| EUROPE CHIPS IN FOR MORE AMMO. Our sources say that EU countries have raised north of a half-billion euros to extend the EU’s ASAP subsidy scheme for artillery ammo and missile production by another year. The exact amount is oscillating between €750 million and €1 billion, according to two people briefed on the matter. That would more than double the size of ASAP, which is currently funded with €500 million. The Commission’s proposal to prolong the programme is in the hands of the EU countries, who are expected to give their opinions on Friday.
EIB TRIPLES DEFENCE PORTFOLIO. The once-squeamish European Investment Bank announced this week that it will unleash €3 billion in loans and guarantees for the defence industry with a focus on SMEs. The bank’s president, Nadia Calviño, announced a partnership with Deutsche Bank for research, supply chain resilience and military infrastructure such as training facilities on Wednesday, and said a similar deal with France’s BPCE will be made official in the coming days. Last week, the EIB unveiled a deal with five European national banks to jointly back defence and security projects.
… AND MORE COMING. A little birdie tells us that the EIB’s board of governors will approve raising EIB’s financing targets for defence to record levels when they meet next Friday. The bank is also reviewing several security-related projects for approval, including financing military housing for a German armoured brigade being permanently stationed in Lithuania.
NEWS OF THE DAY: ISRAEL STRIKES IRAN. Israel launched a series of strikes on Iran early on Friday, hitting sites linked to the Iranian nuclear programme and military leadership. Israeli PM Benyamin Netanyahu said the attack aims to “roll back the Iranian threat to Israel’s very survival”, and that the targets included Iran’s main uranium enrichment facility in Natanz. The top commander of Iran’s Islamic Revolutionary Guards, Hossein Salami, was reportedly killed. The attack took place just days after the United Nations said Iran is not complying with its nuclear obligations, and Teheran announced the construction of a third nuclear enrichment facility. Europe has reacted by urging ‘restraint’.
DEFENCE LOBBY’S BIG MFF BUDGET ASK. According to an internal document seen by Euractiv, the top lobby group for Europe’s defence industry, ASD, is pushing for the EU’s next seven-year budget to combine various funding streams for security related industries into a single pot. The “Securing Europe Facility” would bring together EU funds for cybersecurity, border management and various types of research – and push for EU-made security products to replace foreigner suppliers from the US or China. The funding should support to-be-created European Security Projects of Common Interest (ESPCI) to “address the urgently required protection of Europe’s transnational energy, transport, and communication networks”, ASD argues in the document. “Without its own robust industrial base for security, Europe risks losing control over sensitive technologies and critical networks, and its ability to respond effectively in crises.”
NEXT TARGET: GREEN RULES? The defence industry is also hoping for exemptions from a litany EU rules, particularly on the environment and sustainability. A position paper from ASD seen by Euractiv asks for changes to more than fifty current regulations, with chemical bans, emissions restrictions, sustainable production guidelines and sustainable finance rules all on the list. Other requests include new European reserves of critical raw materials, shorter approval processes for mining projects, and carve outs in EU supply chain reporting, artificial intelligence and antitrust competition rules.
‘OMNIBUS’ PREVIEW. The European Commission is preparing an overhaul of existing EU regulations that would make arms making easier, which they’ve dubbed “Omnibus”, to be unveiled next Tuesday. As Defence Commissioner Andrius Kubilius put it on Tuesday, the goal is to give “more flexibility to Member States in common procurements, on framework agreements, and facilitate innovation procurement” by simplifying directives on defence procurement and intra-EU exports. Kubilius said they’ll also look at competition rules and business reporting obligations. The package is also expected to facilitate better access to financing for defence firms, as stated in the Commission’s White Paper.
ENDLESS EDIP. Poland restarted debate over the EU’s landmark €1.5 billion defence industrial plan this week in hopes of finding compromise, though a deal has remained elusive. Warsaw hoped to get the other 26 EU countries to agree on a text before handing over leadership of the Council to Denmark in July – but France and several other countries are still fighting over derogations to the rules for allowing defence companies from outside the EU to participate. Some member states remain hopeful they can strike a deal by the next leaders’ summit on 26-27 June – where Council President Antonio Costa plans to keep the focus on defence, as it comes directly on the heels of NATO’s summit in The Hague.
POLAND’S SAFE BID. Poland is hoping for as much as €25 billion from Europe’s new €150 billion SAFE envelope, Polish Minister of State Assets Jakub Jaworowski told Euractiv in Warsaw on Monday. He added that Poland and Ukraine are considering partnering on joint projects. EU countries, along with Norway and Ukraine, have six months to apply for SAFE loans by pitching joint procurement deals that involve at least two countries.
THE NEW TRANSLATLANTIC RELATIONSHIP. The EU and Canada have officially started work on a defence and security partnership deal that could be sealed at the Canada-EU summit on 23 June. A deal would clear the way for Ottawa to join EU-sponsored defence procurement programmes under SAFE. | 