Introduction
In an era marked by the resurgence of power politics and overlapping international crises, Jean Monnet’s statement that ‘’the European Union will be forged in crises and will be the sum of the solutions in those crises’’ has become more relevant than ever. The war in Ukraine, alongside the geopolitical shift in the Indo-Pacific, and the return of high-intensity warfare have exposed Europe’s vulnerabilities, compelling it to bolster its security and defence architecture. Against this backdrop and given the complex nature of contemporary threats, it is clear that no single EU member state can independently handle them.
In response, the European Union has launched several collaborative defence initiatives, a positive indicator that it is advancing its Common Security and Defence Policy (CSDP) capabilities while overcoming the diverging perspectives of its members. Yet, one initiative, the European Defence Fund (EDF), has stood out as capable of tackling the chronic issue of fragmentation characterising the EU defence industrial landscape. This article briefly overviews the EDF’s history, from its precursor programs to its overall purpose: fostering a competitive and innovative European defence market. Moreover, it outlines the EDF’s features, legal requirements, and synergies with other EU programs. Lastly, it assesses its impact through data drawn from its recently published interim evaluation, arguing that the EDF represents a critical step towards a stronger European Defence Industrial and Technological Base.
A Snapshot of Strength: Unveiling the EDF
The European Defence Fund builds on two precursor programs, the Preparatory Action on Defence Research (PADR) and the European Defence Industrial Development Program (EDIDP). Launched in 2021 with a total budget of EUR 7.3 billion, the Fund merges the previously separate research and development aspects of defence and represents one of the largest supranational defence programs, distributing approximately EUR 1 billion annually to finance cross-border R&D projects within the EU and associated countries, like Norway. It seeks to address a highly disjointed EU defence market, where a lack of cooperation is projected to cost between EUR 25 and 100 billion each year.
The EDF is under the direct management of the European Commission’s Directorate General for Defence Industry and Space (DG DEFIS), with certain specialised projects delegated to the European Defence Agency (EDA) and the Organisation for Joint Armament Co-operation (OCCAR). Its annual work program is being developed in consultation with the EU member states, the EDA, and the European External Action Service (EEAS). It is structured around 17 categories, including 15 thematic areas such as CBRN, operational capabilities in the air, naval, and ground domains, cyber, space, and two non-thematic calls focused on disruptive technologies and small and medium-sized enterprises (SMEs), often the most dynamic yet vulnerable actors in defence. 
The EDF finances two types of actions: research (R) and development (D) projects, encompassing the full cycle from early-stage R&D to prototype testing and pre-commercial deployment. Although research projects get funded completely, development ones require, due to their complexity and high cost, co-financing from interested EU member states, promoting genuine cross-border collaboration, and establishing a pathway from development to commercialisation.
To be eligible for funding, a project proposal requires a consortium of at least three legal entities from three different EU member states or associated countries (i.e., Norway). This requirement gets reduced to two entities for projects associated with disruptive technologies. Per the EDF regulation, the facilities and executive structures of the participants must also reside geographically within the EU or Norway. Furthermore, regarding development projects, the consortium must demonstrate that at least two member states or associated countries intend to procure the final product, ensuring alignment with the capability needs of the EU members’ armed forces. While participation from entities controlled by or originating from non-associated third countries is not precluded, security guarantees must be provided, safeguarding the security interests of the Union and its members.
Moreover, the EDF does not operate in a vacuum. Its priorities correspond to the key defence needs of the EU members identified in the EDA’s Capability Development Plan (CDP) and the Coordinated Annual Review on Defence (CARD). It also complements the Permanent Structured Cooperation (PESCO), a framework for enhanced joint EU defence cooperation, since development projects implemented in this context are eligible for a higher financing rate. Additionally, through its spin-in calls under the EU Defence Innovation Scheme (EUDIS), an instrument meant to foster defence innovation uptake and a more accessible landscape, the Fund leverages dual-use technologies funded by civil EU programs like Horizon Europe with high defence potential. Finally, potential synergies can also be identified with the EU’s Space Program, further cementing the EDF’s flexible and multi-dimensional trajectory. The preceding section has outlined the Fund’s evolution, structural elements, and interlinkages with existing EU initiatives. The following one will present an impact assessment of the EDF, displaying its benefits from both an institutional and industrial perspective.
The Renaissance in Motion: Measuring the EDF’s Momentum
The impact of the EDF has been substantial. It is considered one of the largest defence R&D programs globally, with EUR 5.4 billion already invested in 162 ongoing collaborative projects involving 1,366 unique participants. This makes it one of the top three defence R&D investors within the EU, alongside Germany and France, with its budget representing approximately 15% of all EU defence R&D expenditure.
Likewise, according to a macroeconomic impact assessment of the EDF, carried out by the Joint Research Centre (JRC), the Fund is projected by 2030 to generate a 0.0025% increase in EU GDP (an estimated EUR 2,954 billion) and create 32,413 additional jobs. Beyond these benefits, the study anticipates less tangible but equally positive effects, ranging from a more competitive and standardised European Defence industry, characterised by less duplication, and ultimately a safer and more technologically independent Union.
Crucially, its impact is felt across the EU. As stated by Daniel Fiott, while countries with larger defence industries like France, Germany, or Italy are the most represented in EDF, the participation ratio of those with smaller defence industrial bases is increasing dynamically, a hint of the Fund’s profound impact on all EU members, in line with the Commission’s assessment that the EDF’s financing in some cases seems to match or even surpass their total national defence R&D spending. The aforementioned is reinforced by the fact that the European defence market is showing signs of consolidation, attributable to the EDF and its predecessors, while EU collaborative R&T spending is projected to have increased more than twofold, from EUR 250 million in 2022 to around EUR 580 million in 2025.
On the industry side, the Fund’s influence is even more compelling. Its growing attractiveness is demonstrated by the constant increase in proposals submitted, which surged from 140 in 2021 to almost 300 in 2024, a 114% increase. Furthermore, SMEs are heavily involved, representing 43% of all unique participants and receiving 20% of the total EU funding. This not only highlights the Fund’s added value for smaller players but constitutes concrete evidence of the former’s role in broadening the EU defence ecosystem and fostering innovation from a wider range of actors.
This positive reception is backed by strong feedback from beneficiaries. Based on a PwC study, 100% of defence industry stakeholders believe the EDF has contributed to the development of projects otherwise unfeasible nationally or regionally. Also, 83% of beneficiaries consider its project implementation processes as more efficient than those of its precursors. Lastly, they underline that the Fund has become simpler to work with, thanks to more standardised evaluation procedures, more effective communication methods, and successful outreach via the annual EDF Info Days.
Ultimately, the EDF has proven to be highly relevant in funding the future of defence through its clear focus on emerging and disruptive technologies, with a total of EUR 186 million allocated during its first four years, compared to the EUR 23.9 million earmarked under EDIDP. Its strategic focus, especially in low-TRL (Technology Readiness Level) technologies, ensures that Europe is not just catching up but is positioned to lead in the next generation of defence innovation.
Conclusion
The purpose of this article was to present and evaluate the impact of the EDF. Based on the data, the Fund has emerged as a genuine catalyst for change. Though its projects are still ongoing, EDF’s positive effects on the defence industry are indisputable. Above all, it demonstrates the Commission’s ability to manage complex defence projects collaboratively with EU member states and the industry, echoing Frédéric Mauro’s view of the EDF being the most promising initiative in European defence.
Nonetheless, while more remains to be done in terms of simplification and flexibility, which ought to be addressed by the Defence Readiness Omnibus, the EDF offers a vision of an integrated and resilient EU defence ecosystem, a “must-have’’ program at a time defined by fragmentation and uncertainty. As the EU weighs a EUR 131 billion proposal for defence and space under the next Multiannual Financial Framework, the EDF’s success will provide a compelling case for its successor to receive strong political and financial support post-2027, further strengthening Europe’s defence readiness.
