COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS European Defence Action Plan
Date: 2016-11-30
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: EU Member State, EU investment, European defence policy, European security, common security and defence policy, fund (EU), military cooperation, military equipment, public safety, security of supply

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   EN 

   EUROPEAN COMMISSION  Brussels, 30.11.2016  COM(2016) 950 final   COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS European Defence Action Plan  
 
 
1. Introduction 

President Juncker stressed in his 2016 State of the Union Speech1 the need for a Europe 
that  protects,  empowers  and  defends.  Taking  greater  responsibility  for  their  security 
means that Europeans must  invest in the development of key defence capabilities to be 
able  to  deter,  respond,  and  protect  themselves  against  external  threats.  The  European 
Union  must  demonstrate  that  it  can  act  as  a  provider  of  hard  as  well  as  soft  security, 
addressing calls for greater solidarity in security and defence.2 The Bratislava roadmap,3 
the  European  Parliament4  and  the  Council  of  the  European  Union5  have  also  recently 
underlined this priority.   

A stronger European defence requires Member States' joint acquisition, development and 
retention  of  the  full-spectrum  of  land,  air,  space  and  maritime  capabilities.  The  Global 
Strategy  for  the  European  Union's  Foreign  and  Security  Policy6  ("Global  Strategy") 
identifies a number of defence capability priority areas in which Europe needs to invest 
and develop collaborative approaches: intelligence-surveillance reconnaissance, remotely 
piloted  aircraft  systems,  satellite  communications  and  autonomous  access  to  space  and 
permanent earth observation; high end military capabilities including strategic enablers, 
as well as capabilities to ensure cyber and maritime security.  

The  European  defence  market  suffers  from  fragmentation  and  insufficient  industrial 
collaboration. A more efficient use of public money and a stronger industrial base could 
be  achieved  by  strengthening  the  Defence  Single  Market,  reducing  duplications  and 
improving the competitiveness of the EU defence industry. 

The need to invest in strategic capabilities  

For  Europe  to  be  able  to  deliver  on  these  capability  priorities,  it  must  create  the 
conditions  for  more  defence  cooperation  to  maximise  the  output  and  the  efficiency  of 
defence spending. This should go hand-in-hand with a strong, competitive and innovative 
defence  industrial  base  and,  to  the  benefit  of  the  broader  economy:  investments  in  the 
defence sector have a significant economic multiplier effect in terms of creation of spin-
offs and technology transfers to other sectors, as well as the creation of jobs.7 

1  The  State  of  the  Union  2016:  "Towards  a  Better  Europe  –  A  Europe  that  Protects,  Empowers  and 
Defends", 14 September 2016. 
2 On 14 November 2016, the Foreign Affairs Council concluded that the potential of inclusive Permanent 
Structured Cooperation (PESCO) should be explored. President Juncker called for such an initiative in his 
Political Guidelines in July 2014. He stated: "even the strongest soft powers cannot make do in the long 
run without at least some integrated defence capacities. The Treaty of Lisbon provides for the possibility 
that  those  Member  States  who  wish  to,  can  pool  their  defence  capabilities  in  the  form  of  a  permanent 
structured cooperation." 
3 Work programme proposed by the President of the European Council, the Presidency of the Council and 
the President of the Commission at the meeting of the 27 Heads of State or Government on 16 September 
2016, http://www.consilium.europa.eu/en/press/press-releases/2016/09/16-bratislava-declaration-and-
roadmap  
4  European  Parliament  report  on  "the  European  Defence  Union"  (2016/2052(INI))  adopted  on  
22 November 2016. 
5 Foreign Affairs Council Conclusions, 14.11.2016. 
6 See: https://europa.eu/globalstrategy/en/global-strategy-foreign-and-security-policy-european-union  
7 It is estimated that each euro invested in defence generates a return of 1.6, in particular through skilled 
employment,  research  and  technology, and  exports  (See  Europe  Economics,  "The  Economic  Case  for 
Investing in Europe's Defence Industry", 2013). 

 
 
 
                                                 
As called for by the Council,8 this European Defence Action Plan contributes to ensuring 
that  the  European  defence  industrial  base  is  able  to  meet  Europe's  current  and  future 
security  needs  and,  in  that  respect,  enhances  the  Union's  strategic  autonomy, 
strengthening its ability to act with partners. This Action Plan is closely linked with the 
Global  Strategy's  Implementation  Plan  on  Security  and  Defence,  which  sets  out  a  new 
level  of  ambition  for  the  Union  and  identifies  actions  to  fulfil  it,  as  well  as  with  the 
implementation  of  the  EU-NATO  Joint  Declaration9  signed  by  the  President  of  the 
European Council, the President of the Commission and the Secretary-General of NATO. 
The  actions  proposed  in  this  European  Defence  Action  Plan  will  lead  to  a  stronger 
European Union in defence, which ultimately means a stronger NATO. 

The Council welcomed the Implementation Plan on Security and Defence and took note 
of  the  current  priority  areas  in  which  Europe  needs  to  invest  adequately  and  develop 
collaborative approaches.10 It encouraged the Commission to support Member States in 
implementing  the  identified  capability  priorities.  Through  the  actions  developed  in  this 
Action  Plan,  the  Commission  is  committed  to  support  the  entire  cycle  of  defence 
capabilities  development  –  from  research  and  development  to  the  production  of  the 
capability.  

The challenges of the European defence  

Collectively, Europe is the world’s second largest military spender. However, it still lags 
behind  the  US  and  suffers  from  inefficiency  in  spending  due  to  duplications,  a  lack  of 
interoperability and technological gaps. Moreover, defence budgets in Europe have been 
shrinking  in  recent  years,  while  other  global  actors  (China,  Russia  and  Saudi  Arabia) 
have  been  upgrading  their  defence  sectors  on  an  unprecedented  scale.  Without  a 
sustained  investment  in  defence,  the  European  industry  risks  lacking  the  technological 
ability  to  build  the  next  generation  of  critical  defence  capabilities.  Ultimately,  this  will 
affect the strategic autonomy of the Union and its ability to act as a security provider.  

The  defence  industrial  sector  is  not  only  of  strategic  importance  for  Europe's  security. 
With a total turnover of EUR 100 billion per year and 1.4 million highly skilled peopled 
directly or indirectly employed in Europe,11 it is also a major contributor to the European 
economy. 

The defence industry is dependent on the launch of capability development programmes 
by  governments  and  more  generally  on  the  level  of  public  spending  and  investment  in 
defence. As end-customers for defence equipment, governments specify the requirements 
and  act  as  contracting  authorities,  regulators  and,  often,  as  supporters  of  exports.  In 
addition,  defence  system  development  takes  place  with  a  long  term  perspective  and 
implies  high  risks,  as  operational  needs  may  change  over  the  course  of  product 
development.  This  means  defence  companies  will  not  invest  in  military  technologies 
without a commitment from public authorities to buy them.  

8 Foreign Affairs Council Conclusions, 17.10.2016. 
9 Signed in Warsaw in July 2016. 
10 Further to the defence capability priorities welcomed by the European Council in 2013 and those in the 
2014  Capability  Development  Plan  and  the  EU  Global  Strategy;  Foreign  Affairs  Council  Conclusions, 
14.11.2016. 
11 Aerospace and Defence Industry Association (ASD) data. 

3 

 
                                                 
Many Member States have cut their defence budgets over the last decade. From 2005 to 
2015,  EU2712  defence  spending  has  decreased  by  nearly  11  %, 
reach  
an  overall  amount  of  EUR  200  billion.  The  share  of  defence  expenditure  in  GDP  
has  also  dropped  to  the  lowest  recorded  level  of  1.4%  in  2015.  In  real  terms,  defence 
budgets  in  the  EU  have  decreased  by  EUR  2  billion  per  year  over  the  last  decade.13  
Today, only 4 out of 28 Member States reach the NATO spending target of 2% of GDP 
set at the 2014 Wales summit: Estonia, Greece, Poland and the United Kingdom.  

to 

By  way  of  comparison,  the  US invested more  than twice  as  much as the total  spending 
of EU  Member  States  on  defence  in  2015. China  has  increased  its  defence  budget  by 
150% over the past decade. In 2015, Russia has invested 5.4% of its GDP in defence.14 

Despite  indications  of  a  reversing  trend  over  the  last  two  years,  the  persisting  lack  of 
investment has had an impact on the European defence industry, from prime contractors 
to  suppliers.  There  has  been  a  general  lack  of  opportunities  in  terms  of  new  major 
defence industrial projects, including a lack of European collaborative programmes.15  

The trend of shrinking defence budgets has been aggravated by inefficiencies in the way 
those budgets are used. The fragmentation of European markets leads to the unnecessary 
duplication  of  capabilities,  organisations  and  expenditures.16  The  majority  of  defence 
expenditure  is  spent  through  national  procurement,  while  the  share  of  collaborative 
equipment  procurement  represented  only  22%  of  the  total  equipment  procurement  in 
2014.17  

EU-wide competition and increased cooperation, which are the two means to enhance the 
efficiency and innovative capacity of the European defence industrial base, are still too 
limited. The decrease in defence budgets across Europe has not led to more cooperation, 
rather the contrary. There are fewer cooperative programmes today than 20 years ago.  

The added-value of the European Union 

The  decision  to  sustain  investments  in  defence  and  launch  capabilities  development 
programmes  remains  the  prerogative  and  the  responsibility  of  Member  States.  The 
mobilisation of EU instruments and policies, within the limits of the Treaties, must not be 
a  substitute  for  low  levels  of  Member  States'  defence  investments.  However,  the 
Commission is committed to complement, leverage and consolidate collaborative efforts 
by Member States in developing defence capabilities to respond to security challenges as 
well as to support the European defence industry.18  

12 EDA participating Member States. 
13 EDA, defence data 2014 and 2015- 7.6.2016. Other figures in this paragraph come from this source. 
14 SIPRI Military Expenditure database 2014, Military Database 2015, International Institute for Security 
Studies. 
15  Group  of  Personalities  report  on  European  Defence  Research  (GoP),  European  Union  Institute  for 
Security Studies, February 2016. 
16  For  example,  there  are  154  types  of  weapons  systems  in  the  EU  compared  to  27  in  the  US  EU-US 
Defence Data 2011, European Defence Agency. 
17 For EDA Member States. See EDA defence data 2014 and 2015- 7.6.2016. 
18  In  its  study  on  "The  Cost  of  Non-Europe  in  Common  Security  and  Defence  Policy"  from  2013,  the 
European Parliament considers that "the spread for the cost of non-Europe in defence is thought to range 
from EUR 130 billion, at the higher end, to at least EUR 26 billion, on a more conservative calculation".   
It  is  important  to  note  that  the  figure  of  EUR  26  billion per  year  corresponds  to  the  combined  defence 
budget  of  15  EU  Member  States  (Belgium,  Bulgaria,  Croatia,  the  Czech  Republic,  Denmark,  Estonia, 
Greece, Hungary, Latvia, Lithuania, Luxemburg, Portugal, Romania, Slovakia and Slovenia). 

4 

 
                                                 
In  particular,  the  Union's  policies  and  instruments  may  provide  added-value  through:    
(i)  improving  the  competitiveness  and  functioning  of  the  defence  industry  in  the  single 
market;  (ii)  further  stimulating  defence  cooperation  through  positive  incentives,  and 
targeting  projects  that  Member  States  are  not  able  to  undertake;  (iii)  reducing 
unnecessary duplications, and therefore promoting a more efficient use of public money 
at a time of budgetary constraints. 

The Commission has already developed strategies to support the competitiveness of the 
European  defence  industry  and  the  creation  of  a  more  integrated  defence  market  in 
Europe. The adoption, in 2009, of two defence Directives19 contributed to the progressive 
establishment of a European defence market. In 2013, a toolbox of market opening and 
industry support measures was proposed: the Commission identified a list of actions20 to 
further strengthen the single market for defence and promote a more competitive defence 
industry.   

For the first time, the Commission is now tabling a European Defence Action Plan which 
focuses  on  capability  needs  and  supports  the  European  defence  industry.  This  Action 
Plan  has  three  main  pillars  that  address  different  but  complementary  needs  along  the 
capability development cycle, focusing on technologies and products: 

  Launching a European Defence Fund;  
  Fostering investments in defence supply chains; and 
  Reinforcing the single market for defence. 

Furthermore, the Commission will promote civil / military synergies within EU policies, 
wherever appropriate. 

In many of the areas concerned, the initiatives announced in this Action Plan will benefit 
from  the  work  of  the  European  Defence  Agency  (EDA),  notably  on  the  Capability 
Development Plan,21 R&T priorities and the Key Strategic Activities.22  

2. Launching a European Defence Fund 

In his State of the Union speech of 14 September 2016, President Juncker called for the 
creation of European Defence Fund.  This  Fund would consist  of two distinct financing 
structures ('windows'), which are complementary and would be phased in over time: 

(i)  A  "research  window"  to  fund  collaborative  defence  research  projects  at  the  EU 
level.  This  would  be  developed  through  the  launch  of  a  Preparatory Action  and should 

19 Directive 2009/43/EC of the European Parliament and of the Council, simplifying terms and conditions 
of  transfers  of  defence-related  products  within  the  Community,  OJ  L  146,  10.6.2009,  p.  1;  Directive 
2009/81/EC of the European Parliament and of the Council on the coordination of procedures for the award 
of certain works contracts, supply contracts and service contracts by contracting authorities or entities in 
the fields of defence and security, OJ L 216, 20.8.2009, p. 76. 
20 Communication from the Commission to the European Parliament, the Council, the European Economic 
and  Social  Committee  and  the  Committee  of  the  Regions  "Towards  a  more  competitive  and  efficient 
defence and security sector", COM(2013)542 final. 
21 See EDA at: https://www.eda.europa.eu/what-we-do/eda-priorities/capability-development-plan 
22 i.e. technologies, skills, industrial manufacturing capacities. 

5 

 
 
                                                 
result  in  a  dedicated  EU  programme  in  the  post-2020  EU  multiannual  financial 
framework.23  

(ii)  A  "capability  window"  to  support  the  joint  development  of  defence  capabilities24 
commonly  agreed  by  Member  States.  This  would  be  financed  through  the  pooling  of 
national contributions and, where possible, supported by the EU budget. 

The "research window" and the "capability window" will be complementary but distinct 
in their legal nature and sources of financing. 

The  "windows"  will  be  complemented  by  a  coordinating  mechanism  in  the  form  of  
a  Coordination  Board,  bringing  together  the  Commission,  the  High  Representative,  
the Member States, the European Defence Agency, as well as industry as appropriate.  

The  primary  task  of  the  Coordination  Board  will  be  to  ensure  consistency  between  the 
research and the capability "windows" to better support the development of capabilities 
agreed  by  the  Member  States.  These  capabilities  are  identified  according  to  separate 
processes,  including  those  of  the  European  Defence  Agency  and  the  Member  States-
driven  Coordinated  Annual  Review  on  Defence  to  be  proposed  by  the  High 
Representative in line with Council Conclusions.  

Graph 1. Towards a European Defence Fund 

23 The relationship with the multiannual research framework programme foreseen in Article 182 TFEU will 
be determined as part of the new multiannual financial framework. 
24 For the purpose of this Action Plan, defence capabilities refer to military assets, including the necessary 
material equipment and technologies spanning all relevant domains. It does not include defence operations 
or other elements necessary to manage defence capabilities such as training, personnel and logistics. 

6 

 
 
 
                                                 
The "research window": funding research in defence technologies and products  

Defence research in innovative technologies, products and services is key to safeguarding 
the  long-term  competitiveness  of  the  defence  sector  and,  ultimately,  Europe's  strategic 
autonomy. However, defence Research and Technology (R&T) expenditure has suffered 
from  significant  cuts  in  national  budgets.25  Between  2006  and  2013,  defence  R&T 
expenditure  in  the  27  Member  States  participating  in  the  EDA  has  been  reduced  by 
27%.26 In 2014, EU27 defence R&T expenditure amounted to circa EUR 2 billion. This 
has  not  been  compensated  by  greater  cooperation:  over  the  same  period,  collaborative 
defence R&T has decreased by more than 30%.  

During  the  period  2006-2011,  the  US  spent  an  average  of  EUR  9  billion  per  year  on 
defence  R&T  and  an  average  of  EUR  54.6  billion  per  year  on  defence  R&D.  The  US 
effort  will  continue  and  even  increase  as  a  consequence  of  the  3rd  Offset  Strategy. 
Between 2012 and 2015, Russian R&D in defence has doubled, while China, according 
to available data, is also increasing its investment in R&D.   

More investment in defence research is required both at the national and the EU levels to 
strengthen the EU scientific and technological base in the area of defence technologies, 
products  and  services.  The  Commission  is  therefore  ready  to  mobilise  EU  funds  to 
support  defence  research  at  the  EU  level.  However,  such  funds  must  complement  and 
catalyse national efforts, and not duplicate or substitute them.  

The Commission intends to launch a Preparatory Action on Defence Research in 2017,  
as called for by the European Council, with a budget of EUR 90 million for the period 
2017-2019.27 This will be a first step, limited in time and in budget, which will serve to 
test the added-value of the EU budget supporting defence research. The Commission will 
consider a delegation agreement with EDA on certain tasks related to the implementation 
of the preparatory action. The research topics will be established in the work programme 
following the comitology principles. 

If Member States agree with this Action Plan, the Preparatory Action will pave the way 
for the "research window" to take the form of a European defence research programme 
within the next multiannual financial framework post 2020. This  programme should be 
of  a  credible  size.  Given  the  importance  of  defence  research  investment,  the  scale  of 
existing national defence research budgets and the high costs of developing cutting-edge 
defence  technologies,  such  a  "window"  may  need  an  estimated  annual  budget  of  EUR 
500 million in order to make a substantial difference in line with the conclusions of the 
Group of Personalities on European defence research,28 as well as with the recent report 
of the European Parliament on this matter.29 This amount would place the EU among the 
top 4 of defence research & technology investors in Europe. 

25 Defence Research and Development (R&D) expenditure covers any R&D projects up to the point where 
expenditure  for  production  of  equipment  starts  to  be  incurred.  R&D  includes  R&T.  See  definition  at: 
https://www.eda.europa.eu/info-hub/defence-data-portal/definitions 
26 European Parliament Study, "The Future of EU defence research", 2016. Other figures in this paragraph 
come from this source. 
27 European Council conclusions of 19/20 December 2013, EUCO 217/13.  
28 See: http://www.iss.europa.eu/publications/detail/article/report-of-the-group-of-personalities-on-the-
preparatory-action-for-csdp-related-research 
29  See  European  Parliament  report  on  "the  European  Defence  Union  (2016/2052(INI))"  adopted  on  22 
November 2016 which notes that "the European Defence Research Programme will need a total budget of 

7 

 
                                                 
 
The  programme  should  focus  on  a  limited  number  of  key  research  projects  linked  to 
defence  capability  priorities  agreed by  Member  States.  This  will ensure  a  cost-efficient 
allocation of resources, discourage unnecessary duplication and make use of economies 
of scale.30 EU-funded research should target critical defence, as well as innovation-driven 
technologies, based on excellence.  

The governance of the programme will be subject to EU budgetary rules and should take 
account  of  the  specificities  of  the  defence  sector.  Several  options  will  be  explored  to 
structure  a  dialogue  between  the  Commission,  the  Member  States  and  industry  on  the 
implementation  of  the  future  "window",  for  instance  through  the  possibility  of 
technological platforms. This dialogue will benefit from EDA's activities in the areas of 
R&T and capabilities priorities, as well as Key Strategic Activities. As mentioned by the 
Group  of  Personalities,31  the  Programme  Committee  should  be  composed  of  Member 
States'  representatives,  work  through  the  "comitology  procedure"  and  assess  the  EU 
added  value  of  projects,  especially  as  Member  States  are  the  end-users  in  the  defence 
sector.   

Financing would come mainly through grants, but the possibility to use pre-commercial 
procurements32  in  the  specific  case  of  defence  research  will  also  be  explored.  Such 
projects will require the participation of research institutes and companies from several 
Member  States  and  encourage  the  participation  of  SMEs,  including  those  working  on 
dual-use  innovation.  Specific  Intellectual  Property  Rights  (IPR)  rules  should  be  laid 
down, taking into account the experience of the Preparatory Action.  

Defence  technologies  developed  through  the  Preparatory  Action  and  the  future 
Programme  may  also  meet  civilian  needs.  Synergies  should  be  encouraged  to  boost 
innovation  for  the  wider  civil  economy,  such  as  technologies  on  cyber  defence  while 
avoiding any duplication. Conversely, civilian research could also be used to support the 
defence  industry.  Horizon  202033  can  be  used  for  boosting  fundamental  research  and 
innovation, in particular through promoting a cross-fertilisation effect. The Commission 
will  bring  together,  as  of  2017,  defence  industry  and  civilian  innovative  industries 
benefiting  from  Horizon  2020  funding  to  encourage  spill-overs  concerning  potential 
disruptive technologies and new processes into the defence industry. 

The "capability window": financing the joint development of defence capabilities  

Besides the importance of developing European cooperation in defence research, there is 
a  need  to  go  further  and  ensure  support  for  the  whole  development  cycle  of  defence 

at  least  EUR  500  million  per  year  over  that  period  in  order  to  be  credible  and  make  a  substantial 
difference". 
30 For instance, EU funded research could support technologies for the development in Europe of Remotely 
Piloted Aircraft Systems (such as drones), as well technologies to support the monitoring and security of 
EU  borders,  including  to  enhance  border  protection  and  maritime  security  (including  maritime  and  air 
support assets for the necessary maritime and air security operations). 
31 http://www.iss.europa.eu/publications/detail/article/report-of-the-group-of-personalities-on-the-
preparatory-action-for-csdp-related-research/  
32  Pre-commercial  procurement  (PCP)  is  an  approach  for  procuring  R&D  services,  enabling  public 
procurers  to  share  the  risks  and  benefits  of  designing,  prototyping  and  testing  a  limited  volume  of  new 
products and services with the suppliers.  
33  Regulation  (EU)  no  1291/2013  of  the  European  Parliament  and  of  the  Council  of  11  December  2013 
establishing  Horizon  2020  -  the  Framework  Programme  for  Research  and  Innovation  (2014-2020)  and 
repealing Decision No 1982/2006/EC, OJ L 347 of 20.12.2013, p. 104. 

8 

 
 
                                                                                                                                                 
capabilities.  Despite  the  obvious  economic  and  other  advantages  of  working  together, 
Member  States  continue  to  face  important  obstacles  hampering  the  development  of 
collaborative programmes. 

The  lack  of  coordination  and  joint  capability  planning  at  the  EU  level  reduces 
efficiencies  in  public  spending  and  Member  States'  investments,  while  resulting  in 
unnecessary  duplications.  Moreover,  the  lack  of  synchronisation  of  individual  budget 
contributions  leads  to  considerable  delays  in  the  launch  and  conduct  of  collaborative 
programmes.  Finally,  the  increasing  costs  of  complex  defence  capabilities  may  be 
prohibitive  for  Member  States  investing  alone  and  therefore  the  pooling  of  national 
resources  for  capabilities  would  lead  to  budgetary  savings  and  maximise  the  value  for 
money of defence investments.  

The  "capability  window"  of  the  Fund  would  seek  to  address  these  obstacles.  It  would 
secure  joint  financing  of  the  development  and  procurement  of  strategic  capability 
priorities. These would be jointly agreed by Member States and could include dual-use 
priorities  which  are  relevant  to  the  implementation  of  EU  policies.34  This  "window" 
would  focus  on  the  post-R&T  phases,  including  prototypes as  well  as  the  development 
and procurement of products and technologies.  

As  a  first  estimate,  a  reference  amount  of  EUR  5  billion  per  year  could  serve  as  an 
objective.  This  would  correspond  to  2.5%  of  total  national  spending  on  defence  within 
the EU and to 14% of national spending on defence capabilities. It would also fill the gap 
towards  the  target  agreed  by  EDA's  Member  States  to  spend  35%  of  their  equipment 
spending in collaborative projects.35 This reference should be further refined based on a 
scoping exercise to be conducted together with the Member States. 

The  specifics  of  this  "capability  window"  will  need  to  be  developed  further  in  close 
cooperation  with  Member  States,  the  High  Representative,  including  in  her  capacity  as 
Head  of  the  European  Defence  Agency,  and  other  relevant  stakeholders.  This  will  be 
done in line with the Treaties and existing mandates and in such a way as to  maximise 
synergies and to avoid duplications. In particular, this shall respect the work of the High 
Representative to explore the potential of Permanent Structured Cooperation pursuant to 
the mandate given by Council. The identification of priorities and the ownership of the 
capabilities would clearly remain with the Member States, which would also operate such 
capabilities. Cooperation is expected to develop over time.  

The "capability window" could build on two levels: 

  A  first  level,  open  to  all  Member  States,  would  consist  of  an  "umbrella 
structure".  It  would  set  out  the  common  framework  for  supporting  Member 
States,  as  well  as  provide  the  operational  back-office  for  the  development  of 
specific  projects  through  common  rules  and  applicable  legal  and  financial  tools 

34 For instance, drones which could be used for border surveillance. 
35  Over  the  period  2010-2014,  EDA's  Member  States  have  spent,  on  average,  19.6%  of  their  total 
equipment  spending  into  collaborative  equipment  projects,  the  equivalent  of  EUR  7.56  billion  per  year. 
This falls short by EUR 5.84 billion per year from the agreed target. 

9 

 
 
 
                                                 
for operating the projects. . It could also help smooth Member States' budgetary 
requirements and overcome the lack of synchronisation of national budget cycles. 

  The second level would consist of specific projects to develop joint capabilities 
on  the  basis  of  the  voluntary  participation  of  Member  States.  The  financial  and 
operational  decision-making  related  to  specific  projects  and  its  financing 
modalities would rest with the Member States participating in each project, within 
the  rules  set  out  at  the  level  of  the  umbrella  structure.  There  could  be  different 
groups of Member States participating in the different individual projects. 

The  development  of  joint  capabilities  would  be  financed  through  the  pooling  of 
contributions  from  Member  States  deciding  to  participate.  This  will  ensure  their 
sustained  co-financing  over  time.  Each  contribution  would  be  confined  to  individual 
projects, which would be  defined ex ante  by participating  Member States.  The  projects 
would  hence  be  financially  independent  and  limited  in  time  as  well  as  in  size,  thus 
excluding any form of financial cross-liability between projects.  

If needed and agreed, the "umbrella structure" and/or the individual projects may be used 
to  issue  project-related  debt  instruments.  Such  instruments  could  either  be  backed  by 
Member  States'  specific  payment  lines  for  the  individual  project,  or  through  additional 
guarantees/paid-in capital, either at the level of the individual project, or at the level of 
the umbrella structure. In the latter case, the umbrella structure could be endowed with its 
own capital base.36  

National  capital  contributions  to  the  "capability  window"  will  be  treated  as  "one-offs" 
under the Stability and Growth Pact, which means that they will be discounted from the 
structural  fiscal  effort  expected  to  be  accomplished  by  Member  States.  The  same 
treatment will apply to guarantees to the extent that they have an impact on deficit and/or 
debt.37 

The  Commission  is  ready  to  explore  all  financing  options  from  the  EU  budget  to  the 
"capability window", in accordance with the Treaties. Such a contribution could notably 
be provided for the technological development and demonstration of projects, including 
prototypes.  The  Commission  will  also  consider  the  possibility  of  supporting  feasibility 
studies  and  testing  facilities.  The  EU  budget  could  also  support  dual-use  products  and 
technologies. Finally, the administrative expenditure of this "window" could be charged 
to the Union budget. 

The Commission stands ready to support this "window" with its financial and technical 
expertise.38 Member States' experience and ongoing work in the context of EDA for the 
creation of a Cooperative Facility Mechanism should also be taken into account. 

Further  to  President  Juncker's  State  of  the  Union  speech,  and  in  light  of  further 
discussion  with  EU  institutions,  a  European  Defence  Fund  should  be  set  up.  The 
Commission proposes the following way forward. 

36 The purpose of a permanent capital structure could be two-fold: enhancing the credit worthiness of the 
window and facilitating the fungibility of individual debt issuances. 
37  As  for  instance  clarified  for  the  European  Fund  for  Strategic  Investments  in  the  Commission 
Communication  COM(2015)12 of  13  January  2015 on  "Making  the best use of  the  flexibility  within  the 
existing rules of the Stability and Growth Pact". 
38 In line with the Pringle case law (ECJ Case C-370/12 (Pringle) of 27 November 2012). 

10 

 
 
                                                 
For the "research window": 

 

 

Upon agreement of the EU budget for 2017 by the European Parliament and the 
Council,  the  Commission  will  launch  a  Preparatory  Action  in  2017  with  a 
proposed budget of EUR 25 million in the first year and an overall budget of an 
expected EUR 90 million over three years.   

Under  the  post-2020  multiannual  financial  framework,  if  Member  States  agree 
with this Action Plan, the Commission will propose a dedicated defence research 
programme with an estimated amount of EUR 500 million per year.  

For the "capability window": 

 

 

The  Commission  will  work  closely  with  the  Member  States,  together  with  the 
High Representative, also in her capacity as head of EDA, to develop further the 
modalities and governance of the capability window in order to support Member 
States' joint development of specific capability projects.  

As an order of magnitude, such window should be able to mobilise about EUR 5 
billion  per  year.  The  first  steps  should  be  taken  in  2017.  The  Commission  will 
launch, without delay in 2017, a scoping study to refine this estimate. Based on 
the further discussions with the other institutions, the Commission stands ready to 
facilitate  the  development  of  the  "capability  window".  The  Commission  will 
explore  all  financing  options  from  the  EU  budget  to  the  "capability  window", 
under  the  Treaties.  It  also  stands  ready  to  support  it  with  its  financial  and 
technical expertise.  

3. Fostering investments in defence supply chains 

The European Defence Fund will be a crucial step to support the competitiveness of the 
European  defence  industry.  Additional  actions  are  however  necessary  to  allow  the 
defence industrial base to remain innovative and competitive and, ultimately, be able to 
deliver  Europe's  capability  needs.  Particular  attention  must  also  be  given  to  promote 
access to finance to SMEs and to non-traditional suppliers and foster investments in the 
defence supply chains.  

Access to finance for SMEs and investments in the defence sector 

SMEs  and  intermediate  companies  are,  in  many  Member  States,  the  backbone  of  their 
defence sector and central to the European defence industrial base and the value chain. 
European  SMEs  or  subsidiaries  of  the  major  defence  producers  (prime  contractors  and 
sub-contractors)  often  offer  dual-use  goods  or  services  in  a  wide  range  of  industries.39  
At the same time, they are the most vulnerable part of the defence supply chain to access 
fresh  capital  needed  for  new  investments.  Innovation,  and  the  most  disruptive 
technological shifts, is performed outside of large groups, within an ecosystem of start-
ups40  and  SMEs.  They  do  not  benefit  from  the  necessary  funding  to  further  scale  up, 
which  ultimately  hinders  them  to  successfully  integrate  into  the  defence  supply  chains. 
Financial  institutions  often  choose  not  to  support  companies  in  the  defence  sector 
because of the risks involved.  

39 E.g. energy, telecom and ICT, automotive, material, chemical, aeronautics and space. 
40 Innovative civil technologies could impact directly the military sector (e.g big data analytics). 

11 

 
                                                 
Within  the  limitations  of  the  Treaties,  and  the  decision  making  bodies  of  the  European 
Investment Bank (EIB), the EIB group can provide loans, guarantees and equity products 
for  the  expansion  of  current  dual-use  activities,  which  would  unlock  new  opportunities 
for  certain  parts  of  defence  supply  chain,  notably  for  SMEs  and  mid-caps.  This  could 
also have positive spill-over effects to national financial intermediaries and development 
banks.  A  number  of  EU  financial  instruments  which  are  based  on  EIB  lending,  for 
example the European Fund for Strategic Investment41 (EFSI) or the Programme for the 
Competitiveness of Enterprises and small and medium-sized enterprises (COSME) could 
help  in  dual-use  defence-related  activities.  EFSI  could  guarantee  EIB  or  EIF  financing 
and  investment  operations  supporting  the  objectives  listed  in  the  EFSI  Regulation, 
including for projects related to the defence sector. 

Adapting  further  the  lending  criteria42  within  the  EIB  Group  for  the  defence  sector, 
within  the  limitations  of  the  Treaties43  and  subject  to  the  necessary  decisions  by  the 
relevant  EIB  bodies,  would  benefit  Member  States,  whose  defence  industry  is  mainly 
made of SMEs.  

The  Commission  will  support,  within  the  decision-making  bodies  of  the  EIB,  the 
adaptation  of  the  EIB  lending  criteria  to  the  defence  sector  within  the  limits  of  the 
Treaties. The Commission invites the Member States to support this process. 

Strengthening the support of EU funds to investment in defence  

European Structural and Investment Funds (ESIF) may be used by Member States in the 
defence  sector  as  long  as  they  contribute  to  the  objectives  of  the  fund  in  question  to  
(i)  co-fund  productive  investment  projects,  and  (ii)  support  the  modernisation  of  the 
defence supply chains. Defence industries can contribute to the goals and the objectives 
set in the ESIF, such as promoting the development of regional economics, representing a 
high investment multiplier on skills, jobs, technological and economic development.  

Investments  in  defence  contributing  to  regional  development  within  the  meaning  of 
Article 174 TFEU, may receive regional aid. The European Regional Development Fund 
(ERDF) may fund defence activities and dual-use activities in research and innovation, as 
part  of  a  national,  or  regional,  smart  specialisation  strategy.  The  Commission  invites 
local and regional managing authorities, who specify the investment calls and selection 
procedures  the  investment  projects,  to  support  SMEs  and  intermediate  companies  also 
active in defence supply chains. 

The  Commission  will  promote  co-financing  through  the  European  Structural  and 
Investment  Funds  of  productive  investment  projects  and  modernisation  of  the  defence 
supply chains in the defence sector, provided that the investment strengthens economic, 
social  and  territorial  cohesion.  The  Commission  will,  in  coordination  with  Member 
States, further promote such funding opportunities.  

Encouraging the development of regional clusters of excellence 

41  Regulation  (EU)  2015/1017  of  the  European  Parliament  and  of  the  Council  of  25  June  2015  on  the 
European  Fund  for  Strategic  Investments,  the  European  Investment  Advisory  Hub  and  the  European 
Investment  Project  Portal  and  amending  Regulations  (EU)  no  1291/2013  and  (EU)  no  1316/2013  —  the 
European Fund for Strategic Investments, OJ L169 of 1.7.2015, p.1 
42 http://www.eib.org/about/documents/excluded-activities-2013.htm  
43 Cf. Article 1 of Protocol No 5 on the Statute of the European Investment Bank. 

12 

 
                                                 
Regional  clusters  specialising  in  industrial  niches  (also  known  as  “clusters  of 
excellence”) allow large firms, SMEs and research centres to work in close geographic 
proximity in order to increase R&D collaboration and specialise in a specific technology 
area (e.g. aircraft engines). While the decision to prioritise regional clusters rests in the 
hands  of  local  and  regional  government  actors,  EU  financing  (including  through  EIB) 
could  lead  to  successful  technology  demonstrator  projects  and  the  development  of 
industrial and scientific partnerships between firms and research centres44.  

Furthermore,  the  Commission  has  launched  the  European  Network  of  Defence-related 
Regions45  to  support  EU  regions  with  important  relevant  industrial  and  research  assets 
and  to  share  best  practices  on  integration  defence-related  priorities  into  their  smart 
specialisation  strategies.  The  Commission  will  encourage  Member  States  to  promote 
regional clusters of excellence, benefitting the defence sector. 

Supporting skills in defence 

The European defence industry has to retain key skills and acquire new ones to be able to 
deliver high-tech defence products and services to meet security needs and compete in a 
global market long into the future. However, companies are experiencing increasing skill 
shortages. 

Defence will be a priority sector under the Blueprint initiative of the New Skills Agenda 
for Europe46. Moreover, the Commission will also support the setting-up of an industry-
led  European  Defence  Skills  Alliance  to  deliver  a  sectoral  skills  strategy.  The  Alliance 
will  contribute  to  the  development  and  implementation  of  scalable  and  sustainable 
solutions  for  new  jobs  and  skills  needs.  This  will  be  done  by  making  use  of  the 
COSME47  and  Erasmus+48  instruments  to  run  pilot  projects.  The  Commission  will 
consider further measures to improve the knowledge and innovation base on dual use. 

Under  the  'Blueprint  for  Sectoral  Co-operation  on  Skills'  the  Commission  will,  as  of 
2017, support strategic cooperation between the key stakeholders in the Defence Sector.  

4. Strengthening the single market for defence 

Opening  up  financial  support  to  investments  in  the  defence  sector  cannot  deliver 
sustainable  results  without  an  efficient  defence  industry  operating  in  a  genuine  and 
innovation-enhancing  Single  Market.  Increased  financing  opportunities  will  not  deliver 
in a meaningful way if they are used ineffectively.  

More competition, and a greater openness of the defence market in Europe, should help 
suppliers  to  achieve  economies  of  scale,  optimise  production  capacity  and  lower  unit 

44  Special  focus  could  be  given  to  priority  areas,  such  as  maritime  security,  cyber-security,  Remotely 
Piloted Aircraft Systems and satellite communications. 
45 EDNR, www.endr.eu 
46 COM (2016) 381 final. 
47  Regulation  (EU)  No  1287/2013  of  the  European  Parliament  and  of  the  Council of  11  December  2013 
establishing a Programme for the Competitiveness of Enterprises and small and medium-sized enterprises 
(COSME) (2014 - 2020), OJ L 347, 20.12.2013, p. 33.  
48  Regulation  (EU)  No  1288/2013  of  the  European  Parliament  and  of  the  Council of  11  December  2013 
establishing  'Erasmus+':  the  Union  programme  for  education,  training,  youth  and  sport,  OJ  L  347, 
20.12.2013, p. 50.  

13 

 
 
                                                 
production costs, thus making European products more competitive on the global market. 
Competition should take place both at the level of prime contractors and suppliers.  

Towards an open and competitive European defence equipment market 

The  two  Directives  on  procurement  and  on  EU  transfers  were  adopted  with  a  view  to 
improve the functioning of the defence market and increasing competition, while taking 
account  the  specificities  of  the  defence  sector.  If  fully  applied,  they  can  make  a 
significant  contribution  to  achieving  the  goal  of  an  integrated  open  and  competitive 
European  Defence  Equipment  Market.  However,  much  more  needs  to  be  done  in  this 
respect. 

The evaluations of the two Directives show that they are broadly fit for purpose and that 
no legislative amendment is necessary at this stage. However, they also identify a number 
of shortcomings that need to be addressed. 

In particular, the evaluation the defence procurement Directive49 indicates that, despite a 
more  than  twofold  increase  in  the  value  of  the  contracts  published  EU-wide,  a  very 
significant  share  of  defence  procurement  is  still  done  outside  EU  public  procurement 
rules50. This means that there is still a significant untapped potential under the Directive 
to  generate  further  public  savings  and  opportunities  for  jobs  and  growth.  Furthermore, 
public  authorities  still  use,  to  some  extent,  offsets/industrial  return  requirements  which 
can  lead  to  uncertainties  for  the  industry.  Finally,  the  subcontracting  provisions  of  the 
Directive,  which  enable  procurement  authorities  to  require  the  successful  tenderer  to 
subcontract  a  share  of  the  contract to  third  parties  via competitive  tendering,  are  rarely 
used.  

The Commission will focus on the effective implementation of the Directive, including 
through  enforcement.  It  will  clarify  the  interpretation  of  exclusions  of  the  Directive  to 
support procurement authorities in the application of the rules: the adoption of the notice 
on government-to-government contracts is a first step in this direction. The Commission 
will  also  revise  the  guidance  on  the  subcontracting  provisions  in  order  to  increase 
flexibility  for  procurement  authorities.  Finally,  the  Commission  will  provide  guidance, 
encouraging  Member  States  to  fully  use  the  flexibility  of  the  Directive  for  cooperative 
procurement.  

The  EU  transfers  Directive  introduces  a  simplified  licencing  system  for  intra-EU 
transfers  of  defence-related  products,  including  through  General  Transfer  Licences 
(GTLs).  Its  evaluation51  shows  that,  despite  its  positive  contribution  to  increased 
transparency and costs savings for companies, different licencing systems across Europe 
still  exist,  with  large  variations  in  the  content  of  GTLs  and  differences  in  the  national 
requirements  for  companies'  certification  and  different  use  of  exceptions.  Furthermore, 

49  Report  from  the  Commission  to  the  European  Parliament  and  the  Council  on  the  implementation  of 
Directive  2009/81/EC  on  coordination  of  procedures  for  the  award  of  certain  works  contracts,  supply 
contracts and service contracts by contracting authorities or entities in the fields of defence and security.  
50 In 2014, 77.9% of all equipment procurement took place at national level, thereby depriving countries of 
the cost savings that come with scale Source: EDA Defence booklet data 2014 with estimates on 2015. 
51  Report  from  the  Commission  to  the  European  Parliament  and  the  Council  on  the  implementation  of 
Directive 2009/43/EC simplifying terms and conditions of transfers of defence-related products within the 
Community. 

14 

 
 
                                                 
most  Member  States  have  not  implemented  the  exception  from  prior  authorisation  and 
transfers  for  collaborative  programmes.  The  Commission  will  focus  on  the  effective 
implementation  of  the  Directive,  including  through  enforcement.  Together  with  this 
Action  Plan,  two  recommendations  are  adopted  to  encourage  a  harmonised  functioning 
of the GTLs for armed forces and for certified enterprises. In addition, the Commission 
will  explore  further  harmonisation  of  the  remaining  two  GTLs,  simplify  certification 
where possible, and promote its take-up across Member States. 

The Commission will focus on the effective implementation of the two defence Directives, 
including  through  enforcement.  Starting  with  the  adoption  of  the  Action  Plan,  it  will 
clarify  the  interpretation  of  specific  provisions  of  the  defence  procurement  Directive 
through the adoption of guidance notices in 2017-18 and adopt recommendations for a 
harmonised functioning of General Transfer Licences in the first quarter of 2018. 

Strengthening security of supply 

Security of supply is also a cornerstone to the establishment of a genuine single market 
for  defence  and  is  key  to  future  cooperative  programmes.  Member  States  need  to  be 
confident  that  cross-border  deliveries  will  not  be  disrupted.  Strengthening  security  of 
supply at EU level implies enhancing mutual trust among Member States. 

Certain  measures,  such  as  contract  performance  conditions,  can  help  strengthen  mutual 
trust  among  Member  States  regarding  transfers  of  defence-related  products.  The 
Commission  will  therefore  issue  guidance  on  measures  that  Member  States  can  take 
under EU public procurement law to reinforce security of supply. 

The  Commission  supports  the  initiative  of  Member  States,  through  the  EDA,  for  a 
political  commitment  to  facilitate  transfers  of  defence-related  and  to  provide  mutual 
assistance  in  times  of  crisis.  The  Commission  takes  note  of  Member  States’ 
unwillingness  to  go  beyond  such  a  political  commitment  at  this  stage  and  agree  on  an 
EU-wide regime on Security of Supply.  

The  Commission  will,  within  the  framework  of  the  EU  Raw  Materials  Strategy52, 
identify  bottlenecks  and  supply  risks  linked  to  the  materials  that  are  necessary  for  the 
development of key capabilities building on the findings of a recent study5354. Future EU 
research programmes could also be used to mitigate supply risks, including substitution 
of critical raw materials, building on the work in the area of Key Enabling Technologies 
(KETs).  

Finally,  the  Commission's  Circular  Economy55  principles,  i.e.  new  technological 
solutions and business models with more sustainable production, consumption and waste 
management, should also be applied to the defence sector, in which resource efficiency 

52 Communication from the Commission to the European Parliament, the Council, the European Economic 
and  Social  Committee  and  the  Committee  of  the  Regions  making  raw  materials  available  for  Europe's 
future well-being -proposal for a European innovation partnership on raw materials, COM/2012/082 final. 
53  Pavel,  C.  and  Tzimas,  E.,  Raw  materials  in  the  European  defence  industry.  Luxembourg,  European 
Commission, Joint Research Centre (JRC), 2016. 
54 E.g. beryllium  is used in missiles, fighter jets, helicopters and satellites (because it is six times lighter 
and stronger than steel). 
55 Communication from the Commission to the European Parliament, the Council, the European Economic 
and  Social  Committee  and  the  Committee  of  the  Regions:  Closing  the  loop  -  An  EU  action  plan  for  the 
Circular Economy, COM/2015/0614.  

15 

 
                                                 
and  security  of  supplies  are  increasingly  important.  In  addition,  there  are  potentially 
major  savings  through  greater  use  of  energy  efficiency  measures  and  of  renewable 
energy in the EU armed forces, which are major consumer of energy.  

Improve cross-border market access for SMEs in the defence sector 

Fostering cross-border market access, and the opening of supply chains, is crucial for an 
efficient  and  effective  European  Defence  Equipment  Market,  while  ensuring  respect  of 
contractor's commercial freedom. In particular, as regards sub-suppliers, which are often 
SMEs, there is a need to ensure a fair chance to access defence supply chains, regardless 
of their location within the Single Market.  

There are no “miracle solutions” to this complex issue, but gradual progress is  needed. 
Based on the report of the ad hoc expert group with Member States and the industry56, 
the  Commission  will  make  recommendations  to  encourage  procurement  authorities  to 
facilitate cross-border and SMEs participation in defence procurement procedures57 and 
prime  contractors  to  give  opportunities  to  sub-suppliers  and  SMEs  from  all  Member 
States  to  access  their  supply  chains58.  The  Commission’s  recommendations  should  be 
complemented  by  voluntary  instruments,  signed  by  relevant  parties,  including  prime 
contractors and business associations. 

The  Commission  will  adopt  recommendations,  by  the  end  of  2017,  encouraging 
procurement  authorities  to  facilitate  cross-border  and  SME  participation  in  defence 
procurement procedures and facilitate their access to defence supply chains. 

Standardisation and conformity assessment 

Certification  and  standardisation  are  critical  enablers  for  cooperation  as  they  reinforce 
interoperability  and  lead  to  cost  savings.  The  EDA  already  supports  Member  States  to 
develop a common approach to airworthiness certification through the European Military 
Airworthiness Requirements (EMARs) initiative. 

The Commission has developed the concept of "hybrid standards" for dual-use59 products 
the  Communication  on 
to  support  security-related  research.  In 
cybersecurity60,  the  Commission,  in  cooperation  with  Member  States  and  industry,  is 
developing  a  European  certification  framework61  and  explores  a  voluntary  labelling 

implementing 

56  European  Commission  Advisory  group  on  cross-border  access  for  SMEs  to  defence  and  security 
contracts, Final report and recommendations. 
57 E.g. providing early information about long-term plans and priorities, using pre-procurement advertising, 
designing public procurement procedures to facilitate cross-border and SMEs participation. 
58  E.g.  transparent  strategic  long-term  plans,  pre-procurement  and  subcontracting  advertising,  EU-wide 
market  searches  and  scouting  to  identify  potential  suppliers  across  different  Member  States,  being 
transparent about the cross-border elements of their supply chains. 
59 Security Industrial Policy - Action Plan for an innovative and competitive Security Industry COM(2012) 
417, July 2012. 
60 Communication from the Commission to the European Parliament, the Council, the European Economic 
and Social Committee and the Committee of the Regions: Strengthening Europe's Cyber Resilience System 
and Fostering a Competitive and Innovative Cybersecurity, 5.7.2016, COM(2016)410 final. 
61 In line with the Joint Communication to the European Parliament, the Council, the European Economic 
and Social Committee and the Committee of the Regions: Cybersecurity Strategy of the European Union: 
An Open, Safe and Secure Cyberspace, 7.2.2013, JOIN(2013)1. 

16 

 
 
                                                 
framework for the security of ICT products. In view of the synergies between  the civil 
and military sectors, the defence sector could benefit from these developments.  

A  new  mechanism  to  monitor  and  initiate  the  development  of  defence  and  hybrid 
standards was agreed between the Commission, EDA and Member States62. One option 
being explored is the possible development of European standards through the processes 
established by the European Standardisation Organisations63.   

The  Commission,  within  its  competences,  will  consider  supporting  the  development  of 
standards  that  Member  States  have  identified  as  necessary  for  co-operative  projects  in 
priority areas.  

5. Maximising civil/military synergies across EU policies 

There is also a need to increase the coherence and synergies between defence issues and 
other relevant Union policies and sectors, thereby fully exploiting the EU’s added value.  

In  line  with  the  European  Space  Strategy,  investing  in  space  capabilities  will  enable 
Europe's  access  to  space  and  safe  use64,  ensuring  its  freedom  of  action  and  autonomy. 
The Commission is committed to contribute to ensuring the protection and resilience of 
critical European civil and military space infrastructure, enhancing the existing EU space 
surveillance and tracking (SST) support framework65. 

As  underlined  by  the  Space  Strategy,  space  services  can  also  strengthen  the  EU’s  and 
Member  States’  capacity  to  tackle  growing  security  challenges.  The  Commission  will 
seek  to  maximise  synergies  and  complementarity  with  relevant  activities  of  the  EU 
Satellite Centre in the area of space security and defence. 

Under  the  currently  evolving  threat  environment,  the  mismatch  between  governmental 
satellite  communications  (SATCOM)  user  needs,  and  timely  and  appropriate  solutions, 
increasingly  creates  risks  to  key  mission  security  operations  and  infrastructures  of  the 
Union and its Member States. 

The Commission, in  cooperation  with the High Representative,  EDA and the European 
Space  Agency,  is  preparing  an  initiative  to  ensure  reliable,  secured  and  cost-effective 
satellite  communications  services  for  EU  and  national  authorities  managing  security 
critical missions and infrastructures by the end of 2017. 

To improve the EU's ability to respond to evolving security challenges related to border 
the  Commission  will  expand  Copernicus66 
controls  and  maritime  surveillance, 
capabilities taking into account new technological developments in the sector, the need to 

62 https://www.eda.europa.eu/what-we-do/activities/activities-search/materiel-standardisation 
63 Regulation (EU) No 1025/2012 of the European Parliament and of the Council of 25 October 2012 on 
European standardisation (OJ L 316, 14.11.2012, p. 1). 
64 COM(2016) 705 - Communication from the Commission to the European Parliament, the Council, the 
European Economic and Social Committee and the Committee of the Regions. 
65 Decision No 541/2014/EU of the European Parliament and of the Council of 16 April 2014 establishing 
a Framework for Space Surveillance and Tracking Support, OJ L 158, 27.5.2014, p. 227. 
66  Regulation  (EU)  No  377/2014  of  the  European  Parliament  and  of  the  Council  of  3  April  2014 
establishing the Copernicus Programme, OJ L 122, 24.4.2014, p. 44. 

17 

 
 
                                                 
ensure  adequate  level  of  security  of  the  infrastructure  and  services,  the  availability  of 
different  data  sources  and  the  long-term  capacity  of  the  private  sector  to  deliver 
appropriate solutions.  

The  Commission  shall  explore  how  Copernicus  could  cover  further  security  needs, 
including defence. It shall strengthen security requirements and will reinforce synergies 
with non-space observation capabilities in 2018. 

Considering  the  evolving  importance  of  the  cyber  domain  and  its  dual-use  nature, 
synergies should be sought between cyber defence efforts and wider EU cyber security 
policies. The Joint Communication on a Cyber Security Strategy67 sets out measures to 
enhance  the  cyber  resilience  of  IT  systems,  reduce  cybercrime  and  strengthen  EU 
international cyber security policy and cyber defence. Cyber security training should be 
reinforced,  taking  into  account  the  work  of  the  European  Cyber  Crime  Training  and 
Education Group and other similar activities. 

The  Commission  will  work  in  close  cooperation  with  Member  States,  the  High 
Representative and other relevant EU bodies to establish a cyber-training and education 
platform to address the current skills gap in cyber security and cyber defence by 2018. 

In the field of aviation, although Single European Sky68 (SES) and Single European Sky 
Air Traffic Management Research (SESAR)69 are focused on civil aviation's objectives, 
military aviation's needs should be taken into consideration to avoid adverse impacts on 
the  defence  sector.  The  use  of  RPAS  (drones)  for  security  purposes  requires  their 
effective  integration  into  the  aviation  system  based  on,  amongst  other  things,  a 
coordinated  civil-military  effort,  including  of  R&D  programmes.  In  this  respect,  the 
civil/military coordination mechanism between the EDA, the European Aviation Safety 
Agency  and  the  SESAR  Joint  Undertaking  should  help  to  better  exploit  the  results  of 
military  research  activities  in  the  context  of  the  SESAR  2020  programme  and  the 
associated safety rules and standards.  

In  line  with  the  objectives  of  the  EU  Maritime  Security  Strategy70,  dual  use  capability 
solutions can ensure that both military and civilian authorities could benefit from relevant 
technologies,  products  and  services.  Such  solutions  developed  by  the  defence  industry 
could  be  effective  in  addressing  security-related  fields,  such  as  maritime  surveillance, 
risk management and protection of critical infrastructures. 

By  2018,  the  Commission  will,  in  cooperation  with  the  High  Representative,  EDA  and 
Member States, develop specific actions to support a co-ordinated civil military maritime 
security research agenda and interoperable maritime surveillance capabilities. 

67 Joint Communication to the European Parliament and the Council, the European Economic and Social 
Committee and the Committee of the Regions,  Cybersecurity Strategy of the European Union: an Open, 
Safe and Secure Cyberspace, 7.2.2013, JOIN(2013) 1 final. 
68 Regulation (EC) No 549/2004 of the European Parliament and of the Council of 10 March 2004 laying 
down the framework for the creation of the single European sky, OJ L 96, 31.3.2004, p. 1.   
69 Council Regulation (EU) No 721/2014 of 16 June 2014 amending Regulation (EC) No 219/2007 on the 
establishment  of  a  Joint  Undertaking  to  develop  the  new  generation  European  air  traffic  management 
system (SESAR) as regards the extension of the Joint Undertaking until 2024, OJ L 192, 1.7.2014, p. 1. 
70  Joint  Communication  to  the  European  Parliament  and  the  Council  For  an  open  and  secure  global 
maritime domain: elements for a European Union maritime security strategy, 6.3.2014 JOIN/2014/09. 

18 

 
 
 
                                                 
6. Conclusions 

President Juncker called for Europe to strengthen its defence policy. Europe has to take 
responsibility for protecting its interests, values and the European way of life. It is facing 
complex security challenges and no Member State can meet those challenges on its own.  

Within this context, the European Union can complement national efforts and become an 
important security provider in its own right.  The High Representative's  Implementation 
Plan on Security and Defence71 and the related Conclusions adopted by the Council, as 
well  as  this  Action  Plan,  support  the  development  of  key  capabilities  necessary  for  the 
security  of  the  Union  and  its  citizens.  The  Implementation  of  the  EU-NATO  Joint 
Declaration will further contribute to ensuring complementarity with NATO. 

The  Commission  will,  in  close  cooperation  with  Member  States  and  the  High 
Representative,  including  in  her  capacity  as  head  of  EDA,  set  up  an  Implementation 
Steering  Group,  meeting  on  a  regular  basis,  to  monitor  and  facilitate  progress  in  the 
Actions. A first meeting will take place in the first quarter of 2017. It will also establish a 
consultation forum with the European defence industry to best align the supply and the 
demand sides.  

The  Commission  is  ready  to  engage  at  an  unprecedented  level  in  defence  to  support 
Member  States.  It  will  exploit  the  EU  instruments,  including  EU  funding,  and  the  full 
potential of the Treaties, towards building a Defence Union.  

However,  the  adoption  of  this  Communication  by  the  Commission  is  only  a  first  step.  
A strong support from the Member States and EU Institutions will be required to realise 
the full potential of the European Defence Action Plan. The Commission will launch the 
implementation  of  the  ambitious  set  of  actions  set  out  in  this  document.  On  basis  of 
further  discussions  with  other  EU  institutions,  the  Commission  also  stands  ready  to 
facilitate the implementation of the European Defence Fund.  

Based  on  a  strong  and  shared  commitment  between  the  Member  States  and  the 
institutions,  the  European  Defence  Action  Plan  can  become  a  game  changer  for  more 
European defence cooperation and greater solidarity between Member States. 

71 See Foreign Affairs Council Conclusions of 14.11.2016. 

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