The Council of the European Union has given final approval to the European Defence Industry Programme (EDIP), a new initiative that aims to strengthen the EU’s ability to supply and produce defence products across member states.
Under the approved regulation, the programme will provide €1.5 billion in grants between 2025 and 2027 to support the so called European Defence Technology Industrial Base, a network of companies and organisations that produce military equipment and technologies within the EU, the Council said in a statement on Monday.
Of this funding, €300 million is allocated for a Ukraine Support Instrument, which is designed to modernise Ukraine’s defence industry and encourage closer collaboration with the wider European defence sector.
Joint defence
The scheme will support joint hardware procurement projects. Other areas to receive funding include measures to boost the production capacity of critical defence products, and collaborative projects to improve EU military capabilities.
EDIP will also finance measures intended to increase interoperability — the ability of forces and equipment from different countries to work together — and steps to help smaller businesses and start-ups access the defence market.
The programme allows for potential additional funding if EU countries or external partners choose to make extra contributions, the statement said.
The regulation sets a limit on the use of components sourced from outside the EU or countries in the European Economic Area, as well as Ukraine for the Ukraine Support Instrument — no more than 35% of component costs in any defence product may come from elsewhere.
The regulation also prohibits using components from countries whose interests conflict with those of the EU or its member states.
The regulation creates the EU’s first security-of-supply framework at European level, with the aim of making defence supply chains more resilient and better able to cope with crises.
The regulation is scheduled to be signed next week on 17 December 2025 and will come into effect the next day.
