The European Parliament and EU Council have reached provisional agreement on proposals to accelerate defence investment and improve the EU’s responsiveness to security challenges.
The package of legislative proposals – part of so-called “Omnibus V” EU simplification measures – is intended to accelerate the approval of permits for defence-related projects and the export of defence equipment between EU countries. It also simplifies security and defence procurement procedures and EU cooperation on defence contracts, ensures that EU chemical regulations adequately reflect defence requirements, and simplifies the implementation of the EU’s European Defence Fund (EDF).
The proposals are designed to support up to €800 billion in defence investment over the next four years under the ReArm Europe Plan/Readiness 2030 initiative, enabling member states and the defence industry to better respond to growing security challenges.
For the acceleration of permit-granting procedures for defence projects, such as the construction of new factories or the expansion of existing facilities, co-legislators agreed on an EU-wide default period for permit decisions of 42 working days (as of the acknowledgement of a completed application). However, national authorities can on a case-by-case basis extend the time limit a maximum of two times by up 60 days in exceptional circumstances, e.g. for complex projects or where there are risks to the environment or the health and safety of workers and additional time is necessary to resolve them. In such cases, the total duration of the permit-granting process shall not exceed 102 working days.
Such extensions will be communicated to the project promoter, accompanied by an explanation and an expected decision date. If national authorities do not follow up by the applicable deadline, the principle of tacit approval should apply. National authorities should then within 8 working days from the expiry of the deadline inform project promoters and specify the requirements which these permits are subject to.
The report also calls on EU countries to establish single points of contact for defence project promoters, with the digital tracking of applications, annual reporting to the Commission on permit activity and SME support, and EU monitoring of tacit approvals to ensure transparency and consistent implementation.
Included in the agreement are measures to remove regulatory obstacles to facilitate and accelerate public procurement in defence and intra-EU transfers of defence-related products.
A new general transfer licence for defence-related products should make it easier for defence companies to operate across EU borders. Member states will be required to publish these licences, giving industry a more predictable framework for intra-EU transfers.
On defence procurement, the agreement updates and raises the threshold for the application of EU procurement rules, extends the maximum duration of framework agreements from seven to ten years, and introduces greater flexibility for member states to conduct occasional joint procurement.
When it comes to facilitating investments and conditions for defence industry, co-legislators agreed to simplify the management and implementation of the European Defence Fund, updating and clarifying the list of award criteria defence projects need to meet to obtain EDF funding, prioritising projects that are able to showcase the highest standards of excellence, quality and efficiency.
They also updated the rules related to increased funding under the EDF, both with regard to eligible actions and funding rates, to enable further financial support to activities involving small- and medium size enterprises (SMEs). To strengthen cooperation with Ukrainian entities, costs related to testing in EU candidate country Ukraine would be eligible for EDF funding.
Finally, the agreement between the Parliament and Council also confirms that EU countries can apply certain exemptions to EU environmental and chemical regulations in the interest of defence – but only when justified.
The provisional agreements on the legislative files now need to be formally adopted by both the Parliament and Council before they can enter into law.
