The European Defence Fund is a financial mechanism designed to enable and accelerate cooperation among Member States to better coordinate, supplement and amplify national investments in defence. Through the co-funded European Defence Fund, Member States will be able to achieve greater output and develop defence technology and equipment that may not be feasible on their own. The Fund will also foster innovation and allow economies of scale, which will enhance the competitiveness of the EU defence industry.
The Fund will be divided into two windows - the Research Window and the Capability Window. As part of the negotiations on the Multi-annual Financial Framework 2021-2027 a final budget which translates into a current value of just under €8 billion was agreed in July this year. It will be split between a research budget of €2.651 billion, and a capability budget of €5,302 billion.
It should be noted that the EDF is an industrial sectorial programme, providing funding for research and capability development, which supports the European Defence and Industrial Technology Base in delivering capabilities for Common Security Defence Policy operations. In that regard, it is similar to other EU industry and research support programmes, such as Horizon 2020 also funded from the MFF.
The Regulation establishing the European Defence Fund is very clear that it will not financially support products or technologies where the use, development or production of which are prohibited by international law.
In order for us to have a well-equipped, capability driven Defence Forces, we require advanced equipment which incorporates the latest technology, alongside a more efficient and less fragmented industrial sector which can produce that equipment.
The EDF has the potential to offer significant funding opportunities for Irish enterprise and research institutes engaged in research and innovation that could be applied to the defence sector. Irish-based organisations accessed a significant level of funding under the European Commission’s Horizon 2020 fund in the civil security work programme. These organisations are involved in nanotechnologies, data analytics, artificial intelligence, digitalisation, and are potentially well positioned to access the funding under the EDF.
During the negotiations of the EDF regulation, Ireland strongly advocated to ensure that Irish interests, particularly in the area of opportunities for SMEs were strongly represented. My Department will continue to work closely with colleagues in the Department of Business, Enterprise and innovation in this regard.