Written by: Julien Potin & Manfred Sintorn

Edited by: Jake Gasson

Supervised by: Emile Clarke

On 9 January 2024, Thierry Breton, Commissioner for the Internal Market and in charge of the European Defence Fund (EDF) and defence industry, announced that he was proposing a new €100 billion defence fund to strengthen the EU’s defence industry (Wax & Kayali, 2024). The statement came in the context of an apparent failure to supply Ukraine with a promised million artillery shells within a year, which he insisted that the Union would nonetheless accomplish, and as the EU’s defence sector becomes increasingly centralised. Most astonishing, however, is that the proposed sum largely surpasses any fund that EU institutions have previously devoted to the defence industry. With the most recent EU capability development tool for defence and security being the EDF, with €8 billion spread over the 2021-2027 period, talks about a newer and larger framework for EU defence funding raise numerous questions regarding framework and administration. While the new interest in defence spending at an EU level is inherently different to the EDF in that it is intended to finance the procurement of equipment rather than just its development, it appears to be an extension of the EDF framework.

Ahead of the Commission’s forthcoming interim evaluation of the EDF and as a new, larger, defence fund appears on the horizon, there is both a value in and a lack of work on reviewing and analysing the EDF. This study analyses the structure, governance, and practice of the EDF to establish whether the instrument is obsolete and what the Fund’s model and effects imply for future EU-level defence funding. In this manner, it also scrutinises one part of the PESCO-based defence union and presents recommendations based on the lessons learned so far in supranational defence funding and cooperation.