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Security and defence: New EU Initiatives

The European Union Commission presented several important initiatives to strengthen defence and security in the EU in February 2022 with the Contribution to European Defence (Defence Package II). In light of the war in Ukraine and other threats to the continent, the measures are long overdue.

The Defence Package II represents an important contribution to European defence and the response to a range of challenges: from conventional arms to hybrid warfare, cyber and space threats, military mobility and climate change. The package also includes a roadmap for critical security and defence technologies. The path toward a more integrated and competitive European defence market is to be achieved in particular through increased cooperation within the EU. This is intended to realize larger defence projects, save costs, increase efficiency and enhance operational readiness.

Investment in research and procurement

By the end of 2022, the European Defence Fund (EVF) will invest €1.9 billion in defence research projects and the development of new military capabilities. This is intended to kick-start important large-scale collaborative capability development projects while promoting innovation in the defence sector. The Commission also intends to develop further incentives for joint investment by member states in strategic defence capabilities. In particular, the Commission intends to explore a range of instruments to incentivize joint procurement of defence capabilities that are jointly developed in the EU. These include a VAT exemption, the provision of new financing solutions and a review of bonus mechanisms under the EVF.

The Versailles Declaration

Given the dynamics of the threats and challenges the EU will face in the future, further steps need to be taken. This was evident at the informal summit in Versailles in March 2022.

European leaders agreed on a joint statement on Russia's attack on Ukraine, including strengthening the community's defence capabilities, reducing energy dependence, and helping to build a resilient economic base. In light of the challenges and to protect EU citizens, there is a need to resolutely invest more and better in defence capabilities and innovative technologies. In detail, the document envisages:

  • significantly increase defence spending;
  • develop further incentives for joint investment by member states in projects and in joint procurement of defence capabilities;
  • Continue to invest in the capabilities needed to conduct the full range of missions and operations, including by investing in strategic enablers such as cybersecurity and space-based connectivity systems;
  • Promote synergies between defence and space research and invest in critical or emerging technologies and innovations for security and defence;
  • Take steps to strengthen and develop the defence industry, including SMEs.

Other priorities include the promotion and facilitation of access to private funding for the defence industry, cyber defence capabilities, critical infrastructure protection, space industry development and military mobility. It also aims to conduct a defence investment gap analysis and find further ways to strengthen the industrial and technological base of European defence.