Europe Accelerates Toward a Unified Defence Industrial Base: Key Takeaways from Commissioner Kubilius’ Landmark EDIP Speech

The European Union is preparing to enter a new phase in its defence and industrial strategy. In a major address to the European Parliament, EU Commissioner for Defence and Space Andrius Kubilius outlined what he called a “defence industrial policy revolution” centred on the soon-to-be-adopted European Defence Industry Programme (EDIP). Far from a routine legislative file, EDIP is positioned as the keystone of Europe’s long-term defence readiness and industrial competitiveness.

Kubilius made the message clear: after a year of “creating opportunities,” the EU is now entering a period of delivery — and EDIP is the delivery mechanism. Delay, he warned, is no longer a luxury Europe can afford in an era of high-intensity threats and supply-chain vulnerabilities. 

Why EDIP Matters: From Fragmentation to Continent-Scale Defence Production

EDIP consolidates several years of incremental progress into a single, long-term industrial approach. It builds on earlier initiatives that rapidly scaled ammunition output and enabled joint procurement—most notably ASAP (Act in Support of Ammunition Production) and EDIRPA (European Defence Industry Reinforcement through Common Procurement). Together, these earlier programmes helped Europe increase annual shell production from 300,000 to 2 million within three years. EDIP is intended to take this leap much further. 

For decision-makers, the programme represents four major structural shifts:

1. Joint Procurement as the Default Model

The EU is making joint defence procurement—not national-level buying—the financially preferred option. Member States will receive significantly greater EU co-funding when they buy equipment together rather than separately.

Kubilius articulated the principle with unusual bluntness:
 “We fund cooperation, not fragmentation.” 

This directly targets Europe’s long-standing inefficiencies: dozens of parallel national programmes, duplicated capabilities, and small-batch orders that raise costs and slow delivery. For industry, EDIP signals a future in which cross-border cooperation is not optional but economically decisive.

2. Strengthening and Scaling Europe’s Defence Production

EDIP introduces strict rules to ensure that European funds support European industry. Specifically:

• 65% of component costs must originate within the EU.

• €1.2 billion in grants will be allocated to strengthen Europe’s industrial base.

• SMEs and mid-caps will gain targeted support through new mechanisms such as FAST (Fund to Accelerate Supply Chains Transformation). 

For CEOs, this creates a favourable environment for expanding production lines, localising supply chains, and forming partnerships that qualify for EU funding under the new rules.

3. SEAP: A New Legal Vehicle to Speed Up Defence Cooperation

A major innovation is the creation of SEAP (Structure for European Armament Programme)—a legal entity designed to remove administrative and financial barriers that have long slowed multinational defence projects.

SEAP can benefit from:

• Simplified procurement rules

• VAT exemptions

• Eligibility for EU financial support

• The ability to borrow on financial markets

• Participation of Ukraine in joint programmes 

SEAP is expected to accelerate complex, cross-border programmes—particularly those too large or too costly for any single Member State. These could include future “European Defence Projects of Common Interest,” covering areas identified in the EU Defence Readiness Roadmap, from drone defence to missile defence and space-based monitoring systems. 

4. Europe’s First Security-of-Supply Mechanism for Defence

For the first time, the EU will create a Security of Supply Mechanism to ensure timely access to critical defence products and components during crises. This mechanism will include:

• Tools for crisis response

• Measures to overcome supply bottlenecks

• Resilience planning for key industrial nodes

This is particularly relevant for companies managing complex supply chains and dual-use components. The EU is signalling that defence security of supply is no longer a national issue—it is a European one.

5. Deep Structural Integration With Ukraine’s Defence Industry

EDIP allocates €300 million specifically to integrate Ukraine into the EU’s defence technological and industrial ecosystem. But more significantly, it creates legal and financial pathways to:

• Procure defence equipment from Ukraine

• Invest directly in the Ukrainian defence industry

• Develop joint EU-Ukraine industrial projects

• Integrate Ukrainian military innovations into the European system 

Kubilius highlighted the importance of this cooperation with notable candour:
 “Ukraine’s defence industry needs us, but we need Ukraine’s defence innovations even more.” 

For political leaders and industry executives, this reflects a long-term strategic bet: Ukraine is not merely a beneficiary but a co-developer in Europe’s future defence landscape.

Implications for Industry, Governments, and Investors

For CEOs and Industry Leaders

EDIP offers unprecedented clarity and continuity. It signals:

• Predictable demand for high-volume production

• Strong incentives to Europeanise supply chains

• Accelerated timelines for multinational programmes

• New funding channels and financial instruments

• A favourable environment for partnerships with Ukrainian firms

For National Governments

EDIP changes procurement incentives and may reshape national defence planning. Countries that buy together gain more funding—those that buy alone pay more and wait longer.

For Investors

The programme creates a multi-year European market with:

• Guaranteed demand

• Structural funding

• Accelerated regulatory pathways

• New joint-venture opportunities across borders

Defence, once fragmented and politically sensitive, is becoming an EU-level industrial policy domain with long-term investment horizons.

A Turning Point for European Defence

Kubilius closed with a message that was both political and operational: “Without EDIP, there will be no successful delivery of our defence readiness.” He urged Parliament to adopt the agreement before year-end, noting that EDIP also underpins other major initiatives such as SAFE (Support to defence investments through financial instruments) loans and the EU Defence Readiness Roadmap. 

For Europe’s leaders and industrial strategists, EDIP marks a fundamental shift:
 from fragmented national procurement to a coordinated, continent-wide defence industrial base.

The political signal is unmistakable: Europe is preparing not just to respond to crises, but to build and sustain long-term defence readiness at industrial scale.