Strengthening European Defence

New changes to the EU budget coming

The European Commission has today presented a package of changes to the EU budget aimed at boosting investment in the defence sector, accelerating the implementation of the ReArm Europe plan and reinforcing the “Defence Preparedness 2030” outlined in the White Paper on European Defence. The aim is twofold: to simplify access to funding for strategic projects and to better coordinate existing resources (European Defence Fund, Horizon Europe, Digital Europe, cohesion policies) in order to develop, enhance and innovate defence capabilities across the Union.

1. STEP: from civil research to defence systems

The heart of the proposals consists in extending the scope of the STEP platform (Strategic Technologies for Europe Platform), which until now has focused on civil technologies, to the priority defence technologies and products indicated in the White Paper. This means that research and development projects funded by the European Defence Fund (EDF), Horizon Europe and the Digital Europe programme will be eligible to receive the “STEP seal”, a recognition that facilitates their access to additional funding lines and increases their visibility among public and private investors.

Technology coordination: it will identify and promote cutting-edge projects that are key to the security of the Union (AI, robotics, advanced sensors, command and control systems).

Financial leverage: it will stimulate investments at regional and national level also through cohesion funds (ERDF and CF), ensuring that less developed regions can participate in the development of a defence technological and industrial base.

2. Innovation and start-ups: EIC opens up to dual-use technologies

Through the Horizon Europe regulation, the scope of the European Innovation Council (EIC) will be expanded to include start-ups and SMEs engaged in the development of dual-use technologies and military applications.

The aim is to foster a dynamic and competitive ecosystem, capable of: accelerating research in artificial intelligence and cybersecurity, supporting the production of innovative solutions for logistics, predictive maintenance and autonomous systems, promoting the market diffusion of technologies developed in dual-use contexts.

This openness represents a strong signal: the world of emerging technologies is no longer confined to purely civilian purposes, but becomes a crucial driver for collective European defense.

3. Digital Europe and AI gigafactories

Similarly, the Digital Europe Programme (DEP) will be extended to dual-use applications, with particular attention to the development and management of AI gigafactories. These facilities, designed to produce AI algorithms and platforms on a large scale, will be essential for: ensuring the availability of advanced computing capabilities in the civil and military fields, promoting the adoption of AI technologies in critical applications (cyber defense, operational simulation, automated maintenance), developing interoperable solutions between the armed forces of the Member States.

4. Safeguard clause: flexibility in cohesion funds

For the first time, the regulation introduces a safeguard clause in the main defence financing instruments, the European Defence Fund (EDF) and the Munitions Production Support Act (ASAP). Thanks to this provision, Member States will be able, on a voluntary basis, to transfer resources originally earmarked for regional cohesion to one of the two programmes. This will allow: to respond rapidly to production emergencies of munitions and defence materials, to focus investments on strategic industrial capacities, to exploit pre-existing resources instead of waiting for new allocations. The duration of the ASAP is also extended until 31 December 2026, prolonging long-term support for the production of munitions.

5. Military mobility and digital infrastructure with the CEF

The Connecting Europe Facility (CEF) receives two major upgrades:

Military mobility infrastructure: the regulation facilitates the transfer of cohesion funds to rail, road and port projects that facilitate the rapid movement of armed forces within the EU.

Dual-use digital capabilities: the CEF digital programme will be expanded to fund cloud infrastructure, 5G networks and IoT platforms with security and reliability features adapted to both civilian and military needs. These innovations will support the logistical resilience and cybersecurity of European communication networks.

6. Towards the Omnibus Defence Simplification Package

Today’s amendments are part of a broader journey: in June 2025, the Commission will present an Omnibus Defence Simplification Package. The aim will be to further reduce red tape, harmonise procurement regulations and promote pan-European industrial cooperatives, ensuring faster, more efficient and targeted investments between Member States.

With this regulation, the European Union is making use of existing financial instruments to build a truly integrated defence technological and industrial base. The alignment between STEP, EIC, Horizon Europe, Digital Europe and the Cohesion Funds promises to strengthen the strategic capabilities of the EDTIB, foster dual-use innovation and ensure European defence security, autonomy and competitiveness. The challenge now is to translate these intentions into concrete projects, capable of responding to new global threats and making Europe a credible actor in collective defence.

Alessandro Fiorentino