Brussels

European Union Commission President Ursula von der Leyen has welcomed the agreement on the European Defence Industry Programme (EDIP), which will allocate EUR 1.5 billion to strengthen the European defence industry and support Ukraine.

The presidency of the Council and negotiators from the European Parliament (EP) reached a provisional agreement on the EDIP- which is a dedicated financing programme for defence worth EUR1.5 billion for the period 2025-2027, the official website of the Council of the EU and the European Council noted.

EDIP is set to boost the EU's defence readiness by enhancing the competitiveness and also aims to support defence industrial cooperation with Ukraine and Ukrainian companies via dedicated Ukraine Support Instrument, with a view to its future integration into the EDTIB.

In a post on X, Ursula von der Leyen said, "I welcome the agreement on the European Defence Industry Programme. EUR1.5 billion to strengthen Europe's defence industry. Support Ukraine. And ensure we are defence-ready by 2030, in line with our 'Preserving Peace' roadmap. Because when we invest in readiness, we invest in peace. Congratulations to @eu2025dk for seeing this crucial programme through."

Notably, of the total budget, the provisional agreement earmarks EUR300 million for the Ukraine Support Instrument.

The Council and the European Parliament agreed that the cost of components originating outside the EU and associated countries (EEA states) should not exceed 35 per cent 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.

Signficantly, the provisional agreement becomes 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 website noted.

Through the EDIP, the EU is establishing a European military sales mechanism that will offer, among several other features-- 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.

The development comes on the heels of the proposal tabled in March 2024 for a regulation establishing the EDIP.

It builds on the Versailles declaration, which was adopted in March 2022, where EU leaders had agreed to invest more and better on defence, while boosting the European defence industry and reducing strategic dependencies, the official website observed.

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It further noted that in march 2025, the European Commission presented the ReArm Europe plan which paves the way for a massive defence investment surge in Europe, making up to EUR800 billion of additional defence spending possible in the coming years.