EU Ambassadors Strike Preliminary Deal on EDIP Defence Spending Plan

On the 18th June, EU ambassadors reached a preliminary agreement on the €1.5 billion European Defence Industry Programme (EDIP), aimed at reducing the bloc’s reliance on foreign, especially American, defence suppliers. The plan supports joint procurement across EU states to streamline costs and foster a more integrated European defence industrial base.

While the UK is not part of the EU, the outcome of EDIP will be closely watched in Westminster and Whitehall. It marks a significant step in the EU’s drive for strategic autonomy in defence, which has the potential to impact UK based firms with operations or partnerships on the continent. The draft rules cap non-EU components at 35% and require that EU companies retain modification rights, limiting the role of external players like the U.S. and, by extension, some UK linked defence supply chains.

A key point of contention has been eligibility. France and its allies favour restricting access to EU-based and closely allied countries  (like Ukraine), while pro-U.S. countries including the Nordics, Baltic’s, and Netherlands pushed for flexibility to include American suppliers, especially given NATO’s urgent air defence needs and Europes continued reliance on U.S. technology.

Despite concerns, a group of countries (including the Baltics, Czech Republic, Romania, and Slovakia) agreed not to block the deal, even as they warned that rigid eligibility rules could disrupt supply chains and delay urgent defence production.

Though modest in size, EDIP could expand significantly, with possible future funding redirected from the EU’s pandemic recovery fund. The programme is expected to set a precedent for future EU defence budgets, with formal negotiations with the European Parliament concluding under Denmark’s EU presidency later this year.