The EU approves tools for stimulating joint defense orders.
The Council of the EU has decided to implement an instrument for boosting the European defense industry, EDIRPA, which will encourage joint defense procurement and increase the capabilities of defense enterprises in EU countries.
The new mechanism will allow member states to receive partial compensation from the EU for conducting joint defense purchases as part of a consortium that will include at least three EU countries. Budget funding of €300M is expected to finance this compensation program.
The EDIRPA instrument is designed to increase the competitiveness and efficiency of the European defense-related technological and industrial base, including the involvement of small and medium-sized enterprises and businesses. The new legislation stipulates that contracting parties must originate from the EU and have management bodies within the EU and that at least 65% of the components of the final product must be produced in the EU or an associated country.