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European Defence Industry Programme: Council and Parliament reach provisional agreement

European Council / Council of the European Union

Council of the EU
Press release
16 October 2025 21:25

The presidency of the Council and negotiators from the European Parliament (EP) reached a provisional agreement on the European Defence Industry Programme (EDIP), a dedicated financing programme for defence worth €1.5 billion for the period 2025-2027.

The EDIP aims to boost the EU's defence readiness by enhancing the competitiveness and the responsiveness of the European Defence Technology Industrial Base (EDTIB). It also aims to support defence industrial cooperation with Ukraine and Ukrainian companies through the dedicated Ukraine Support Instrument, with a view to its future integration into the EDTIB. In addition, the EDIP establishes the first ever mechanism to ensure the security of supply of defence products throughout the EU, as well as a legal 'toolbox' to foster long-term armaments cooperation among member states ('the Structure for European Armament Programme').

The European Defence Industry Programme is key to Europe's defence readiness. It will boost our capacity to produce and supply critical defence equipment and ensure that we can respond swiftly and decisively to the increasingly complex security environment. At the same time, it will deepen our partnership with Ukraine by bringing its defence industry closer to ours - to the mutual benefit of Europe and Ukraine.

- Troels Lund Poulsen - Danish Deputy Prime Minister and Minister for Defence

Boosting the EU's defence readiness with a €1.5 billion budget

The provisional agreement reached today confirms the budget proposed by the European Commission for the EDIP, i.e. €1.5 billion in the form of grants. Of the total budget, €300 million will be allocated to the Ukraine Support Instrument.

The Council and the EP invited the Commission to explore options to reinforce the total budget for the EDIP in the future, including for the Ukraine Support Instrument and the proposed Fund to Accelerate defence Supply chains Transformation (FAST).

Ramping up European capacity and supply chains

The Council and the EP agreed that the cost of components originating outside the EU and associated countries (EEA states) should not exceed 35% of the estimated cost of the components of the end product, thereby striking a balance between the European preference principle and cooperation with partner countries to the benefit of European industry. No components will be sourced from non-associated countries that contravene the security and defence interests of the EU or its member states.

The EDIP also establishes a framework for European Defence Projects of Common Interest (EDPCIs), which are aimed at developing capabilities, including those securing access to strategic domains, enablers and systems.

Bringing Ukraine closer to the European defence industry

The Council and the EP agreed to further support Ukraine through the Ukraine Support Instrument, involving the Ukrainian defence industry in the instrument from the start. Furthermore, it was decided that Ukraine will be able to participate in the so-called EDPCIs. The Ukraine Support Instrument will be endowed with a financial envelope of €300 million.

Ensuring security of supply

Today's provisional agreement sets up the first ever EU security of supply regime in the area of defence, designed to ensure timely and reliable access to defence products and components during crises. The agreement sets out a two-stage approach, with a clear distinction between defence and non-defence products.

Setting up a European military sales mechanism

Through the EDIP, the EU is establishing a European military sales mechanism that will offer, among other things, a centralised catalogue of defence products and will facilitate the delivery of defence products, amplifying demand at EU level and increasing the competitiveness of the European defence industry on the international market. It also provides the possibility to establish 'pools' of defence products to allow for a swift delivery of equipment.

Next steps

The agreement reached today will have to be confirmed by both institutions before being formally adopted.

Background

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