On ‘Tackling barriers to the single market for defence’

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on ‘Tackling barriers to the single market for defence’

(2025/2143(INI))

The European Parliament,

– having regard to the Treaty on the Functioning of the European Union (TFEU),

– having regard to the Versailles declaration adopted at the informal meeting of the heads of state or government on 11 March 2022,

– having regard to the Strategic Compass for Security and Defence – For a European Union that protects its citizens, values and interests and contributes to international peace and security, approved by the Council on 21 March 2022 and endorsed by the European Council on 25 March 2022,

– having regard to Council Decision (CFSP) 2017/2315 of 11 December 2017 establishing permanent structured cooperation (PESCO) and determining the list of participating Member States1,

– having regard to Directive 2009/43/EC of the European Parliament and of the Council of 6 May 2009 simplifying terms and conditions of transfers of defence-related products within the Community2,

– having regard to Directive 2009/81/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of procedures for the award of certain works contracts, supply contracts and service contracts by contracting authorities or entities in the fields of defence and security, and amending Directives 2004/17/EC and 2004/18/EC3,

– having regard to Regulation (EU) 2021/697 of the European Parliament and of the Council of 29 April 2021 establishing the European Defence Fund and repealing Regulation (EU) 2018/10924,

– having regard to Regulation (EU) 2023/1525 of the European Parliament and of the Council of 20 July 2023 on supporting ammunition production (ASAP)5,

– having regard to Regulation (EU) 2023/2418 of the European Parliament and of the Council of 18 October 2023 on establishing an instrument for the reinforcement of the European defence industry through common procurement (EDIRPA)6,

– having regard to its report of 30 April 2025 on the proposal for a regulation of the European Parliament and of the Council establishing the European Defence Industry Programme and a framework of measures to ensure the timely availability and supply of defence products (‘EDIP’)’ (COM(2024)0150),

– having regard to Council Regulation (EU) 2025/1106 of 27 May 2025 establishing the Security Action for Europe (SAFE) through the Reinforcement of the European Defence Industry Instrument7,

– having regard to the Commission proposal of 22 April 2025 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 (COM(2025)0188),

– having regard to the Commission proposal of 17 June 2025 for a regulation of the European Parliament and of the Council on the acceleration of permit-granting for defence readiness projects (COM(2025)0821), to the Commission proposal of 17 June 2025 for a regulation amending Regulations (EC) No 1907/2006, (EC) No 1272/2008, (EU) No 528/2012, (EU) 2019/1021 and (EU) 2021/697 as regards defence readiness and facilitating defence investments and conditions for defence industry (COM(2025)0822), and to the Commission proposal of 17 June 2025 for a regulation amending Directives 2009/43/EC and 2009/81/EC, as regards the simplification of intra-EU transfers of defence-related products and the simplification of security and defence procurement (COM(2025)0823), as part of the ‘Defence Readiness Omnibus’ package of 17 June 2025,

– having regard to the conclusions of the European Council on European defence, particularly those of 26 June 2025, 20 March 2025 and 6 March 2025,

– having regard to the joint communication from the Commission and the High Representative of the Union for Foreign Affairs and Security Policy of 5 March 2024 entitled ‘A new European Defence Industrial Strategy: Achieving EU readiness through a responsive and resilient European Defence Industry’ (JOIN(2024)0010),

– having regard to the political guidelines for the next European Commission for the period 2024-2029, entitled ‘Europe’s choice’, presented on 18 July 2025 by the then candidate for Commission President, Ursula von der Leyen,

– having regard to the report by Mario Draghi of 9 September 2024 entitled ‘The future of European competitiveness’ and, in particular, Chapter 4 thereof on increasing security and reducing dependencies,

– having regard to the report by Sauli Niinistö of 30 October 2024 entitled ‘Safer Together – Strengthening Europe’s Civilian and Military Preparedness and Readiness’,

– having regard to the report by Enrico Letta of 10 April 2024 entitled ‘Much more than a Market – Speed, Security, Solidarity: Empowering the Single Market to deliver a sustainable future and prosperity for all EU Citizens’,

– having regard to the joint white paper from the Commission and the High Representative of the Union for Foreign Affairs and Security Policy of 19 March 2025 entitled ‘Joint white paper for European Defence Readiness 2030’ (JOIN(2025)0120),

– having regard to Rule 55 of its Rules of Procedure,

– having regard to the opinions of the Committee on Economic and Monetary Affairs and the Committee on the Internal Market and Consumer Protection,

– having regard to the report of the Committee on Security and Defence (A10-0000/2025),

A. whereas given increased geopolitical threats, in particular due to Russia’s aggression in Europe and the crisis in the Middle East, 90 % of EU citizens rightly expect increased EU cooperation in the area of security and defence to protect them and to defend its interests and values on the global stage8;

B. whereas decades of defence procurement focused on the national level, industrial fragmentation, regulatory barriers, underinvestment, divergent foreign policy objectives, lack of integrated capability planning and aggregated demand, as well as competition over intellectual property, have prevented a fully integrated single market for defence, thereby incurring significant extra costs for the taxpayer while undermining the EU’s ability to protect the safety of its citizens;

C. whereas joint defence planning, development, production and procurement in the Union would allow for increased efficiency and effectiveness of public investment and industrial and operational gains, thereby increasing the social and political acceptance of necessary increases in defence investment in times of constrained budgets;

D. whereas the Letta and Draghi reports highlight a combination of structural weaknesses affecting the competitiveness of the EU’s Defence Technological and Industrial Base (EDTIB) and identify fragmentation, insufficient public defence spending and limited access to financing as core challenges;

The vision of a single market for defence in the Union

1. Believes that the dramatic challenges faced by the Union and its Member States require a complete rethinking of the way they cooperate on defence matters; underlines that the EU must fundamentally change its understanding of defence industry production by developing a true single market for defence, as called for in the Letta, Draghi and Niinistö reports;

2. Recalls that enhanced cooperation could lead to enormous efficiency savings of up to 30 % of annual defence spending across the EU, amounting to at least EUR 57 billion annually and significantly boosting the effectiveness of current defence spending; underscores the broader advantages for EU competitiveness, resilience, and strategic sovereignty, promising significant employment opportunities, economic development and technological leadership throughout the EU9;

3. Stresses that only a true single market for defence products can provide the means required to truly establish and maintain a competitive and resilient European Defence Technological and Industrial Base (EDTIB) of scale; underlines that a true single market for defence products is essential to close the capability gaps and to re-establish deterrence and is hence a necessary cornerstone of a strong, sovereign and competitive Union;

4. Urges Member States and the Commission to act swiftly to create the true single market for defence, acting on both the supply and demand sides; recalls that the aggregating of demand through common procurement and management throughout the life cycle, regulatory simplification, and cross-border industrial integration at EU level are urgently needed to address such barriers and reduce reliance on non-EU countries as outlined in the Letta and Draghi reports;

Obstacles to a single market for defence

5. Underlines that the current structure of the defence industrial landscape leads to unnecessary duplications and inefficiencies and hampers the strengthening of defence readiness; underlines that, coupled with underinvestment, this fragmentation prevents the realisation of economies of scale that could arise from pooling defence equipment procurement and production across European companies; highlights the vital need to overcome fragmentation in the EU defence industrial landscape;

6. Deplores the lack of coordinated capability planning and spending on defence products across the Union, which has resulted in divergent rules and eligibility criteria, creating legal uncertainty and often leading Member States to prioritise bilateral cooperation with non-EU countries; deplores that national priorities frequently take precedence over cooperation within the Union;

7. Believes that the current EU legislative frameworks do not provide conditions for procurement of goods with fast innovation cycles, such as in the area of drone development; expresses concern that the single market for defence is still undermined by the insufficiently harmonised application of its rules by the Member States and by disproportionate use of the exemption provided for under Article 346 TFEU, which hampers the push towards joint EU defence procurement; highlights the need for dedicated support for small and medium-sized enterprises and small mid-caps to facilitate their involvement in the defence industry supply chain, with a view to increasing innovation while building industrial redundancies that increase the Union’s resilience and security of supply;

8. Considers that the absence of a harmonised EU export control system continues to generate obstacles to the functioning of a single market for defence through its impact on intra-EU transfers; recalls that defence production today relies heavily on integrated cross-border supply chains, with components sourced from multiple Member States, which, in the event of an export block, creates uncertainty for industry and supply chains;

Breaking down the barriers

9. Calls on the Council and the Commission to equip EU defence programmes with adequate funding under the next multiannual financial framework to effectively incentivise the Member States to enter into joint capability development and procurement agreements and their defence industries to engage in closer cross-border cooperation; highlights the potential of new frameworks, such as the European Defence Projects of Common Interest and Structures for European Armament Programmes, to deliver on those objectives with the assistance of adequate funding;

10. Believes that EU institutions and agencies should enhance their coordinating role between Member States and welcomes the European Defence Agency’s contribution, particularly through the Capability Development Plan and the Coordinated Annual Review on Defence, emphasising that its expertise should be fully utilised; welcomes the contribution of multilateral procurement agencies such as the Organisation for Joint Armament Cooperation, which promote the harmonisation of equipment among EU Member States and partner states;

11. Calls on Member States to apply a ‘buy European’ approach, which prioritises the common procurement and increased production of defence products from the European Defence Technological and Industrial Base (EDTIB), Ukraine, European Economic Area/European Free Trade Association (EEA/EFTA) countries and, as a close second layer, third countries with which the Union has signed a Security and Defence Partnership, as it would ensure the EDTIB a predictable order volume, drive up private investment in R&D for defence products, and help the EDTIB to deliver innovative defence products in sufficient volumes;

12. Urges the EU and its Member States to treat Ukraine as an integral part of the single market for defence to the utmost extent possible, taking into account the fact that Ukraine’s future lies in the EU and that it would provide benefits for both the EDTIB and for Ukraine’s Defence Technological and Industrial Base;

13. Believes that the implementation of Directive 2009/81/EC on defence and sensitive security procurement needs to be significantly improved and calls on the Commission to propose an ambitious revision; calls on the Commission to issue a recommendation for an interpretation of Article 346 TFEU in line with the current reality of an interdependent security architecture in the EU; calls on Member States to make use of different contract forms that stipulate for innovation, competition and private capital investments;

14. Underlines the need to simplify and abolish hurdles related to intra-EU transfers, including mutual recognition of criteria and certification and a simplification of prior authorisation requests; calls on the Commission to urgently present proposals to further harmonise intra-EU transfers of defence products, to ensure simplification for the circulation of such products inside the Union, in particular eliminating authorisation requirements for components that are already integrated or are to be integrated into a defence product and cannot be transferred or exported as such; further calls on Member States to work towards that same goal; calls on the EU Member States to agree on new common export control rules for arms and defence goods;

15. Underlines the need for the EU and NATO to sign a cooperation agreement on capability planning and development to ensure coherent and complementary planning and interoperable defence capabilities; calls on the Commission to prepare a legislative proposal that would allow for the use of legally binding instruments to implement and enforce NATO standards for equipment, ammunition and stocks, once such an agreement is concluded, as it would improve interoperability and set a framework for joint European testing and certification of defence equipment instead of having separate national validation for each defence product;

16. Stresses the need to develop a more proactive role for the EU in sustaining investment in dual-use technologies and products, in particular when they are part of the supply chains of defence products, as a means of enhancing the EU’s security of supply and resilience against hybrid and emerging threats; advocates the promotion of civilian commercialisation of these technologies as a way to expand market opportunities and strengthen the EDTIB, fostering synergies between military and civilian development; calls on the Commission and Member States to create incentives to localise supply chains in the Union of the most critical inputs for defence products;

17. Firmly believes that in order to guarantee democratic legitimacy and the transparency of EU defence policies in times of hybrid warfare and Russian disinformation campaigns, it is critical that Parliament play a central role in the planning, oversight and scrutiny of this process;

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18. Instructs its President to forward this resolution to the Council and the Commission.

EXPLANATORY STATEMENT

Europe is entering a decisive phase in restoring its deterrence and defence capabilities. Russia’s invasion of Ukraine, combined with the United States’ growing focus on the Indo-Pacific, leaves no room for delay. Strengthening Europe’s deterrence requires action that is efficient, effective, and collaborative.

Both the Draghi and Letta Reports highlight the absence of a single market for defence goods as a key obstacle. While the Commission has proposed measures to stimulate joint procurement among EU Member States, progress has been limited the improvement of cross-border industrial cooperation. The Defence Omnibus Package includes some initial steps in these regards, which require further action. Without deeper reforms, current inefficiencies will persist—leading, for example, to defence equipment prices that are roughly 30 % higher than they would be under full EU-wide cooperation.

Besides economic advantages, building a genuine single market for defence would also improve interoperability among European armed forces, which today struggle with excessive diversity in equipment. Through such industrial policy measures, the EU can significantly reinforce Europe’s deterrence capabilities, which will continue to be coordinated and structured by NATO.

ANNEX: DECLARATION OF INPUT

Pursuant to Article 8 of Annex I to the Rules of Procedure, the rapporteur declares that he included in his report input on matters pertaining to the subject of the file that he received, in the preparation of the draft report, from the following interest representatives falling within the scope of the Interinstitutional Agreement on a mandatory transparency register1, or from the following representatives of public authorities of third countries, including their diplomatic missions and embassies:

1. Interest representatives falling within the scope of the Interinstitutional Agreement on a mandatory transparency register

VDMA e.V.

Agentur für Innovation in der Cybersicherheit GmbH

2. Representatives of public authorities of third countries, including their diplomatic missions and embassies

Mission of Norway 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 has 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.