The governments of the European Union countries have reached agreement on a €1.5 billion defense investment financing scheme. The agreement is part of a broader initiative to rearm Europe after Russia's invasion of Ukraine in 2022, but has been accompanied by heated debates over strict rules on the origin of components, Reuters reports.
The proposal, known as the European Defence Industrial Programme (EDIP), foresees a minimum requirement of 65% of the value of components of funded products to originate in the EU or associated countries, with certain exceptions.
France was a major supporter of the strict "buy European" rules aimed at encouraging the European defence industry, while countries such as the Netherlands insisted on greater flexibility in purchases from allies such as the United States and Britain. The compromise text, adopted after more than a year of negotiations, did not fully resolve the tensions between member states.
A group of 10 countries - the Netherlands, Estonia, Latvia, Lithuania, the Czech Republic, Bulgaria, Romania, Croatia, Slovakia and Finland - expressed concern in a joint statement that the rules did not sufficiently take into account the "immediate need" to strengthen Europe's defence capabilities.
"We fully support the objective of strengthening European security and resilience through enhanced defence cooperation and investment," they said. "But we are facing an urgent threat to European territory and interests."
These countries stressed that the European defence industry "still depends - especially in the short and medium term - on critical components and technologies from like-minded partners outside the EU, in particular transatlantic allies." However, the countries have not opposed the start of negotiations with the European Parliament, which should follow the formal approval by the ambassadors of the 27 member states on Monday.
European officials acknowledged that the budget of 1.5 billion euros is relatively modest for the defense sector, but stressed that the fight over the criteria is so fierce precisely because the program could receive significantly more funding in the future.