EU Council approves €1.5 billion defense industry program

On December 8, the European Council formally adopted the European Defense Industry Programme (EDIP), an instrument designed to boost the EU's defense readiness by strengthening the competitiveness and responsiveness of the European Defense Technology Industrial Base (EDTIB), Report informs, citing the council.

The adoption marks the final step in the legislative procedure and will enable the programme's timely implementation.

"EDIP is the cornerstone of the EU's renewed commitment to bolster its defense readiness. It will strengthen the ability of member states to face current and future threats, enhance the competitiveness of the EDTIB, and ensure the timely availability and supply of defense products across the Union.

The programme provides €1.5 billion in grants for the period 2025-2027. Out of this amount, €300 million are earmarked for a dedicated Ukraine Support Instrument, a pivotal and unique instrument aimed at modernizing and supporting Ukraine's defense industry and fostering its integration into the wider European defense industrial ecosystem.

EDIP also allows for potential further budget reinforcements in the future, such as by voluntary financial contributions by member states or third parties," the statement reads.

Under the programme, the EU will fund:

- common procurement actions carried out by at least three countries (of which at least two must be member states), including for the establishment and maintenance of defense industrial readiness pools;

- industrial reinforcement actions, consisting of activities to ramp-up the production capacity of critical defense products;

- the launch of the European Defense Projects of Common Interest, collaborative industrial projects designed to contribute to the development of member states' military capabilities critical for the security and defense interests of the Union;

- supporting actions, including activities to increase interoperability and interchangeability, and activities to facilitate access to the defense market for SMEs, mid-caps and start-ups.

"To safeguard and strengthen the EU defense industry, whilst still maintaining cooperation with likeminded international partners, the regulation adopted today contains a clause by which components originating outside the EU and associated countries (EEA states), as well as Ukraine for the Ukraine Support Instrument, should not exceed 35% of total component costs of the end product. No components may be sourced from non-associated countries that conflict with the EU's or member states' security and defense interests.

Lastly, the regulation also establishes the first EU-level security of supply framework designed to reinforce defense supply-chain resilience and improve the EU's ability to respond swiftly in times of crises."

The regulation will be signed on December 17, 2025, and enter into force on the day following that of its publication in the Official Journal of the European Union.

On March 5, 2024, the Commission tabled a proposal for a regulation establishing EDIP. Endowed with a financial package of €1.5 billion for the period from 2025 to 2027, the proposal for EDIP is designed to build on existing programmes aimed at incentivizing the common procurement of defense products (the EDIRPA Regulation) and the reinforcement of defense industry manufacturing capacities (the ASAP Regulation), giving them a longer-term and more structured perspective.

On November 25, 2025, the European Parliament formally adopted the regulation, paving the way for its final approval by the Council today.