Webinar Review: Europe Moving to Strengthen Defence Industrial Base

Estimated reading time: 4 minutes

Europe is seeking to establish a more sovereign, coordinated, and resilient defense industrial base in response to mounting political pressure, especially following Russia’s invasion of Ukraine, through the European Defence Industry Programme (EDIP). Renauld Hock of DG DEFIS outlined the efforts in a webinar last week hosted by the Global Electronics Association.

Electronics manufacturers and PCB-related companies will have an opportunity to apply for funding through the program to support specific defense systems by supplying critical enabling components.

The Directorate-General for Defence Industry and Space (DG DEFIS) is the European Commission department responsible for strengthening the EU’s defence industry, fostering innovation, and implementing the EU Space Programme. Hock explained that EDIP represents the EU’s attempt to consolidate a patchwork of earlier defense funding mechanisms into a more unified and scalable framework. Previous EU programs largely focused on research and development, such as the European Defence Fund (EDF), but recent crises exposed the need for something broader: programs capable not only of funding innovation, but also rapidly increasing industrial production capacity. EDIP is intended to bridge that gap.

EDIP, running through the current EU budget cycle ending in 2027, serves as both a funding instrument and a policy experiment. The lessons learned will ultimately feed into a larger European Competitiveness Fund planned for the next Multiannual Financial Framework beginning in 2028. The EU is “testing the logic of intervention” now, Hock said, so it can build a more permanent structure later.

EDIP carries a €1.5 billion budget divided into two primary pillars. Approximately €1.2 billion is allocated to programs involving EU member states and Norway, while €300 million is reserved for the Ukraine Support Instrument (USI), which specifically targets urgent Ukrainian defense requirements. The USI excludes Norway and instead focuses on EU-Ukraine industrial cooperation.

A major focus of the webinar was the Industrial Reinforcement Action (IRA), the centerpiece funding mechanism for industry participants. Unlike earlier EU defense initiatives centered on research, IRA funding is designed to directly expand manufacturing capacity and strengthen defense supply chains.

The IRA calls are organized around five key subject areas. Two are especially relevant to electronics manufacturers and PCB-related companies: energetic components and key electronic components. The electronic component category includes guidance electronics, propulsion electronics, radio-frequency and laser modules, multispectral cameras, avionics, PCBs and IC substrates, lithium-polymer batteries, power electronics, and semiconductor building blocks.

These components must support specific defense systems such as drones, counter-drone systems, missile defense systems, precision-guided munitions, and C4ISR systems. Hock stressed that applicants do not need to manufacture the final weapon system itself; supplying a critical enabling component is sufficient as long as the proposal clearly demonstrates how it contributes to a defense product supply chain.

One notable feature of EDIP is its flexibility regarding applicants. Most IRA proposals do not require a consortium and may be submitted by a single industrial entity. However, for projects under the Ukraine Support Instrument, at least one Ukrainian entity must participate. This reflects the EU’s push not only to support Ukraine militarily, but also to integrate Ukrainian industry more deeply into the European defense ecosystem.

Funding terms vary substantially between standard EDIP actions and Ukraine-focused programs. Under the main program, the EU will typically fund 35% of eligible project costs, with potential bonuses increasing support to 50% if SMEs, mid-caps, or new cross-border partnerships are involved. Under the Ukraine Support Instrument, however, projects may receive up to 100% funding, underscoring the urgency attached to Ukraine-related production needs.

The program's political logic was also highlighted. EDIP is not simply about subsidizing factories; it is intended to reduce strategic vulnerabilities in Europe’s defense supply chain. The EU increasingly sees dependence on external suppliers as a security risk, particularly for critical technologies and raw materials. Applicants must therefore demonstrate how their projects improve resilience, shorten production lead times, and strengthen Europe’s long-term industrial autonomy.

The evaluation process reflects these priorities. Proposals will be judged not only on technical merit and implementation quality, but also on how effectively they improve security of supply, reinforce cross-border industrial cooperation, and accelerate defense production capacity. For Ukraine-related calls, evaluators will additionally prioritize rapid delivery capability and direct benefit to Ukrainian defense requirements.

Another important theme was speed. Hock repeatedly acknowledged that Europe’s traditional procurement and funding structures have moved too slowly for current geopolitical realities. EDIP seeks to inject greater urgency into EU defense financing, particularly through streamlined grant structures that use lump-sum funding mechanisms. Rather than auditing every engineering hour during execution, the EU will assess project cost structures upfront during grant negotiations and then focus afterward on whether agreed milestones are achieved.

The webinar also touched on broader strategic initiatives connected to EDIP. These include Common Procurement Actions (CPA), which financially support joint purchases of defense systems by EU member states; European Defence Projects of Common Interest (EDPCI), which will fund large long-term multinational defense programs; and FAST, a supply-chain transformation fund aimed particularly at SMEs and mid-cap companies.

Throughout the presentation, Hock framed EDIP as part of a much larger transformation underway in European defense policy—moving from a fragmented collection of national industries and limited R&D coordination toward a more integrated, production-oriented defense industrial strategy. Ukraine’s war has accelerated this shift dramatically, exposing weaknesses in Europe’s manufacturing readiness while simultaneously creating political momentum for unprecedented cooperation. The EU hopes that EDIP will go a long way toward alleviating this reality.