The Danish Presidency of the Council of the European Union and the European Parliament have reached a provisional deal on the European defense Industrial Programme (EDIP), endorsing the European Commission’s proposed funding of 1.5 billion euros in grants. This programme, designed for the period 2025-2027, aims to strengthen Europe’s defense capabilities.

Out of the total budget, 300 million euros is earmarked specifically for the Instrument for Support to Ukraine, ensuring that Ukrainian defense needs are addressed from the outset. Both the Council and Parliament have urged the Commission to examine ways to expand the EDIP budget, including additional support for Ukraine and the proposed Fund to Accelerate the Transformation of Defense Supply Chains.

The agreement sets limits on sourcing, stipulating that components obtained from outside the EU and the European Economic Area cannot exceed 35% of the final product’s estimated cost. Additionally, no parts may be purchased from non-associated countries that could threaten the EU’s security or defense interests.

EDIP is structured to integrate Ukraine’s defense system within the Instrument for Support to Ukraine. It also establishes a European framework for selling military equipment, featuring a centralised catalogue of defense products to streamline delivery across the EU.

The programme allows for the creation of “pools” of defense materials, enabling faster deployment of essential equipment when needed. The provisional agreement now awaits formal approval from both the Council and the European Parliament before it can be officially adopted.