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DRAFT OPINION (COM(2025)0555 – C10-0165/2025 – 2025/0555(COD))

On the proposal for a regulation of the European Parliament and of the Council on establishing the European Competitiveness Fund ('ECF’), including the specific programme for defence research and innovation activities, repealing Regulations (EU) 2021/522, (EU) 2021/694, (EU) 2021/697, (EU) 2021/783, and amending Regulations (EU) 2021/696, (EU) 2023/588, (EU) [EDIP]

SEDE-PA-782450

Committee on Security and Defence · Rapporteur: Riho Terras

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The Committee on Security and Defence proposes amendments to the proposed regulation establishing the European Competitiveness Fund, including its defence research and innovation programme. The amendments add defence, space and security priorities: protecting critical infrastructure, boosting the European defence industrial base, and supporting Ukraine. They set rules for European Defence Projects of Common Interest, including Council implementing acts, participation criteria and funding eligibility. They create a dedicated EU Defence Innovation Scheme for start-ups and SMEs, and adjust funding rates and third-country component limits. They also reshape the Defence Industrial Advisory Board and add space and civil security objectives.

Committee position. The Committee on Security and Defence proposes amendments to the Commission proposal to strengthen defence, space and security objectives, create a dedicated EU Defence Innovation Scheme, set rules for European Defence Projects of Common Interest, and adjust funding rates and third-country component limits.

Key points

  1. Adds to the Fund's aims the protection of critical infrastructure against hybrid and kinetic threats, and support for undersea infrastructure.
  2. Gives priority under Single Market support to projects in Member States in the EU's Eastern border regions.
  3. Sets out defence objectives: technological leadership, readiness, supply availability, collective capabilities for CSDP missions, and support to start-ups and SMEs.
  4. Requires that, after aggression against a Member State or triggering of Article 42(7) TEU, ECF funding be redirected by implementing act to the European defence industrial base, including support to Ukraine.
  5. Adds support for the Union's Security of Supply regime and for defence industry supply chains in the resilience policy.
  6. Creates a dedicated EU Defence Innovation Scheme for new entrants, start-ups, SMEs and scale-ups, with national contact points and advisory services.
  7. Requires defence activities to be consistent with the Strategic Compass, EDIS, the Roadmap for European Defence Readiness 2030, the Capability Development Plan and CARD, and to take account of PESCO, EDA, EUMC and NATO work.
  8. Provides that the Council, on a Commission proposal, adopts implementing acts updating or identifying European Defence Projects of Common Interest by qualified majority.
  9. Sets criteria for European Defence Projects of Common Interest: at least four Member States, open participation, strengthening the defence industrial base, and preference for Member States most at risk on the EU's Eastern Flank.
  10. Allows only Member States, associated countries and Structures for European Armament Programmes to receive funding under European Defence Projects of Common Interest.
  11. Raises Union support to up to 75% of eligible costs for defence technology and capability development, and to at least 25% for common procurement.
  12. Limits components originating outside the Union to no more than 35% of the estimated cost of the end product, and bans sourcing from third countries that contravene Union security and defence interests.

Who is affected

  • Defence industry, including start-ups, SMEs and mid-caps, which gains new funding and innovation support.
  • Member States, which coordinate project proposals and may apply support schemes for European Defence Projects of Common Interest.
  • Ukraine, which may participate in projects and receive support, and is invited as an observer to the Defence Industrial Advisory Board.
  • Space and civil security sectors, which gain new objectives on defence readiness and critical infrastructure protection.
  • Associated countries, which may join the Defence Industrial Advisory Board without voting rights and participate in projects.

Figures and deadlines

  • At least four Member States must be involved in a European Defence Project of Common Interest.
  • Components from outside the Union must not exceed 35% of the estimated cost of the end product.
  • Union support may cover up to 75% of eligible costs for defence technology and capability development.
  • Union support may cover at least 25% of the estimated value of common procurement.
  • Union support may cover up to 100% of eligible costs for actions for a Strategic Partner.
  • A consortium for common procurement must include at least three entities from at least three Member States or associated third countries, of which at least two must be contracting authorities from two different Member States.
  • A consortium of Member States, associated countries or Ukraine for a defence industrial readiness pool must consist of at least three countries, of which at least two must be Member States.