The European Parliament has adopted the European Defense Industry Programme (EDIP), which could also have an impact on naval shipbuilding.
It is the first independent EU funding program aimed exclusively at the defence industry with direct industrial start-up financing. The aim is resilient production capacities and cooperative procurement. Its effectiveness will be demonstrated above all by the stabilization of critical supply chains.
On November 25, the European Parliament adopted the “European Defence Industry Programme” (EDIP) by a large majority – the first independent EU industrial policy instrument to support the defense industry. With a financial framework of €1.5 billion for the years 2025 to 2027, EDIP aims to strengthen the industrial base, accelerate joint procurement and integrate Ukraine more closely into EU production and supply chains. The political significance lies less in the sum and more in the precedent: for the first time, a subsidized, structurally designed defence industry programme is being created under the EU umbrella.
EDIP complements the emergency instruments ASAP and EDIRPA, which have been in place since the start of the war in Ukraine, and is intended to increase Europe’s industrial resilience. The Commission’s target is to organize at least 40% of defence procurement cooperatively by 2030. Projects “of common interest” in which at least four member states are involved are eligible for funding. The “Buy European” principle is central: components from non-associated third countries may account for a maximum of 35% of project costs. EDIP is part of the “European Defense Industrial Strategy” (EDIS), which aims to reduce European dependencies and make supply chains more robust.
International participation
In addition to all EU member states, Ukraine is involved as a partner with its own support instrument (€300 million). Associated European third countries such as Norway can participate, provided they meet the industrial policy conditions. For Canada and Japan, there are opportunities for cooperation via security policy partnerships, but without formal access to EDIP. For the USA, the United Kingdom, South Korea and Israel, the de facto rule is: participation only indirectly via joint ventures or Europeanized production.
International reactions and shifts in industrial policy
Transatlantic think tanks such as CSIS and Brookings see EDIP as a step towards more burden-sharing within the NATO framework. Bruegel and SWP, on the other hand, point to the limited financial scope and see EDIP as an “entry point” whose success will depend on national decisions. Mixed signals are coming from Washington: politicians welcome higher European defense investments, but express reservations about market-foreclosing elements.
US defense companies are reacting by adjusting their location strategy. Raytheon, Lockheed Martin and L3Harris are expanding European production in order to secure market access – “local production is no longer an option, but a prerequisite”, according to industry circles. South Korea is following a similar course: Hanwha and Hyundai Rotem are relocating production to Europe and setting up joint ventures in Poland and Romania.
In Japan, EDIP is interpreted as an expression of European security policy realignment and seen as an opportunity for technological cooperation. Civil society actors such as ENAAT, on the other hand, warn against the expansion of direct EU subsidies for military industry without sufficient parliamentary control and against possible WTO conflicts.
EDIP in an international context: investment catalyst
Canada and Asian partner states see EDIP not only as a European domestic project, but also as a potential platform for industrial integration. For international manufacturers, EDIP can be an incentive to relocate production capacities to the EU – a possible trigger for foreign direct investment (FDI). Whether EDIP can have this effect depends less on the budget than on reliable purchase guarantees and coordinated procurement volumes.
Ammunition procurement as an industrial stress test
It is worth remembering the attempt at joint ammunition procurement for Ukraine: one million artillery shells were announced within a year, but this target was clearly missed. Supply chains, production cycles and contractual mechanisms proved to be slower and less resilient than expected. National prioritizations and a lack of industrial reserve capacities considerably delayed joint procurement. The ammunition case is a good example of how political decisions without industrial capacity come to nothing. This is precisely where EDIP comes in – with structural development instead of short-term bridging.
Further procedure
Following its adoption in Parliament, EDIP now awaits formal approval by the Council. This will be followed by publication in the Official Journal of the EU and the start of the implementation phase – with calls for tenders and the launch of projects. National and international players are watching with interest to see when EDIP will actually come into effect.
EDIP marks an institutional entry into a European defense industrial policy. In industrial terms, the program provides incentives for greater cooperation and the scaling of European production capacities. However, the program will only enable an actual increase in capacity if the member states follow suit with investment decisions and binding purchase guarantees – either nationally or cooperatively as a group. By Hans Uwe Mergener
