The European Commission has proposed to increase the bloc’s strategic autonomy, bolster its ability to protect citizens and make Brussels a stronger global actor through a €13bn European Defence Fund proposed in the EU budget 2021-2027.

According to a Commission press release, the newly proposed budget line will provide the financial firepower for cross-border investments in state-of-the-art and fully interoperable technology and equipment in areas such as encrypted software and drone technology.

In addition, the High Representative, with the support of the Commission, has proposed a new €10.5bn European Peace Facility, an instrument outside of the EU’s long-term budget, which will help improve the EU’s ability to prevent conflicts, build peace and guarantee international security.

“The European Union has over the past couple of years taken steps in security and defence that seemed unthinkable before,” said Federica Mogherini, High Representative for Foreign Affairs and Security Policy/Vice-President of the Commission. “We can now support research and cooperation to develop defence capabilities. We are taking measures that will facilitate the rapid movement of Member States’ forces in Europe. Furthermore, with the Commission’s support, I am proposing the establishment of a European Peace Facility that will improve the financing of EU military operations and improve our support for actions by our partners.”

In turn, Jyrki Katainen, Vice-President in charge of Jobs, Growth, Investment and Competitiveness, said the proposal will help the EU “take its destiny into its own hands”.

“We are taking greater ownership in defending and protecting our citizens,” he said. “For the first time in the history of the European Union, a part of the European budget is devoted to investing collectively to develop new technologies and equipment to protect our people. The European Defence Fund is a true European tool to encourage joint investments and amplify Member States’ efforts in defence.”

Elżbieta Bieńkowska, Commissioner for the Internal Market, Industry, Entrepreneurship and SMEs, described the European Defence Fund as a game changer for defence cooperation in Europe. “Based on the first initiatives tested these last two years, we are now scaling it up into an ambitious European instrument to support collaborative defence projects throughout their entire development cycle. The €13bn Fund shows that this Commission is serious about building a Europe that defends and protects its citizens.”

As outlined in the Commission press release, the new €13bn European Defence Fund will provide €4.1bn to directly finance competitive and collaborative research projects, in particular through grants. Beyond the research phase, €8.9bn will be available to complement member states’ investment by co-financing the costs for prototype development and the ensuing certification and testing requirements.

Mogherini also proposed the establishment of a European Peace Facility, an off-budget instrument to cover the common costs of all EU military missions and operations.

“Today, such operational actions cannot be financed through the EU budget, we have limitations foreseen by the Treaties,” she explained. “The Facility is proposed as an off-budget Fund, and the proposed ceiling that I put on the table for Member States to discuss and decide is of €10.5bn over seven years of the next Multiannual Financial Framework.”