- “Cofinancing. This is always a bit of a problem. Um, getting that cofinancing really, uh, to work and to fall into place when it's needed. Um, a false, um, conclusion. Uh, really? We need to find a good balance. And every year in the work program, we're trying to find that balance between focusing on the one hand, on large support to large scale defense capabilities versus then really focusing enough and in a substantial amount also, uh, extend also on on, uh, innovation and providing enough funding for innovation. Uh, that brings us then maybe to the last three conclusions which we have drawn, uh, foster innovation cycles. Yes. I mentioned the EDF was created, of course, and set up for, uh, the war in Ukraine broke out. We learned, and there is a lot to learn. And one of the things, uh, surely, is that when we want to, we need more innovation. We need faster innovation cycles. Uh, we need probably leaner processes also to bring the money quicker to small All innovators. And this is what we were also trying to reflect some of the issues in the omnibus, in the Defense Omnibus regulation recently adopted and put forward to you also for scrutiny. We need further simplifications on our rules. I don't want to go into details, but yes, that's too far to the extent that we could reduce and simplify rules here.”
EU competences on defence
- “So, uh, I think around 50% of the EU budget that is, uh, spent through the EDF, uh, relates at the same time, for example, to, uh, pesco linked projects and activities. Uh, hybrid threats, in a sense, yes. That for example, uh, Now see cable protection. That is a something where we also learn. Now, uh, over time, uh, the priorities that new priorities and threats that appear. So yes, we do react and to the extent we can from the fund uh, also to, uh, changing, uh, priorities, emerging new threats and priorities. So for example, very much a bit in the, in the hybrid threat domain or in the, um, going beyond the mere defenses. See, cable protection was, for example, one of the topics which were recently accepted. But again, we focus and we discuss and we focus on what member states want to want to, uh, collaborate on. Uh, and that leads me maybe to the last aspect, uh, how do we ensure that this really leads to, to procurement afterwards? And do we have procurements? I think we gave some examples, but that, uh, were actual now in, in really three full scale implementation cycles, annual cycles which we have with the EDF. So to say that we're already at procurement stages, maybe a little bit early, but we keep that perspective in mind with all the projects we're supporting.”
Defence spending · EU competences on defence
- “Um main findings. Um, just very maybe I repeat a little bit also on some of the key findings, which we have already, or the key figures I've already given in the first slide. But um, on did we how far and how efficient was the fund in inducing and collaboration as they did for 5.4 billion. Now um committed this made the EU or then uh, the EDF the, the the third biggest uh defence EU defence R&D investor. Uh, and again, as I already said, 50% of the total collaborative defence R&D Projects and activities were really supported or instigated or started off with the budget of the EDF. So it had a very powerful impact in terms of, of of creating, incentivizing collaboration. Um, to the question, uh, developing key next generation capabilities in defence, how successful were we? We made really also quite an effort to ensure, together with the national models, that we say we really want concrete outcome, we want to accompany, uh, not just by sort of giving helicopter money to some projects, but following and see what comes out of it. But trying to accompany, uh, R&D efforts over time in the EDF from really if we if need be from closer lower uh, um research activities at lower TRL level up to prototypes, and we have agreed upfront with the national models and the program committee, uh, 50 prototypes in in all military domains, which we are steadily working towards, um, reinforce innovation capacity.”
Defence spending · EU competences on defence
- “Thank you, Honorable President chair. And also good morning, honorable MEPs. So 50 minutes. Let's go into immediate release light right away. Just very quickly recalling. So the EDF was really the first the community program is always using community budget, supporting R&D in the defense domain and collaborative R&D program. So it's worthwhile recalling very quickly just the overarching goal of the program, which were to to boost the not only making available, uh, EU funding for defence R&D in the EU. Uh, where in a time we're talking here about pre Ukraine war times where we saw also a clear decline in, uh, R&D funding at national level. Uh, so here we really were addressing, uh, if you wish, not only a market failure, but also an investment failure or an investment gap. What we also wanted to do was collaboration. So making sure that the capabilities, uh, the technologies, defence technologies to which the fund contributes, where uh, developed in collaboration uh, by all the advantages that you can gain from collaboration throughout the R&D cycle, starting from early research to the prototyping stage of, uh, of defense technologies or equipment, uh, contributing to important capabilities in the defense domain. Um, another issue, very important objective SME participation, uh, newcomers bringing them in or opening supply chains. So it was mentioned before already by the president. So this was an important aspect also. And uh, advancing uh, key technologies, defense technologies and capabilities.”
Defence spending · EU competences on defence · EU research funding
- “But so on the other side, really making sure as to what you mentioned already that the fund contributes to very concrete outcomes. And what's not there is there in the slide. I should have mentioned that separately. It's really innovation how to boost innovation. And I was an explicit request also that 4 to 8% of the EDF budget would be notably allocated to disruptive technology activities. Now key features of the EDF. It's it's a grant based program. So what we had at the end now for the current MFF timeframe was a total amount of 7.3 billion. It's very demand driven. So that's how the EDF is shaped and designed that. Here. The Commission listens, works with the member states, with the National and Moody's, uh, also with the fact that at a certain moment when we move up the R&D, uh, cycle of, of, uh, certain technology or equipment that we ask member states to co-finance with the idea to ensure that there is interest also from the Member States and afterwards to procure what we support under the fund. So this close link to, to the needs of of, of our armed forces and the national remedies was, was clearly is a key feature of the EDF. Um, what we also have learned and we come to that in this EDF interim evaluation. This is a first ever, uh, community programme in the defence domain, a lot more followed than over time.”
EU competences on defence · EU research funding
- “Uh, we have, under the EDF, devised a scheme. We were conscious that innovation and now all the more so in view of what happens in Ukraine and the war in Ukraine, that reinforcing the innovation capacity and and putting more emphasis on this is a real issue. We have devised a so-called UDI scheme. This is not a new program, it's just a scheme that allowed us. And I will come to that in a moment. Allowed us to give more emphasis, more coherence, uh, highlighting better how we can bring in more innovation, uh, into To into the defence. Area and capability development, including the fact that we are conscious that we need then for that also faster, leaner support mechanisms to efficiently support innovation in that domain. The fourth area we looked into project continuity, which was for us an important aspect. I said explained before, we want to accompany these R&D efforts really throughout the fund, from lower TRL to coming to real prototypes in which we hope that also through the cofinancing from member states, this will trigger and will then also lead to a joint or to production of the outcome of the results and then procurement, hopefully in a later stage by member states of what we do, uh, support under the EDF and this project continuity.”
EU competences on defence · EU research funding
- “And here we're supporting also the, uh, development of the next generation, uh, capabilities in that domain. Um, the very, uh, concrete one. Also, uh, the support to the development of the Uran patrol corvette, where then we have now France, Spain, Italy and Greece already expressed an interest in procuring around 20 ships in total. So that's also a real, very successful, uh, project, which we supported. Um, miracle. If we go to the to the next one. Is on the, uh, development of you really new, more warfare, uh, mind warfare, uh, solutions and capabilities. So, um, generating or contributing to the development of a whole series of, uh, of of of a new generation of underwater, uh, unmanned vehicles. Um. Maybe we go to the next one and still have two examples to give. Uh, one very concrete, one. Unmanned ground system. The Imax projects where we have already armed forces of of 16 countries that use the platform, but mostly for testing purposes at the moment. And that includes also Ukraine, the Ukraine armed forces. So these vehicles really are these unmanned vehicles focus on minefield clearing, casualty evacuation, logistics of all kinds. So here again, very concretely, already in the testing phase of several armed forces. And the last example we wanted to give you that is then a famous. So here again, a large cross-border collaboration among platform manufacturers and system integrators for a really a armored vehicle, uh, where again, uh, prototypes of uh to be tested from that vehicle is expected very soon and it will begin with the Finnish Defence Armed Forces, who were also a little bit leading in the development of that project and who will start testing that under EDF with EDF contribution developed very, very soon, very quickly, still on the the yuri scheme.”
Defence spending · EU competences on defence
- “Next slide please. Then key um, conclusions. Um. I already mentioned, uh, the project Continuity here again, we will again see that there is a lot of interest from Member States to bring into the fund and to have the fund support, uh, very strategic key capability, uh, capabilities in the defence domain due to lack of budget that will meet all these ambitious plans, which and projects that were put forward and the proposals put forward by the national committees, we could honestly spend about three times more every year than we have, and we had to sort of cut R&D projects related to key capabilities over several follow up projects. This is how we had to manage and find a good balance. So there could have been a lot more and a lot faster to be done in, in, in supporting key capabilities to the EDF, uh, through the EDF, um, more alignment, longer term planning tools. We have introduced one which is called the Multiannual Planning Tool for the EDF. It's an informal tool just to ensure that we have a real, uh, red line and threat through the programme implementation. But again, here we learned we need to see how in the future we can better align also with member states planning, long term planning, uh, and and increase here our our strategic foresight. If you saw which um Cofinancing I mentioned, when we come to the higher TRL level towards prototyping, we request member states.”
Defence spending · EU competences on defence
- “I don't have to go into details either, but what we really made an effort here is to to make sure that we find ways and mechanisms and use instruments to really ensure that we have a enough room under the EDF for disruptive technology, R&D and collaboration, as well as innovation. Uh, by using, for example, not only open calls but, uh, setting and using challenges, uh, hackathons, cascade funding so that we could uh, at least also give funding for smaller projects to an entity selected through a European competitive calls that can really then reach out in a certain area or regional level to, um, innovative. Smaller companies. We were also ensuring or doing spinning calls relatively successful. Now for the second time, to ensure that, um, R&D results that are interesting and stemming from other European programs are really attracted and, and, and uh, included in what we do under the EDF and that there will be then defence related follow on uh projects building on these results.”
EU competences on defence · EU research funding
- “Now, whether this is in terms of award criteria that turned out to be too complex, maybe eligibility rules where again, the mechanisms to implement and measure them will have to be simplified. So that goes really into sometimes very specific administrative processes. We're trying to simplify over time every year with the experiences we have from program implementation. And again here, one particular aspect on speeding up calls for innovation were included in the mini omnibus, which is also now to you as the co-legislators. Now for discussion. And then finally, we know that we have to do a lot more on creating awareness of the results and the outcome that the fund achieved and, and the projects which were supporting so were. We will also try and dedicate a lot more resources to that. And final word, did the fund overall. Uh, is it still relevant for the next MFF we believe? Yes. From all the conclusions which we have drawn from the, uh, from the from the mid-term evaluation, which is again, very early. Uh, but if we want to have an EDT IIB that stays on the on the technological edge, if we want to ensure, uh, technological and technical superiority in the defence domain in the future, we believe that this type of program also in the future is is highly and remains highly relevant. And let me close with this. Thank you very much.”
EU competences on defence
- “Okay. I'll go through it one by one. From all the members of Parliament that ask questions on the first one More campaigns, more information provided. We're apart from already. Yes. Organizing every year. Uh, um, defense info days, uh, or EDF info days, which with extremely large participation, were also reaching out regularly to Member States working with them, making sure that they organize also EDF Fridays to attract to inform about the benefits of the program at national level. Reaching out to their, uh, I would say industrial ecosystem and that works quite well. So we're all having a network of national focal points, uh, notably very often the national models with whom we work and try to reach out. We're also working with the European Network of Defense Related Regions, which also starts now, kicking off very nicely and working very nicely where the regions as such, we're trying to support them in their endeavours to also using the possibilities of the fund and collaborating with other regions across the EU. So a lot of efforts are done in that domain. One could always do more. You're quite right. And the more information we can provide, the better is also then we assume the possibility and the response rate from, from, uh, um, the ecosystem, the industrial ecosystem, small and large of, of each member state. So there's always room for improvement. But we're already, uh, investing almost every year, a little bit more in doing and reaching out to, uh, the stakeholders concerned about what the fund can do.”
Defence spending · EU competences on defence
- “The possibility of participation also of member states with a smaller, um, defense or ecosystem or industrial ecosystem. In order to do that, we need to find and try to find every year a good balance between, um, focusing on a few, uh, really large scale capability projects, which we know that there is large agreement also amongst member states as to what these capabilities is and what we should focus on versus then opening also the possibilities for smaller scale projects, where then also uh, notably uh, innovators, uh, smaller companies can uh, participant and find their place. So it's, um. And that means you cannot always come out with a work programme which says, unfortunately, we have 5 or 6 projects every year on which we focus on. A second consideration here is, um, needs are also different depending on, on the member states. So the threat perception is not always and the priority is not always the same across all member states. So collaboration also depends on and the mix of uh, topics we address every year also means that we're trying to find a good balance as to where the different threat perceptions are, and see that we are not only focused on the interests of a few, but trying also to find a good balance between which grouping of member states, uh, would like to, uh, also collaborate on, on uh, areas and projects which really correspond and respond to the the key threats they see.”
Defence spending · EU competences on defence
- “Now this instrument. So the interest from the private investors is definitely there. Um, so there could be more. And we will increase and continue collaboration with the EIF in the contribution or in the implementation of the program. Then, um, use spending, growth and jobs. Here the MEP um mixer done already? Uh I understand. Um, we should focus more on innovation. That's what you said. Uh, I think with the EU scheme, we're doing that already. Really quite successful. Um, and to, to bring in also companies from smaller member states. But the one thing one should note is that also entities from smaller from, from member states with smaller industries, smaller actors, what they want is not only to sort of being a confined to doing a small scale projects amongst themselves. They really want to also be part of the large scale capability project, which we're funding with the fund. This is where they want to end up with, and this is where most of also entities from the smaller member states are.”
State Aid · EU competences on defence
- “This funding continuity providing it in a, in a in a in a grant based instrument. Turned out to be a real headache. How are we going to do that. We found ways of doing it. But this was really one of the most important issues which we also learned how how, how can we ensure that we can, throughout the R&D cycle, support Member States or industry in their efforts to really develop the key capabilities or equipment or technologies related to key defense capabilities identified and agreed upon at European level. And then the fifth point crossing cross-border cooperation. I already I don't think I have to go into that. We here again, I think the fund was pretty successful in achieving that, notably through also having bonuses and particular award criteria for the projects which we applied that really sort of rewarded bringing in SMEs but also bringing in SMEs, notably from other member states, into the collaborative projects. And then finally, yes, inclusiveness here again. Uh, the share of, of, uh, SMEs is that participates in the collaborative R&D programs is, is is very high compared to other uh, programs as well. And it, it continues to be also attractive for notably smaller companies. There was the issue coming up newcomers. So uh, only in 2023, only uh, we managed to attract with the fund 693 new uh, applicants actually, who have never applied to, uh, defense collaborative, uh, R&D projects before.”
EU competences on defence · EU research funding
- “So, um, there is a good mix. So this kind of opening up of the fund to uh, supply chains trying to bring in here also entities from with which, for example, the large primes didn't work so far, uh, really works in, in many, many cases, uh, quite well. And uh, and then we accompany this also with calls that are really aimed at SMEs and smaller companies, trying to also give them a possibility to build up their capacities. Exactly. For in a next step collaboration in, in, uh, large scale capabilities And now also notably with regard to the to the Baltics and Baltics area. So we have, uh, around 50%. Uh, of our EDF projects is uh, contains also participation from entities of the of the Baltic countries, for example, just to give you an idea. So the inclusion of uh, entities from different domains and different areas, not only large or small, but also across countries, uh, works quite well. Um, the, um, yes, reduce fragmentation. To say we should focus more on larger scale capabilities that we have, of course, uh, risk to have then too many projects which we fund. What we're trying to do in every work program is to find exactly that kind of balance. Not every large scale capability project is prone or will guarantee or let's say in order to ensure the largest.”
Defence spending · EU competences on defence
- “Um, on the outcomes, what did we achieve? So, um, concretely, are their results okay. It's a program that is relatively early still in its implementation stage, but we do have already very concrete outcomes projects we support. And. Where we wanted to give you a brief overview, at least one very actual, um, R&D activity we're supporting or collaborative projects we're supporting, even in the double stage that's high, this high def, uh, developing a or aiming at the development of, of, uh, hypersonic missile interceptor, uh, then, uh, Odin's eye, which is now really focusing on, uh, space based early warning and tracking systems for, for ballistic missiles. Uh, a third one now coming more and more relevant here. I'm summarizing a bit. There are several projects calls we have running on that which is really then drones production, drone development, whether they are small drones, tactical drones, larger drones, swarm drones swarming. So all these, um, key capabilities that now also became hyper relevant in, in concern or in relation to what happens in the war in Ukraine at the moment then also uh, mid-size uh transport aircraft. So for future tactical transport cargo, uh, since we know that there is quite a number of, of member states where exactly this capability comes to the end of its lifetime and, uh, where replacement needs to be developed.”
Artificial Intelligence for military purposes · EU competences on defence
- “So 5.4 billion of the EU budget have been committed so far. I'm not saying spent, but there have been committed to collaborative R&D activities, including now the 2025 EDF work programme that has been published. And the calls, the related calls are out until until, uh, I believe October. So here again, I have to say that all work programs and that also says something were really, um, agreed with uh, the program committee and the models represented in the program committee unanimously, unanimously. So always consensus consents on what we were doing was not always easy and we had to find a good balance, but it was always possible. Um, 50% of um, so if you say 50% of of currently today in the EU, collaborative defence R&D is happening and is supported today by the EDF, we have in total 162 projects running involving 1366 unique entities participants and whether they are enterprises or RTOs, uh universities, in some cases even participating small or large companies, sort of big integrators and primes plus the smaller ones. And also in terms of inclusivity, it's not a program just for the for larger, uh, member states. It's really involving, uh, participants from 26 member states and Norway. Um, we have, on average, for all the consortia that sort of can apply for EDF funding. Their size is relatively large, with on average 19 participants from eight member states.”
Defence spending · EU competences on defence · EU research funding
- “Um. The length of procedures that was also mentioned, notably, I think, by MEP Louisa. Uh, yes, we are conscious of that. But let me also explain. It's not the commission that is so low always in in implementing the fund. There is a certain complexity already enshrined in the EDF regulation with regard to make sure that when we come to R&D, that of course the investment should, uh, go mainly to, uh, companies that are really established in the European Union, that brings a certain complexity of criteria and eligibility criteria and participation rules that we have. Uh, and then also uh, requires uh, preparation, notably of cooperation in large scale capability projects requires some time. So we have a bit of to tell you. The requests from the industry side that we said is if we want to mount a large scale cooperation, we will need time. So the calls need to be very long upfront. We have a long discussion period also with member States to agree on what they want to do and the topics we want to address every year. Also, they are asked to give a certain confirmation when it comes to eligibility conditions, declarations, guarantees to be given on the on the on the ownership control of certain participants. All this takes time. And that means that that also member States asked us to really keep this call periods very, very long.”
Defence spending · EU competences on defence
- “And again, Norway, that is an associated country to the to the programme. But there is a lot of outliers in this size. Notably we have partly programmes that or projects collaborative projects that combine up to around 50 participants or entities that collaborate in it, which is a lot, uh, as terms of our SME participation, something to highlight here as well. We have a large SME participation, which which was, as I said, one of the key objectives, 43% of the participants are SMEs. And also a little bit still on the usual 32% average proposal success rate. When for all the proposals that were submitted to the fund, let me then go a little bit more. Before I go into details of the results, which we have. Uh, the conclusions which we have drawn, just a very quick, uh, slide, as I said, since this is really the first, uh, community program using community funds. Uh, nothing to compare with, uh, there were precursor programs that were the preparatory action on defense research. There was the, the IDPs, but again, with limited time, limited scope. So in essence, when we did this interim evaluation, there was no kind of previous precursor program really to compare with. So we spent a lot of time and effort really listening to stakeholders. We don't have to go into this detail. I'll leave that with you just to show you all the efforts which we have really made in reaching out to all stakeholders concerned to get their views now, and build also on their feedback for the results of this interim evaluation.”
EU competences on defence · EU research funding
- “And then we also, of course, need some time to evaluate. We're very conscious that the processes are long. And if there is one thing, yes, we learned also from Ukraine, we need to speed up and what's happening in Ukraine. We need to speed up the processes. Hence also. Uh. Then, uh, what we put in order to simplify procedures in the defense omnibus and also this proposal in the mini omnibus, uh, to really say parallel to this, uh, cut, trying to cut down as far as we can the procedures for, um, all the project, uh, preparation, work, program preparation, call publication evaluation, and then grant agreement negotiations, trying to cut that down, but that we need, uh, probably also in the future, uh, kind of a speed procedures, notably for innovators and to really boost, uh, boost, uh, innovative, uh, projects in the future. Eastern border. Uh, do we, uh, react to that And do we react basically also to the to. Yes. The Rearm Europe projects uh, in um, to a large extent, yes. What is now a capability priorities that have been set out also in the rearm program. The fund is reacting to, uh, to all this and supporting, uh, through specific projects, uh, all these capability areas that have been highlighted at, at, at or in the Rearm Europe plan. Uh, there is also a strong link between what we do and what we fund under the EDF and PESCO.”
Defence spending · EU competences on defence
- “But this was really the first one. There is nothing we can compare with. This is really the first experience we have. Um, another special feature we had to implement the fund. Not that the commission chose it. It was really the co-legislator. So you and and also member states in council at the time who insisted having the programme implemented through annual work programmes. How did we structure For implementing it. We have defined a very commonly also following a kind of a grid of thematic topics uh, used in Ida, used uh also at national level of 15 thematic topics, cross-cutting technologies, enablers but also then the typical capability area. So uh, starting with uh ground air navy but also space cyber which we covered and where we were trying and on the basis each year in collaboration with member states to define the topics which we would focus on, uh, in, uh, in the national or annual calls for proposals that have been launched under the EDF now, uh, for, uh, in the meantime, the fifth time in an annual row. Okay, the interim evaluation also there were uh, it's based on of obviously on the EDF regulation with some clear requirements as to what we should look into. And we're coming to some of these aspects, of course, in a, in a, in a moment, just very quickly key elements where do we stand with the fund.”
Defence spending · EU competences on defence
- “And, uh, and, uh, trying to also support all kinds of matchmaking activities amongst member states and regions. Um, bring in as many member states as possible into the fund. Yes, that is also one of the key objectives we are following. And as we said, uh, we're already pretty successful in in bringing in, uh, entities from, I believe, now 26 member states. We said in an earlier slide, one always has to keep in mind that there are, of course, some member states. There are limits to it where the national ecosystem industrial ecosystem is a lot smaller than in other member states. Uh, but again, to say that even under that circumstances, we managed to to include in the different programs, uh, entities from 26 member states is actually for the defense domain, I think a pretty successful or good success rate in achieving, bringing really everybody on board, ensuring that the fund is exactly what it wouldn't want to be. Um, an instrument that will, uh, mainly benefit only the larger 4 or 5 or member states with large defence, industrial and large defence industrial base in Europe. Do we work with the EEF? Yes we do. We have even created under the EDF, a defence equity facility, about two years ago, in the context of the the UDI scheme of the fund where we're taking about, I believe it's 20 million over several years each year consecutively to build up together with the EIF, a defence equity facility, really for the first time, which is then also, um, ramped up with the capital, uh, EU capital coming from, from or from the, from the, from the EU side and also to attract private investors, uh, into supporting and, and uh, investing into, uh, defense companies and that also gains attraction.”
Defence spending · EU competences on defence