Opinion of the European Committee of the Regions – A strong European defence industry
Date: 2025-02-20
Institutions: Commission for Economic Policy, European Committee of the Regions
Subjects: EU industrial policy, European defence policy, European security, Ukraine, common security and defence policy, defence budget, defence expenditure, investment, military cooperation, military equipment








C_202501705EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2025/1705


26.3.2025






Opinion of the European Committee of the Regions – A strong European defence industry
(C/2025/1705)














Rapporteur



:


Fernando LÓPEZ MIRAS (ES/EPP), President of the Region of Murcia





Reference documents



:


Joint Communication A new European Defence Industrial Strategy: Achieving EU readiness through a responsive and resilient European Defence Industry

JOIN(2024) 10 final, 5 March 2024.
Proposal for a Regulation of the European Parliament and of the Council establishing the European Defence Industry Programme and a framework of measures to ensure the timely availability and supply of defence products (EDIP)
COM(2024) 150 final, 5 March 2024.








I.   RECOMMENDATIONS FOR AMENDMENTS


Amendment 1

Recital (13)






Text proposed by the European Commission


CoR amendment




The possibilities provided for in Article 73(4) of Regulation (EU) 2021/1060 of the European Parliament and of the Council could be applied provided that the project complies with the rules set out in that Regulation and the scope of the European Regional Development Fund and the European Social Fund Plus as set out in Regulations (EU) 2021/1058 and (EU) 2021/1057 of the European Parliament and of the Council, respectively. This could, in particular, be the case where the production of relevant defence products faces specific market failures or suboptimal investment situations in the Member States’ territories, notably in vulnerable and remote areas, and such resources contribute to the achievement of the objectives of the programme from which they are transferred. In line with Article 24 of Regulation (EU) 2021/1060, the Commission is to assess the amended programmes submitted by the Member State and make observations within two months of the submission of the amended programme.


The possibilities provided for in Article 73(4) of Regulation (EU) 2021/1060 of the European Parliament and of the Council could be applied provided that the project complies with the rules set out in that Regulation and the scope of the European Regional Development Fund and the European Social Fund Plus as set out in Regulations (EU) 2021/1058 and (EU) 2021/1057 of the European Parliament and of the Council, respectively. This could, in particular, be the case where the production of relevant defence products faces specific market failures or suboptimal investment situations in the Member States’ territories, notably in vulnerable and remote areas 
as well as in regions that are more exposed to the risk of conventional or non-conventional military threats materialising
, and such resources contribute to the achievement of the objectives of the programme from which they are transferred. In line with Article 24 of Regulation (EU) 2021/1060, the Commission is to assess the amended programmes submitted by the Member State and make observations within two months of the submission of the amended programme. 
In any case, the funds covered by Regulation (EU) 2021/1060 should, where appropriate, clearly contribute to EU measures aimed at strengthening the EU’s economic, social and territorial cohesion, in accordance with Article 174 TFEU.








Reason


Cohesion policy should focus on its objectives aimed at strengthening economic, social and territorial cohesion, always with the ultimate goal of reducing disparities between regions. Paying special attention to those regions most exposed to potential risks, involving all types of threats, is also key.

Amendment 2

Recital (14) (new)






Text proposed by the European Commission


CoR amendment




 




In the same spirit of pooling efforts and working together to improve the autonomy, competitiveness and efficiency of the defence industry and contribute adequately to the programme’s implementation, efforts should be made to involve regional and local innovation and business development bodies by harnessing their potential to boost regional ecosystems.








Reason


Currently, the defence industry’s ecosystem is dependent on (basic) raw materials from outside the EU. This dependency is often not sufficiently recognised.

Amendment 3

Recital (19)






Text proposed by the European Commission


CoR amendment




The Programme should provide financial support, via means provided for in the Regulation (EU, Euratom) No 2018/1046, to actions contributing to the timely availability and supply of defence products such as cooperation for common procurement of public authorities, industrial coordination and networking activities including reservation and stockpiling of defence products, access to finance for undertakings involved in the manufacturing of relevant defence products, reservation of manufacturing capacities (‘ever warm facilities’), industrial processes of reconditioning of expired products, expansion, optimisation, modernisation, upgrading or repurposing of existing, or the establishment of new, production capacities in that field as well as the training of personnel.


The Programme should provide financial support, via means provided for in the Regulation (EU, Euratom) No 2018/1046, to actions contributing to the timely availability and supply of defence products such as cooperation for common procurement of public authorities, industrial coordination and networking activities including reservation and stockpiling of defence products, access to finance for undertakings involved in the manufacturing of relevant defence products, 
support for the revitalisation of regional defence industry ecosystems and the adoption of specific measures to support small and medium-sized enterprises,
 reservation of manufacturing capacities (‘ever warm facilities’), industrial processes of reconditioning of expired products, expansion, optimisation, modernisation, upgrading or repurposing of existing, or the establishment of new, production capacities in that field as well as the training of personnel.






Reason


The aim is to support bodies that can have a multiplier effect on national and European efforts, reaching a maximum number of small players, complementing efforts on the ground and promoting cooperation between SMEs and large companies.

Amendment 4

Recital (24)






Text proposed by the European Commission


CoR amendment




When assessing proposals submitted by applicants, the Commission should pay particular attention to their contribution to the objectives of the Programme. The proposals should be assessed, in particular, against their contribution to the increase in defence industrial readiness, in particular increasing production capacities and eliminating bottlenecks. They should also be assessed against their contribution to fostering defence industrial resilience, by reference to considerations such as timely availability and supply to all locations, strengthening security of supply throughout the Union in response to identified risks, including in particular to those Member States most exposed to the risk of materialisation of conventional military threats. Assessments should also refer to the contribution to defence industrial cooperation through genuine armament cooperation among Member States, associated countries and Ukraine and the development and the operationalisation of cross-border cooperation of undertakings, in particular, to a significant extent, small and medium-sized enterprises (SMEs) and small middle capitalization companies (small mid-caps) operating in the supply chains concerned.


When assessing proposals submitted by applicants, the Commission should pay particular attention to their contribution to the objectives of the Programme. The proposals should be assessed, in particular, against their contribution to the increase in defence industrial readiness, in particular increasing production capacities and eliminating bottlenecks. They should also be assessed against their contribution to fostering defence industrial resilience, by reference to considerations such as timely availability and supply to all locations, strengthening security of supply throughout the Union in response to identified risks, including in particular to those Member States most exposed to the risk of materialisation of conventional 
or non-conventional
 military threats. Assessments should also refer to the contribution to defence industrial cooperation through genuine armament cooperation among Member States, associated countries and Ukraine and the development and the operationalisation of cross-border cooperation of undertakings, in particular, to a significant extent, small and medium-sized enterprises (SMEs)
, including start-ups and scale-ups,
 and small middle capitalization companies (small mid-caps) operating in the supply chains concerned.






Reason


Both the innovative nature and adaptability of start-ups and scale-ups and their important role in promoting cross-border cooperation and securing supply chains should be taken into account. All kinds of threats need to be addressed.

Amendment 5

Recital (40)






Text proposed by the European Commission


CoR amendment




A SEAP could qualify for funding in accordance with Title VI of the Regulation (EU, Euratom) No 2018/1046. Funding under the Cohesion Policy could also be possible, in conformity with the relevant Community legislation.


A SEAP could qualify for funding in accordance with Title VI of the Regulation (EU, Euratom) No 2018/1046. Funding under the Cohesion Policy could also be possible, in conformity with the relevant Community legislation
, provided that it contributes to its objectives of economic, social and territorial cohesion, paying specific attention to those regions most exposed to conventional or non-conventional military threats
.






Reason


Cohesion funding should always contribute to territorial cohesion and support regional ecosystems. All kinds of threats need to be addressed. This applies to all regions.

Amendment 6

Recital (55) (new)






Text proposed by the European Commission


CoR amendment




 




To contribute to achieving the programme’s objectives and ensure coordinated and effective action, pooling all existing capabilities linked to the objective of supporting industry in adapting to structural changes, boosting capabilities and opening up supply chains, particularly as regards SMEs, the Defence Industrial Preparedness Board shall ensure that representatives of regional ecosystems are involved in the structured dialogue with the defence industry. The ultimate objective shall be to promote value-added communication channels in order to reach all industry players, from the smallest to the largest, so as to boost crisis preparedness.








Reason


The envisaged structural changes for industry require support from all quarters. It is essential to have local and regional authorities whose competences, remit and activities include supporting industry and SMEs.

Amendment 7

Article 7(3)






Text proposed by the European Commission


CoR amendment




In accordance with the relevant provisions of Regulation (EU) 2021/1060, the ERDF or ESF+ may support proposals submitted to a call for proposals under the Programme, which were awarded a Seal of Excellence in accordance with the Programme.


In accordance with 
Article 174 TFEU and
 the relevant provisions of Regulation (EU) 2021/1060, the ERDF or ESF+ may support proposals submitted to a call for proposals under the Programme, which were awarded a Seal of Excellence in accordance with the Programme.






Reason


It should be borne in mind that priority should be given to measures aimed at achieving cohesion policy objectives that seek to strengthen economic, social and territorial cohesion.

Amendment 8

Article 11(4)






Text proposed by the European Commission


CoR amendment




Activities aiming at supporting the deployment of a European Defence Project of Common Interest.


Activities aiming at supporting the deployment of a European Defence Project of Common Interest
, including those relating to dual-use technologies
.






Reason


At a time when the defence sector is drawing on civil innovation (including, among other things, commercial-off-the-shelf electronic components), all dual-use technologies and components are acquiring a hitherto unknown importance. The technological and industrial benefits arising from the development of dual-use technologies should be vigorously exploited by strengthening the synergies of all EU support programmes and instruments in line with the White Paper on options for enhancing support for research and development involving technologies with dual-use potential (1).

Amendment 9

Article 11(5)(b)






Text proposed by the European Commission


CoR amendment




activities to strengthen security of supply and resilience, in particular by facilitating the access to the defence market for SMEs, small mid-caps, other mid-caps 
and
 start-ups and support to obtain the necessary quality and production certifications;


activities to strengthen security of supply and resilience, in particular by facilitating the access to the defence market for SMEs, small mid-caps, other mid-caps
,
 start-ups 
and scale-ups
 and support to obtain the necessary quality and production certifications;






Reason


The key role of scale-ups needs to be highlighted.

Amendment 10

Article 15(2)(a)






Text proposed by the European Commission


CoR amendment




The Commission shall, when identifying projects referred to in paragraph 1:


The Commission shall, when identifying projects referred to in paragraph 1:




duly consider the guidance provided in the context of the Defence Industrial Readiness Board, in particular the contribution of the project to the capability priority identified in the context of the CFSP, notably of the Capability Development Plan, and the objectives of the Strategic Compass for security and defence;


duly consider the guidance provided in the context of the Defence Industrial Readiness Board, in particular the contribution of the project to the capability priority identified in the context of the CFSP, notably of the Capability Development Plan, 
the Coordinated Annual Review on Defence, Permanent Structured Cooperation projects,
 and the objectives of the Strategic Compass for security and defence;






Reason


The European Union should ensure the efficient and effective management of existing resources when identifying and selecting European projects of common interest in the field of defence. To this end, account should be taken of all existing initiatives aimed at identifying defence priorities and needs, ensuring that initiatives are properly aligned and avoiding any duplication of effort.

Amendment 11

Article 41(3)






Text proposed by the European Commission


CoR amendment




The Commission may invite, after consulting the Defence Industrial Readiness Board, key market actors referred to in Article 42, Member States, national defence industry associations and other relevant stakeholders to provide information, on a voluntary basis, for the purpose of carrying out monitoring activities in accordance with paragraph 1, first subparagraph, point (a).


The Commission may invite, after consulting the Defence Industrial Readiness Board, key market actors referred to in Article 42, Member States, 
relevant subnational entities, where applicable within the framework of the relevant national legal system,
 national defence industry associations and other relevant stakeholders to provide information, on a voluntary basis, for the purpose of carrying out monitoring activities in accordance with paragraph 1, first subparagraph, point (a).






Reason


Given the asymmetries SMEs face when it comes to accessing information on finance, subnational entities serve as indispensable contact points helping to bridge the gap between SMEs and EU programmes.

Amendment 12

Article 57(10)






Text proposed by the European Commission


CoR amendment




The Defence Industrial Readiness Board shall invite, at least once a year, representatives from National Defence Industrial Associations and selected industrial representatives, taking into account the necessity to ensure a balanced geographical representation (structured dialogue with defence industry). Where the supply crisis state referred to in Article 44 or the security supply crisis state referred to in Article 48 has been activated, the Defence Industrial Readiness Board shall invite high-level industrial representatives to meet in special configuration in order to discuss issues linked to crisis-relevant products.


The Defence Industrial Readiness Board shall invite, at least once a year, representatives from National Defence Industrial Associations and selected industrial representatives, 
ensuring sufficient involvement of representatives of regional ecosystems and the European Network of Defence Regions (ENDR) and
 taking into account the necessity to ensure a balanced geographical representation (structured dialogue with defence industry). Where the supply crisis state referred to in Article 44 or the security supply crisis state referred to in Article 48 has been activated, the Defence Industrial Readiness Board shall invite high-level industrial representatives to meet in special configuration in order to discuss issues linked to crisis-relevant products.






Reason


All relevant stakeholders from the defence sector should, in line with their areas of expertise, be able to contribute on issues where they can add value by virtue of their proximity to the regional and local defence ecosystem, as well as ensuring that small and medium-sized enterprises are adequately represented and visible.

Amendment 13

Article 57(10a)






Text proposed by the European Commission


CoR amendment




 




10a The Defence Industrial Readiness Board shall invite, at least once a year, a special configuration of representatives of the Committee of the Regions, in order to address issues relating to industrial preparedness and supply chain security, priority areas for funding and any other matters of interest, taking into account their role as intermediaries with links to the industrial sector in their area of competence.








Reason


All relevant players in the defence sector should, in line with their areas of expertise, be able to contribute on issues where they can add value by virtue of their proximity to the regional and local defence ecosystem.

Amendment 14

Article 65(4)






Text proposed by the European Commission


CoR amendment




Financial resources allocated to the Programme may contribute to the organisation of dissemination activities, match-making events and awareness-raising activities, in particular aiming at opening up supply chains to foster the cross-border participation of SMEs.


Financial resources allocated to the Programme may contribute to the organisation of dissemination activities, match-making events and awareness-raising activities, in particular aiming at opening up supply chains to foster the cross-border participation of SMEs. 
This is particularly relevant for the FAST programme, under which regions will have a critical role to play in reaching out to SMEs in their regional ecosystems.








Reason


Better communication with SMEs is key to ensuring the latter’s involvement in EU defence supply chains.
II.   POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS (CoR)








1.


welcomes the European Defence Industry Strategy (EDIS) and the accompanying proposal for a Regulation establishing a European Defence Industry Programme (EDIP), aimed at fostering a strong defence industry in the European Union and Ukraine;












2.


welcomes the European Commission’s increased focus on enhancing Europe’s security and preparedness; reiterates its call for increased attention to the concept of comprehensive security and security of supply across the EU and for the Commission to conduct a coordinated, continuous evaluation of all policy sectors to strengthen the preparedness for future shocks (2);












3.


recognises the urgent need to increase investments in Europe’s defence industrial readiness and to drive the defence package forward, but regrets the fact that no impact assessment or formal consultation has been carried out as part of its preparation, in line with the principles of better regulation, active subsidiarity, partnership and multi-level governance (3);












4.


notes that the EU’s Defence Technological and Industrial Base (EDTIB) includes many SMEs and start-ups from across the EU; these are a key component of the EU’s defence preparedness and need to be properly integrated into defence industry supply chains;












5.


stresses that the EU needs a strong defence supply chain across all regions, with a specific focus on those regions that are most exposed to conventional or non-conventional military threats; reiterates the need to pay particular attention to the defence capabilities of regions located in Member States with external borders and especially the border regions which have existing regional clusters relevant for EU defence for historical reasons (4) and vulnerable critical logistics infrastructure;












6.


highlights the added value of logistical chains and production to be dispersed among multiple smaller producers to ensure resilience also in times of voluntary and involuntary disruption. Underlines that SMEs can play a crucial role in ensuring that the EU’s resilience in defence is strengthened;












7.


advocates a key role for regions and regional and local business development and innovation organisations when it comes to mobilising SMEs and driving defence projects and dual-use technologies as well as in enhancing public-private collaboration and the skills, specialisation and talent needed to strengthen the EDTIB; in this regard, stresses the role of universities and the need for close cooperation with businesses;












8.


believes that future defence industry support programmes should include specific measures aimed at revitalising clusters in regions specialising in the defence industry, dual technologies or related industries such as semiconductors and electronics manufacturing, while also strengthening critical supply chains for defence materials to ensure resilience and sustainability in the European Defence Technological and Industrial Base; also highlights the need for enhanced EU cooperation on production by encouraging European companies to increase cooperation and thereby strengthen the role of European subcontractors in the production processes;












9.


reinforces that all defence-related production facilities must prioritise integrating environmental and biodiversity sustainability measures, aligning with the EU’s Green Deal objectives, and actively work towards decarbonisation and resource efficiency across the defence supply chain while still ensuring a competitive EU security and defence industry;












10.


points out that many regional and local authorities in the EU have relevant competences in the area of town and country planning and land use, and that they need to be involved in building facilities linked to the production, testing and certification of defence equipment; it is important to ensure that these facilities meet sustainability and environmental standards;












11.


calls on the Commission to ensure that the Defence Industrial Preparedness Board involves regional ecosystems in the dialogue with the defence industry, ensuring coordinated action to prepare the industry for change, enhance its capabilities and integrate SMEs into supply chains, while ensuring transparency and ethical considerations in all partnerships;





Support for businesses: specialisation, research and innovation









12.


welcomes the programme’s particular focus on SMEs and small mid-caps, helping them to access finance, break into defence industry supply chains, obtain quality and production certificates and upskill their staff; underlines the importance of promoting a more integrated internal market for defence goods and EU support for coordinated research and development;












13.


reminds the Commission of the importance of implementing the principles of the European Commission’s Better Regulation Agenda, in particular on impact assessments for all defence-related programmes;












14.


emphasises the importance of supporting the innovative potential of SMEs and calls on the Commission to ensure that they are properly involved in support instruments such as the European Defence Fund (EDF), the EU Defence Innovation Scheme (EUDIS) and the Defence Equity Facility, the Hub for EU Defence Innovation (HEDI), Horizon Europe and the European Defence Industry Programme (EDIP);












15.


stresses the need to ensure SMEs do not face asymmetries when it comes to accessing information, and reaffirms the key role regional authorities play in channelling such information and advising companies on how to take advantage of EU funding instruments and programmes;












16.


stresses the importance of promoting support platforms such as the Enterprise Europe Network (EEN) and the European Network of Defence-Related Regions (ENDR), which promote the ‘preparedness culture’ of defence SMEs, as well as helping them grow and become more international, while fostering dual-use technologies to serve both civilian and military needs;












17.


advocates increased support for dual-use technologies, with a focus on solutions for civilian needs such as disaster relief, climate adaptation, and critical infrastructure protection, while maintaining compatibility with defence requirements;












18.


calls for a reduction in the regulatory burden and the simplification of administrative procurement processes in the area of defence, dual-use technologies, and intellectual and industrial property, taking into account the specificities of small and medium-sized enterprises;












19.


believes that specific support should be provided for the transition between the initial defence research and development phases and the marketing phase (Death Valley);












20.


welcomes the goal of jointly procuring at least 40 % of defence equipment by 2030, and at the same time stresses the need for closer cooperation with NATO partners in order to maximise interoperability;












21.


recommends that any expanding of funding schemes to bridge the gap between research, development and deployment phases of defence innovations pay particular attention to projects promoting sustainability, ethical compliance and dual-use potential;












22.


draws attention to the ability of defence start-ups and SMEs and dual-use technologies to respond quickly to new scenarios, which justifies providing targeted support to unlock their full potential;












23.


calls for targeted investment in green defence technologies, such as renewable energy systems, sustainable materials, and circular economy principles, to reduce environmental impacts and enhance technological sovereignty within the EU;












24.


agrees with the Niinistö Report (5) concerning the need to strengthen R&D&I in dual defence-related technologies, in order to reduce dependencies and protect the EU from technology leakage;












25.


stresses the opportunities artificial intelligence (AI) can bring to the European Defence Industry in the future. Underlines the particular need to ensure the ethical use of AI when it is used in defence industry products;












26.


supports the Commission’s efforts (6) to identify how regional innovation policies can have an effective impact on the defence and dual-use technology industries, thereby contributing to European sovereignty; encourages further exploration on how to enhance the synergies and better integrate defence and dual-use technology industries into regional development and different EU policies and funding instruments;





Sufficient funding to support efforts to strengthen the EDTIB









27.


believes that a well-prepared and resilient defence industry requires investment commensurate with the challenge at hand. The next multiannual financial framework (MFF) should reflect this ambition in a credible way by providing an additional, dedicated budget to finance the proposed new measures. Financing from budgetary allocations which are intended for other policies is not acceptable, while fragmentation of the different instruments should be avoided;












28.


stresses that cohesion policy contributes to promoting regional industrial and innovation policies by supporting measures that are aligned with the objectives and priorities set out in Article 174 TFEU and Regulation (EU) 2021/1060, and insists (7) that the EU’s new priorities require a separate additional budget that does not affect cohesion policy allocations;












29.


calls for any transfer of cohesion policy funds to finance EDIP projects to focus on projects that cannot be financed under the shared management of cohesion policy and that support regions’ territorial, economic and social cohesion, particularly existing regional defence or dual-use clusters or clusters relating to items needed to maintain military capabilities, and regions that are more exposed to the risk of conventional or non-conventional military threats;












30.


stresses that any transfer between funds must respect the principles of subsidiarity and multilevel governance and should not weaken the place-based approach (8), and stresses that territorial impact assessments are the best tool for implementing the principles of ‘do no harm to cohesion’ and ‘active subsidiarity’ (9);












31.


supports the new mandate of the European Investment Bank (EIB) to contribute to strengthening the European defence industry, and stresses the need for further work to identify areas where the EIB could finance defence-related activities as well as the appropriate mechanisms for implementing such funding; considers it essential for the EIB to make appropriate programmes and funding instruments available as soon as possible to directly finance defence start-ups and defence innovation;












32.


Underlines the importance of parliamentary scrutiny and stresses that the European Parliament should, alongside national parliaments, guarantee the parliamentary oversight of the EU Common Security and Defence Policy and its budget.






Brussels, 20 February 2025.


The President


of the European Committee of the Regions

Kata TÜTTŐ
               





(1)  
            https://eur-lex.europa.eu/legal-content/EN/TXT/DOC/?uri=CELEX:52024DC0027.

(2)  ECON-VII/039. Shock-proofing European regions: Strengthening local and regional economic resilience in the strategic evolution of the Single Market.

(3)  COTER-VII/041. EU budget and place-based policies: proposals for new design and delivery mechanisms in the MFF post-2027.

(4)  ECON-VI/028. Proposal for a European Defence Fund.

(5)  
            Safer Together Strengthening Europe’s Civilian and Military Preparedness and Readiness.

(6)  More information on Dual Use & Defence Innovation Leveraging Regional Industrial Development (European Commission)

(7)  Op. cit.

(8)  COTER-VI/045. Common Provisions Regulation.

(9)  CIVEX-VII/029. Active subsidiarity: a fundamental principle in the EU better regulation agenda.


ELI: http://data.europa.eu/eli/C/2025/1705/oj
ISSN 1977-091X (electronic edition)