

SEDE-PA-774466

Committee on Security and Defence · Rapporteur: Thijs Reuten

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This draft opinion proposes amendments to EU regulations to boost defence investment under the ReArm Europe Plan, focusing on the European Defence Fund, Digital Europe, and Connecting Europe Facility, while leaving STEP and ASAP unchanged. It aims to strengthen resilience against hybrid threats, better integrate Ukraine and associated countries, speed up funding for disruptive technologies, and support SMEs and mid-caps.

Committee position. The rapporteur proposes amendments to the Commission proposal, focusing on the European Defence Fund, Digital Europe, and Connecting Europe Facility, while not amending STEP or ASAP.

Key points

  1. Calls for long-term solutions to create a true Defence Union and short-term solutions to ramp up production, innovation, and collaboration across defence industrial bases.
  2. Proposes to address capability gaps in seven defence capability domains identified in the White Paper, including air and missile defence, drones, and cyber.
  3. In the European Defence Fund, proposes to significantly shorten and simplify procedures for supporting disruptive technologies, while enhancing trust in decision-making.
  4. Extends Digital Europe Programme objectives to include resilience against hybrid warfare and foreign information manipulation, and clarifies that public sector includes armed forces.
  5. Allows restrictions on third-country participation to be eased to include EEA members and Ukraine where appropriate.
  6. Opens the European Defence Fund to Ukraine and EEA members, and potentially to Security and Defence Partnership countries under conditions.
  7. Increases funding rates for SMEs and mid-caps, including up to 40% for SME consortia and 100% for certain activities, and adds bonuses for Ukrainian participation and wider geographical coverage.
  8. Requires the Commission to avoid conflicts of interest by preventing experts from evaluating proposals from their own Member State, with annual reporting.
  9. In the Connecting Europe Facility, adds counter-mobility measures and resilience of critical infrastructure as eligible actions, and allows for European civilian repair capabilities for damaged submarine infrastructure.
  10. Proposes to delete amendments to the ASAP regulation, as it is no longer necessary with the adoption of EDIP.

Who is affected

  • Defence industry, including SMEs and mid-caps, will benefit from higher funding rates and faster procedures.
  • Ukraine and EEA member states gain access to the European Defence Fund and eased participation restrictions.
  • Armed forces are explicitly included in Digital Europe Programme public sector support.

Figures and deadlines

  • 20% funding rate for certain activities, up to 40% for SME consortia.
  • 80% funding rate for other activities, up to 100% for SME consortia.
  • Increased funding rate requires at least 25% of eligible costs allocated to SMEs, up from 10%.
  • Additional 10 percentage points for mid-caps when at least 25% of costs are allocated to them, up from 15%.
  • Additional 2.5 percentage points for large consortia with wider geographical participation.
  • Additional 10 percentage points for actions with Ukrainian participation or in support of Ukraine's defence.