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Defence industry: Commission kick-starts European Defence Fund with €1.2 billion and awards 26 new industrial co-operation projects for more than €158 million

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The Commission has adopted a package of decisions supporting the competitiveness and innovation capacity of the EU defence industry. The adoption of the first European Defence Fund (EDF) annual work programme paves the way to the immediate launch of 23 calls for proposals for a total of €1.2 billion of EU funding in support of collaborative defence research and development projects. Furthermore, under the EDF's precursor programme, the European Defence Industry Development Programme (EDIDP), 26 new projects with a budget of more than €158 million were selected for funding. In addition, two major capability development projects received today a directly awarded grant of €137m under the EDIDP.

A Europe Fit for the Digital Age Executive Vice President Margrethe Vestager said: “The European Defence Fund now plays a key role in making defence industrial co-operation in Europe a permanent reality. This will foster the EU's competitiveness and contribute to achieving our technological ambitions. With significant participation of companies of all sizes and from across the EU, the Fund provides great opportunities to foster innovation and cutting edge capabilities. 30% of funding going to small and medium sized enterprises is a very promising start.”

Internal Market Commissioner Thierry Breton said: “In 2021, the European Defence Fund is coming to life. With the EU's first-ever dedicated defence programme, European cooperation in defence will become the norm. Public authorities will spend better together, and companies - big or small - from all member states will benefit, resulting in more integrated European defence industrial value chains. In 2021 alone, the EDF will finance up to EUR 1.2bn in high-end defence capability projects such as the next generation of aircraft fighters, tanks or ships, as well as critical defence technologies such as military cloud, AI, semiconductors, space, cyber or medical counter measures.”

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2021 EDF work programme: A step change in ambition

During the first year, the EDF will co-finance large-scale and complex projects for a total amount of €1.2bn. To finance this ambitious roll-out, the 2021 EDF budget of €930m has been complemented with a ‘top-up' of €290m from the 2022 EDF budget. This will allow to kick-start large-scale and ambitious capability development projects while ensuring broad thematic coverage of other promising topics.

With the objective of reducing fragmentation of the EU defence capabilities, enhancing competitiveness of the EU defence industry and the interoperability of products and technologies, the 2021 EDF work programme will incentivise and support a number of capability development and standardisation projects.

In the first year, the EDF will allocate around €700m to the preparation of large-scale and complex defence platforms and systems such as next generation fighter systems or ground vehicles fleet, digital and modular ships, and ballistic missile defence.

Around €100m will be dedicated to critical technologies, which will enhance the performance and resilience of defence equipment such as artificial intelligence and cloud for military operations, semiconductors in the field of infrared and radiofrequency components.

The EDF will also increase synergies with other civilian EU policies and programmes, notably in the field of space (around €50m), medical response (around €70m), and digital and cyber (around €100m). This aims to foster cross-fertilisation, enable the entry of new players and reduce technological dependencies.

The Fund will spearhead innovation through more than €120m allocated to disruptive technologies and specific open calls for SMEs. It will foster game-changing innovations, notably in quantum technologies, additive manufacturing and over the horizon radar, and tap into promising SMEs and start-ups.

Outcome of the 2020 EDIDP: 26 new projects and two direct awards

The final EDIDP financing cycle resulted in the award of support to the development of a number of new defence capabilities in areas as diverse and complementary as maritime security, cyber situational awareness or ground and air combat.

In particular, 26 new projects with a budget of more than €158m were selected for funding, with a major focus on surveillance capacities (both space-based and maritime capacities), resilience (Chemical Biological Radiological Nuclear detection, Counter-Unmanned Air System) and high-end capabilities (precision-strike, ground combat, air combat).

The 2020 EDIDP cycle confirms also this year the fit-for-purpose model of the European Defence Fund, namely:

  • Highly attractive programme: 63 proposals competing in the calls involving more than 700 entities;
  • Reinforced defence cooperation: on average, 16 entities from seven member states participating in each project;
  • Wide geographical coverage: 420 entities from 25 member states participating in the projects;
  • Strong involvement of SMEs: 35% of the entities and benefit from 30% of the total funding;
  • Consistency with other EU defence initiatives: notably the Permanent Structured Cooperation, with 15 out of 26 projects having PESCO status.

In EDIDP 2020, 10 entities controlled by third countries are involved in selected proposals following valid security-based guarantees.

In addition, two major capability development projects received a total grant of €137m in view of their high strategic importance:

  • MALE RPAS, also known as Eurodrone, supporting the development of a medium-altitude and long-endurance drone (€100m). Together with other selected projects in support of payload for tactical drones, swarm of drones, sensors, low observable tactical systems, more than €135m will be invested to build technological sovereignty in drones, a critical asset for EU armed forces.
  • The European Secure Software-defined Radio (€37m), ESSOR, boosting the EU's armed forces interoperability by creating a European standardisation for communication technologies (software radios). Together with other projects selected in support of secure and resilient communication (with the use of quantum key distribution), optical point to point communication between military platforms and solutions for tactical networks, more than €48m will be invested in secure communication systems.
Background

The European Defence Fund constitutes the Union's flagship instrument to support defence cooperation in Europe and is a stepping stone for EU strategic autonomy. While complementing member states' efforts, the fund promotes co-operation between companies of all sizes and research actors throughout the EU. The Fund has a budget of €7.953bn in current prices, of which roughly one third will finance competitive and collaborative research projects, in particular through grants and two-thirds will complement member states' investment by co-financing the costs for defence capabilities development following the research stage.

The EDF precursor programmes were the European Defence Industrial Development Programme (EDIDP), with €500m for 2019-2020, and the Preparatory Action on Defence Research (PADR), which had a budget of €90m for 2017-2019. Their aim, similarly to that of the European Defence Fund, was to foster an innovative and competitive defence technological and industrial base and contribute to the EU's strategic autonomy. The PADR covered the research phase of defence products, including disruptive technologies, while EDIDP has supported collaborative projects related to development, including design and prototyping.

More information

EDF Factsheet, June 2021

EDF 2021 projects, June 2021

EDIDP 2020 projects, June 2021

One-pagers per EDIDP 2020 projects, June 2021

EU Defence gets a Boost as the EDF becomes a reality, 29 April 2021

DG DEFIS website – European Defence Industry

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Cyber Security

Cybersecurity: All EU member states commit to build a quantum communication infrastructure

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With the latest signature by Ireland of the political declaration to boost European capabilities in quantum technologies, cybersecurity and industrial competitiveness, all Member States have now committed to work together, along with the European Commission and the European Space Agency, to build the EuroQCI, a secure quantum communication infrastructure that will span the whole EU. Such high-performing, secure communications networks will be essential to meeting Europe's cybersecurity needs in the years to come. A Europe fit for the Digital Age Executive Vice President Margrethe Vestager said: “I am very happy to see all EU Member States come together to sign the EuroQCI declaration – European Quantum Communication infrastructure initiative - a very solid basis for Europe's plans to become a major player in quantum communications. As such, I encourage them all to be ambitious in their activities, as strong national networks will be the foundation of the EuroQCI.”

Internal Market Commissioner Thierry Breton added: “As we have recently seen, cybersecurity is more than ever a crucial component of our digital sovereignty. I am very pleased to see that all member states are now part of the EuroQCI initiative, a key component of our forthcoming secure connectivity initiative, which will allow all Europeans to have access to protected, reliable communication services.”

The EuroQCI will be part of a wider Commission action to launch a satellite-based secure connectivity system that will make high-speed broadband available everywhere in Europe. This plan will provide reliable, cost-effective connectivity services with enhanced digital security. As such, the EuroQCI will complement existing communication infrastructures with an additional layer of security based on the principles of quantum mechanics – for example, by providing services based on quantum key distribution, a highly secure form of encryption. You can find more information here.

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Moscow

NATO vs Russia: Dangerous games

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It seems that the Black Sea has recently become more and more an arena of confrontation between NATO and Russia. Another confirmation of this was the large-scale military exercises Sea Breeze 2021, which were recently completed in the region, which Ukraine hosted, writes Alexi Ivanov, Moscow correspondent.

The Sea Breeze — 2021 exercises are the most representative in the entire history of their holding. They were attended by 32 countries, about 5,000 military personnel, 32 ships, 40 aircraft, 18 groups of ground and sea special forces from Ukraine, as well as NATO member and partner countries, including the United States.

The main venue for the exercises was Ukraine, which, for obvious reasons, considers this event as a military and partly political support for its sovereignty, primarily in view of the loss of Crimea and the military—political impasse in the Donbas. In addition, Kiev hopes that hosting such a large-scale event will contribute to the speedy integration of Ukraine into the Alliance.

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A few years ago, the Black Sea Fleet of the Russian Federation was a regular participant in this series of maneuvers. Then they worked out mainly humanitarian tasks, as well as interaction between the fleets of different states.

In recent years, the scenario of the exercises has changed significantly. Russian ships are no longer invited to them, and the development of actions to ensure air and anti — submarine defense and amphibious landings-typical naval combat operations-has come to the fore.

The scenario announced this year includes a large-scale coastal component and simulates a multinational mission to stabilize the situation in Ukraine and confront illegal armed groups supported by a neighboring state, no one particularly hides that Russia is meant by it.

For obvious reasons, the Russian Armed Forces followed these exercises very closely. And as it turned out, not in vain! The sea was patrolled by Russian warships, and Russian fighter jets were constantly in the sky.

As expected in Moscow, the NATO ships made several attempts to arrange provocations. Two warships-HNLMS Evertsen from Dutch Navy and the British HMS Defender tried to violate the territorial waters of Russia near the Crimea, referring to the fact that this is the territory of Ukraine. As you know, the West does not recognize the annexation of Crimea by Russia in 2014. Precisely, under this pretext, these dangerous maneuvers were carried out.

Russia reacted harshly. Under the threat of opening fire, foreign vessels had to leave the territorial waters of Russia. However, neither London nor Amsterdam admitted that this was a provocation.

According to the special representative of the NATO Secretary General for the countries of the South Caucasus and Central Asia, James Appathurai, the North Atlantic Alliance will remain in the Black Sea region to support its allies and partners.

"NATO has a clear position when it comes to freedom of navigation and the fact that Crimea is Ukraine, not Russia. During the incident with HMS Defender, NATO allies showed firmness in defending these principles, " Appathurai said.

In turn, British Foreign Minister Dominic Raab said that British warships "will continue to enter the territorial waters of Ukraine." He called the route followed by the intruder destroyer the shortest international route from Odessa to Georgian Batumi.

"We have every right to freely pass through Ukrainian territorial waters in accordance with international standards. We will continue to do so, " the high-ranking official stressed.

Moscow said that it would not allow such incidents in the future, and if necessary, it is ready to apply the "toughest and most extreme measures" to violators, although such a scenario is presented by Kremlin as "extremely undesirable" for Russia.

Many experts both in Russia and in the West immediately started talking about the potential threat of the 3rd World War, which in fact can flare up because of Ukraine. It is obvious that such forecasts are not beneficial to anyone: neither NATO nor Russia. Nevertheless, a belligerent and resolute attitude remains on both sides, which cannot but cause fear and concern among ordinary people.

Even after the end of Sea Breeze 2021, NATO continues to declare that they will not leave the Black Sea anywhere. This is already confirmed by the sending of new ships to the region.

Nevertheless, the question remains open: is the North Atlantic Alliance ready to take extreme measures against Russia under the pretext of protecting the sovereignty and territorial integrity of Ukraine, which is still persistently denied admission to NATO?

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Defence

Strategic Compass is controversial but better than indifference says Borrell

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EU foreign ministers meeting in Brussels today (12 July) discussed the EU ‘Strategic Compass’. EU High Representative Josep Borrell said that it was both an important and controversial initiative, adding: “I don't care if it is controversial, I prefer to have controversies than indifferences.”

It is the first time the foreign ministers, rather than defence ministers, will have discussed this project which aims to strengthen the EU’s crisis management, resilience, partnerships and capabilities. 

Strategic Compass is considered by the European External Action Service (EEAS) as one of the most important and ambitious projects in the field of EU security and defence. It is hoped that it can be finalized by March 2022, with a draft presented in November. It is hoped that EU states will provide clear political-strategic guidance on what they want the EU to achieve in this area in the next 5 to 10 years. 
It will guide the use of instruments the EU has at its disposal, including the recently established European Peace Facility.

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