Simplification: Council and Parliament strike deal to boost EU defence industry and readiness
Today, the Council presidency and European Parliament’s negotiators reached a provisional agreement on new legislations aiming to simplify security and defence procurement, facilitate defence investments, and support the defence industry. The package aims to remove administrative delays in procurement, permitting, reporting and cross-border cooperation, giving member states and industry a clearer path to act quickly and reinforce Europe’s defence capacity.
“With today’s agreement, we are simplifying rules for defence-related projects and providing greater support to Europe’s defence industry. This is an important deliverable on two key priorities of the Cyprus presidency: strengthening the EU’s defence readiness and competitiveness. For a strategically autonomous Eutope, defence readiness and competitiveness go hand in hand.”
Marilena Raouna, Deputy Minister for European Affairs of the Republic of Cyprus
Defence readiness
The provisional agreement simplifies the management and implementation of the European Defence Fund (EDF) and clarifies how the EU’s environmental and chemicals legislation apply to defence readiness activities. The provisionally agreed text simplifies the administrative requirements for applications to the EDF, while increasing support to SMEs and making implementation of the fund more predictable. It also preserves the possibility for European public bodies, such as the European Defence Agency, to function as central purchasing bodies.
On the issue of access and user rights, the provisional agreement preserves the rights of co-financing member states to be granted access rights to the results of EDF-funded actions, while ensuring, at the same time, adequate protection for the intellectual property rights of industrial entities participating in the action.
Moreover, the co-legislators agreed on additional incentives to reinforce the participation of SMEs in EDF projects, notably by increasing the funding rate bonus for projects involving SMEs.
Finally, the provisional agreement reiterates the aim of providing a high level of protection of human health and the environment. It therefore retains the amendments proposed by the Commission to the environmental and chemicals legislation, regarding exemptions available for use of chemical substances for defence readiness purposes.
Acceleration of permit granting procedures
The provisional agreement provides a harmonised framework that accelerates permit-granting for defence readiness projects, while safeguarding member states competences. The maximum duration of the permit-granting process was set at 102 working days The provisional agreement retains the Commission proposal that a permit request would be tacitly approved if the competent authority has not taken a decision before the expiration of the time limit. At the same time, the provisional agreement ensures that derogations from tacit approval remain possible: national law will be able to provide for such derogations where there is a grave risk to human health or national security.
Intra-EU transfers and security and defence procurement
The provisional agreement removes administrative delays in security and defence procurement, facilitates transfers of defence-related products within the EU and strengthens intra-EU cooperation, giving member states and industry a clearer path to reinforce Europe’s defence readiness towards 2030. It further aligns the Commission proposal with the general public procurement rules wherever appropriate, while taking into account the specificities of the defence market.
The provisional agreement increases the thresholds in the defence procurement directive to ease the administrative burden and give authorities more time to focus on the major defence projects that really matter. It also introduces the possibility of occasional joint procurement, a de minimis rule for contract modifications and enhanced flexibility in framework agreements.
Finally, the provisional agreement introduces two new mandatory general transfer licences: one for transfers between certified suppliers and certified recipients, and one for transfers in the framework of an intra-EU industrial partnership.
Next steps
The provisional agreement must now be endorsed by the Council and the European Parliament before being submitted to a legal/linguistic revision with a view to the formal adoption of the legislative acts by the co-legislators in the coming months.
Background
On 17 June 2025, the Commission adopted its fifth Omnibus package on defence readiness, comprising simplification proposals in defence-specific, as well as non-defence-specific legislation and programmes. The package includes proposals for two regulations and one directive, as well as drafts of delegated regulations aiming to facilitate defence investments and conditions for defence industry and simplify security and defence procurement. The defence readiness Omnibus reflects the priorities set out in the White Paper for European Defence Readiness 2030.
This initiative follows from a broader political objective of enhancing EU competitiveness, by reducing businesses’ administrative burdens and creating more favourable conditions for them to operate in the EU. Notably, on 6 March 2025, the European Council called on the Commission and the co-legislators to ‘swiftly take work forward on simplifying the legal and administrative framework, in particular for public procurement, industry cooperation, permitting and reporting requirements, in order to address all obstacles and bottlenecks hindering a rapid ramping up of the defence industry, including for SMEs and mid-caps’.