The legislation adopted in the Industry, Research and Energy committee will increase funding for defence-related investment by amending existing EU programmes – the Strategic Technologies for Europe Platform (STEP), Horizon Europe, the European Defence Fund (EDF), the Digital Europe programme (DEP) and the Connecting Europe Facility (CEF) – to channel EU funding towards defence.
“Defence and security technologies” will be added as a fourth strategic sector under the Strategic Technologies for Europe Platform (STEP). MEPs broadened the definition of defence technologies to include societal resilience, such as critical infrastructure protection, disaster response, and election integrity.
In Horizon Europe, MEPs backed the Commission’s proposal to support civil applications with potential military applications (dual use). Funding rates in the European Defence Fund, will be increased for SMEs and small mid-caps, allowing up to 100% EU co-financing for eligible projects.
MEPs want the Digital Europe Programme to facilitate the deployment and operation of so-called AI factories and gigafactories for defence-related AI models and applications. They argue the programme should also reinforce the Union’s societal resilience and combat hybrid digital threats.
The committee also supports EU funding for dual-use transport infrastructure under the Connecting Europe Facility (CEF), including military mobility corridors, fuel supply chains, and logistics hubs. MEPs want to increase co-financing rates to 100%, in particular for projects related to hot-spots and cross-border sections of military mobility corridors. MEPs also extended the eligibility criteria for dual-use fuel infrastructure.
Reducing reliance on external countries and supporting Ukraine
MEPs say that to protect the EU’s strategic and economic security interests, preference shall be given where appropriate to the purchase and use of materials, products and technologies which reduce strategic dependencies on non-EU countries.
Ukraine’s sovereignty, resilience, and industrial capacity are essential to European security, and efforts should be undertaken to explore pathways for the future integration of Ukraine’s defence industry into relevant EU programmes, MEPs add. The EU should therefore support its efforts to modernise, innovate, and align with European standards.
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“This vote is a clear and unified signal: Europe must act swiftly and decisively to strengthen its defence industrial base, streamline cross-border cooperation, and adapt our key EU programmes to serve our strategic objectives. Parliament has defined a coherent framework consolidating existing instruments – without creating new funding lines – so member states have the flexibility and the tools to deliver,” lead MEP Rihard Kols (ECR, Latvia) said.
“Security and defence are now EU citizens’ top concern. It is time to act, enter swift negotiations, and deliver. This is how Europe leads – by turning urgency into unity, and unity into action,” he added.
Next steps
The draft legislation was adopted with 63 votes to five, with four abstentions. MEPs also voted to open negotiations with Council with 64 votes to five, with three abstentions. The full parliamentary plenary will have to be notified of the decision before negotiations with the Council of Ministers can start.
Background
The European Commission’s proposal, presented on 22 April 2025, aims to boost defence-related investments within the EU budget as part of the ReArm Europe Plan. In response to escalating geopolitical threats, the text seeks to strengthen the European Defence Technological and Industrial Base (EDTIB) with funding coming from existing budgets. It follows the Joint White Paper for European Defence Readiness 2030, aiming to enhance the EU’s strategic autonomy and competitiveness in defence.
