COM(2025) 188 Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153, (EU) 2023/1525 and 2024/795, as regards incentivising defence-related investments in the EU budget to implement the ReArm Europe Plan

30.04.2025

Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulations (EU) 2021/694,

(EU) 2021/695, (EU) 2021/697, (EU) 2021/1153, (EU) 2023/1525 and 2024/795, as regards incentivising defence-related

investments in the EU budget to implement the ReArm Europe Plan, COM(2025) 188

Otsuse ettepanek koordinatsioonikogule

Kujundada seisukoht

Kaasvastutaja sisendi tähtpäev 16.05.2025

KOKi esitamise tähtpäev 28.05.2025

VV esitamise tähtpäev 05.06.2025

Peavastutaja RAM. Kaasvastutajad: KAM, MKM, JDM, KLIM, HTM

Seisukoha valitsusse toomise alus ja põhjendus

Algatuse vastuvõtmisega kaasneks oluline majanduslik või sotsiaalne mõju (RKKTS § 152¹ lg 1 p 2);

Sisukokkuvõte

Euroopa Komisjon soovib tugevdada Euroopa Liidu kaitsevõimekust, laiendades Euroopa strateegiliste tehnoloogiate platvormi (STEP) kohaldamisala, et hõlmata ka kaitseotstarbelisi tehnoloogiad ja tooted. Ettepanek võimaldab liikmesriikidel suunata rohkem ELi eelarvevahendeid kaitsesektorisse ning annab Euroopa Horisont, Digitaalne Euroopa, Euroopa Kaitsefond programmide raames väljavalitud projektidele STEP märgise. Kavandatud muudatused hõlmavad ka võimalust toetada topeltkasutusega (dual-use) tehnoloogiaid ning aitavad tugevdada kaitsetööstuse innovatsioonivõimekust. „Euroopa horisont“ programmi Euroopa Innovatsiooninõukogu tegevusse hõlmatakse kahese kasutusega ja kaitsealaste uuendustega tegelevad idufirmad. tahetakse . Programmi „Digitaalne Euroopa“ raames käivitatakse tehisintellekti gigatehased ja arendatakse küberturvalisust. Üldeesmärk on suurendada ELi strateegilist autonoomiat ja valmisolekut reageerida kiiresti muutuvatele julgeolekuolukordadele. Euroopa Ühendamise rahastu muutmisega suurendatakse sõjavälise liikuvuse ja kahesuguse kasutusega digitaristu toetamist. Selleks antakse

2

liikmesriikidele soodsamad tingimused ühtekuuluvusvahendite ülekandmiseks CEFi kahesuguse kasutusega transporditaristu projektide jaoks ning laiendatakse digiprogrammi kahesuguse kasutusega digisuutlikkuse toetamiseks.

Kas EL algatus reguleerib karistusi või haldustrahve? Ei

Kas nähakse ette uue asutuse loomine (järelevalvelised või muud asutused)? Ei

Kas lahenduse rakendamine vajab IT-arendusi? Ei

Eesmärgid

Eesmärk on tugevdada Euroopa Liidu kaitsevõimekust ja strateegilist autonoomiat, suurendades kaitsevaldkonna investeeringuid ELi eelarve kaudu.

See saavutatakse järgmiste põhieesmärkide kaudu:

Laiendada STEP-i (Strateegiliste Tehnoloogiate Euroopa Platvormi), lisades sinna neljanda strateegilise sektori: kaitsetehnoloogiad ja tooted.

Suunata olemasolevate ELi programmide kaudu rohkem investeeringuid kaitse- ja topeltkasutusega tehnoloogiate arendamisse ja tootmisse.

Luua eeldused kaitsetööstuse innovatsiooni ja tootmisvõimekuse kasvuks, pakkudes stabiilset ja pikaajalist rahastust.

Toetada liikmesriike kaitsealaste puudujääkide katmisel, sealhulgas sõjalise liikuvuse parandamisel ja kaitseinfrastruktuuri kaasajastamisel.

Suurendada sünergiat kaitse ja muude strateegiliste sektorite vahel, näiteks digitaal-, tehisintellekti- ja kõrgtasemel arvutusvõimekuse arendamisel.

Mõju ja sihtrühm

Mõju valdkonnad

Riigikaitse

Mõju sihtrühmale: Mõju avaldub liikmesriikidele ja kaitsetööstusele. Kasu saavad väikesed ja keskmise suurusega ettevõtted (VKE-d) ja idufirmad, kellel on nüüd paremad võimalused rahastuseks ELi programmidest. Kasu saavad ka suuremad kaitsetehnoloogia tootjad, kes arendavad näiteks droone, tehisintellekti, elektroonilist sõjapidamist, rakette, laskemoona või kübervõimekust.

Kaasamine

Huvigruppide kaasamine kaasvastutajate kaudu.

EN EN

EUROPEAN COMMISSION

Brussels, 22.4.2025

COM(2025) 188 final

2025/0103 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153,

(EU) 2023/1525 and 2024/795, as regards incentivising defence-related investments in the

EU budget to implement the ReArm Europe Plan

(Text with EEA relevance)

EN 1 EN

EXPLANATORY MEMORANDUM

1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

President Von der Leyen announced in the Political Guidelines that a new era for defence lies

ahead of us. The EU will work in the next five years to build a true European Defence Union.

The last decades have exposed a chronic underinvestment and lack of efficient spending in

our military capabilities, affecting the production capacities of the European defence

technological and industrial base (EDTIB) and its innovation potential, while fragmenting

nationally the defence market. To frame this new approach and to identify the EU investment

needs, the European Commission and the High Representative presented a Joint White Paper

- European Defence Readiness 2030 on 19 March 2025.

The White Paper highlights that Member States face an acute and growing threat, requiring a

coordinated reply in the spirit of solidarity. War, aggression and other hostile acts have been

affecting the continent. The only way to ensure peace and deciding on the EU’s own future is

to have the readiness to deter these actions. This requires strengthening the Union’s defence

industry so that it can produce necessary equipment to deter potential aggressors. The EU has

a strong foundation in terms of wealth and productive power to unleash resources and latent

technological and industrial power. However, the current state of defence readiness is

compromised by decades of under-investment in the sector, underscoring the need for a

unified effort to strengthen EU defence posture.

To develop the necessary capabilities and military readiness to credibly deter armed

aggression and secure the future of the EU, a massive increase in European defence spending

is needed over a prolonged period. This requires a combined and sustained effort at the EU

and Member States level to invest collectively in EU’s defence. This will provide the Union’s

defence industry the long-term predictability it needs to invest in new production capacities.

The STEP Regulation supports EU’s competitiveness and technological advantage. Support to

the development and manufacturing of certain defence technologies is today possible under

STEP, including AI, cybersecurity technologies or drones.

However, the EU must do more to support the urgent need to increase European defence

investments with the EU budget.

Following President von der Leyen’s letter on 4 March, addressed to the European Council,

this proposal aims to extend the scope of STEP by introducing a fourth strategic sector

covering all defence-related technologies and products, including those falling under the

priority capability areas identified in the White Paper.

STEP could be thus leveraged to direct additional resources and investments into the defence

sector, notably its technological and industrial base.

To that end, this proposal introduces modifications to the STEP Regulation, as well as to the

regulations of other programmes covered by STEP: the European Defence Fund (EDF), the

Digital Europe Programme (DEP) and Horizon Europe (HE). In addition, this proposal will

also amend the regulation on supporting ammunition production (ASAP) and the Connecting

Europe Facility (CEF) to further channel EU funds towards defence industry and

technologies.

EN 2 EN

The EDF amendment aims to enable cumulation of funding between the EDF and other Union

programmes for the same action and introduces the possibility to transfer resources allocated

to Member States under cohesion policy funds to the EDF. ASAP is also amended to enable

for similar transfers from Member States and to extend the applicability of the Regulation

beyond 30 June 2025.

The DEP amendment stresses the support to dual-use actions as a general and specific

objective of the instrument and the possibility to use the budget flexibility to support

additional well focused investments for the competitiveness and strategic autonomy of the

EU.

The Horizon Europe programme amendment will enable support to technologies with

potential dual-use applications under the European Innovation Council (EIC) Accelerator, as

well as equity support for technologies with a focus on defence applications for scale-up.

Unused amounts and potential returns from investments made by the EIC Fund during the

pilot phase under Horizon 2020 should be made available in order to finance additional

projects in dual use and defence benefitting from the amended scope.

Thanks to this proposal, the Commission could also award STEP Seals1 under HE, EDF and

DEP to high potential projects in the defence sector, with the objective to attract funding from

other sources (other EU funds, national funds, private or institutional investors).

The Commission proposed on 1 April 2025 to modify the European Regional Development

Fund (ERDF)/Cohesion Fund (CF), Just Transition Fund (JTF) and European Social Fund +

(ESF+) Regulations to further promote investments in defence as part of the mid-term review

of Cohesion policy.

This proposal complements the mid-term review of Cohesion policy. The extension of the

scope of STEP would allow investments on the development and manufacturing of critical

technologies in defence to be supported under the existing STEP specific objectives in ERDF

and CF. Similarly, skills relevant for the development/manufacturing of critical technologies

in the defence sector could be supported also under STEP through the ESF+.

A coordinated approach at EU-level is needed to provide for seamless mobility for military

personnel and equipment throughout Europe. CEF, as a centrally managed programme, can

ensure the selection of military mobility projects with high EU added value and maturity for a

fast and coordinated implementation across Member States, based on the military mobility

corridors. CEF also guarantees the involvement of EU Military Staff in the selection of

projects and that selected projects comply with the technical standards needed for dual-use

transport infrastructure.

The proposal for the mid-term review of the Cohesion policy enables Member States to use

current cohesion funding to invest in defence or dual use infrastructure to foster military

mobility, benefiting from a pre-financing of 30% of the amounts programmed and the

possibility to apply a Union financing of up to 100%. Those investments shall primarily focus

on the four EU Priority Military Mobility Corridors. For investments in military mobility, the

Communication accompanying the mid-term review of Cohesion policy encourages Member

States to make use of the possibility to transfer resources allocated to them in shared

management to CEF, while benefitting from the same advantageous pre- and co-financing

1 The STEP Seal is the Sovereignty Seal defined in Regulation (EU) 2024/795

EN 3 EN

rates as cohesion funding. An amendment to the CEF Regulation is proposed to facilitate this

process.

The CEF programme amendment for the digital sector will enable the connected digital

capacities required for the development of defence products and technologies, including

connecting cloud, AI and AI Gigafactories.

• Consistency with existing policy provisions in the policy area

The proposal is consistent with the objectives followed by the EU programmes mentioned

above and the cohesion policy funds. It provides targeted amendments of Regulations (EU)

2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153, (EU) 2023/1525 and (EU)

2024/795.

• Consistency with other Union policies

The proposal is limited to targeted amendments of Regulations (EU) 2021/694, (EU)

2021/695, (EU) 2021/697, (EU) 2021/1153, (EU) 2023/1525 and (EU) 2024/795 and

maintains consistency with other Union policies.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

The proposal is based on Articles 114, 164, 172, 173, 175, third paragraph, 176, 177, 178,

182,183, 188, and 192 (1) of the Treaty on the Functioning of the European Union.

• Subsidiarity (for non-exclusive competence)

The proposal aims to encourage investments in defence by providing incentives, removing

potential obstacles and ensuring greater flexibility and simplification. The same result cannot

be achieved through actions at national level.

• Proportionality

The proposal aims at mobilising investments in defence and providing greater flexibility and

simplification for accelerating investments. The measures do not go beyond what is necessary

to achieve these goals.

• Choice of the instrument

A Regulation is the appropriate instrument as it provides directly applicable rules for the

support and because amendments have to be introduced to existing Regulations.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER

CONSULTATIONS AND IMPACT ASSESSMENTS

• Ex-post evaluations/fitness checks of existing legislation

N/A

• Stakeholder consultations

N/A

• Collection and use of expertise

N/A

EN 4 EN

• Impact assessment

This proposal does not create a new instrument but is implemented through existing tools

under the EU budget, which are amended to be able to better mobilise investment resources

into defence. These existing instruments, such as Horizon Europe, Digital Europe Programme,

the European Defence Fund or Connecting Europe Facility, have been subject to an impact

assessment. This analysis, carried out in impact assessments or analytical staff working

documents, covers the most significant impacts of this proposal. For these reasons, another

impact assessment is not needed. Moreover, the limited and targeted changes do not require a

separate impact assessment.

• Regulatory fitness and simplification

N/A

• Fundamental rights

N/A

4. BUDGETARY IMPLICATIONS

This initiative will be financed by existing resources, within the agreed envelopes of the

programmes concerned and the allocated HR.

The proposal will reinforce the envelop of the EIC by EUR 210 million from the unused

amounts and reflows of the EIC pilot of Horizon 2020.

5. OTHER ELEMENTS

• Implementation plans and monitoring, evaluation and reporting arrangements

The implementation of the measure will be monitored and reported upon in the framework of

the general reporting mechanisms established under each programme and fund.

• Explanatory documents (for directives)

N/A

EN 5 EN

2025/0103 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153,

(EU) 2023/1525 and 2024/795, as regards incentivising defence-related investments in the

EU budget to implement the ReArm Europe Plan

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular

Articles 114, 164, 172, 173, Article 175, third paragraph, Articles 176, 177 and 178,182 183,

188, 192(1) thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee2,

Having regard to the opinion of the Committee of the Regions3,

Acting in accordance with the ordinary legislative procedure,

Whereas:

(1) The unprecedented geopolitical instability and the rapid deterioration of regional and

global threat levels require an urgent and significant step up of the Union spending on

research and development, industrial capacity and development of infrastructures

connected with security and defence. As identified in the Joint White Paper for

European Defence Readiness 2030, the Union should do more to support the urgent

need to increase European defence-related investments with the Union budget.

(2) The Strategic Technologies for Europe Platform (STEP) established by Regulation

(EU) 2024/795 of the European Parliament and of the Council4 is an initiative aimed at

boosting Union competitiveness by mobilizing funds from 11 existing Union

programmes towards critical technologies in 3 strategic sectors: digital technologies

and deep tech innovation, clean and resource-efficient technologies, and

biotechnologies. As such, it is a good vehicle to mobilise, in a coordinated and

synergetic manner, Union resources towards defence, including key digital frontier

technologies required for the development of defence products and technologies.

2 OJ C , , p. . 3 OJ C , , p. . 4 Regulation (EU) 2024/795 of the European Parliament and of the Council of 29 February 2024

establishing the Strategic Technologies for Europe Platform (STEP), and amending Directive

2003/87/EC and Regulations (EU) 2021/1058, (EU) 2021/1056, (EU) 2021/1057, (EU) No 1303/2013,

(EU) No 223/2014, (EU) 2021/1060, (EU) 2021/523, (EU) 2021/695, (EU) 2021/697 and (EU)

2021/241 (OJ L, 2024/795, 29.2.2024, ELI: http://data.europa.eu/eli/reg/2024/795/oj)

EN 6 EN

(3) While support to technologies having defence implications is possible today under the

3 existing strategic sectors identified in STEP, it appears necessary to increase the

potentialities of development of research, industry and innovation in the defence area

by setting out a fourth strategic sector in STEP focussed on defence technologies.

This new strategic sector should ensure that the STEP incentives are used to increase

Union funding in defence technologies and contribute to European competitiveness in

line with STEP objectives. Defence technologies should be understood as those

referred to in the Annex to Directive 2009/43/EC and include, in particular,

technologies in the areas identified by the European Council on March 6th 2025,

namely: air and missile defence, artillery systems, including deep precision strike

capabilities, missiles and ammunition, drones and anti-drone systems, strategic

enablers, including in relation to space and critical infrastructure protection, military

mobility, cyber, artificial intelligence and electronic warfare. As regards artificial

intelligence, AI Gigafactories should become key infrastructures to expand rapidly the

power of AI in defence technologies.

(4) In addition, in order to optimise the capacity of the programmes covered by STEP to

mobilize Union’s resources towards defence, it is necessary to clarify that these

programmes can pursue objectives and activities that are related to improving the

competitiveness of the European Defence Technological and Industrial basis (EDTIB)

as well as research and development activities in the defence field.

(5) Horizon Europe established by Regulation (EU) 2021/695 of the European Parliament

and of the Council5 is the Union’s key funding programme for research and

innovation. The European Innovation Council (EIC) Accelerator established by that

Regulation provides support, in particular, for innovations with breakthrough potential

and of a disruptive nature with scale-up potential that may be too risky for private

investors. SMEs operating within the defence sector require financing for the

commercialization of innovative products. However, these companies face higher

barriers to access finance compared to SMEs in other sectors. Whereas the support to

defence research and development is done through the European Defence Fund (EDF),

which is a specific programme of Horizon Europe, it is appropriate to open the EIC

Accelerator for actions with potential dual-use applications. Support to scale-up under

the EIC Accelerator should also be extended to non-bankable SMEs, including start-

ups and non-bankable small mid-caps, including entities which have already received

support from the Accelerator carrying out breakthrough and disruptive non-bankable

innovation with a focus on defence applications. This justifies a targeted exception to

the principle set out in Article 7(1) of Regulation (EU) 2021/695 of the European

Parliament and of the Council according to which research and innovation activities

under Horizon Europe have an exclusive focus on civil applications while not

undermining the objective of ensuring unnecessary duplications.

(6) Moreover, to ensure that appropriate resources are directed to the funding of dual use

and defence projects under Horizon Europe it is appropriate to derogate to Article

212(3) of the Financial Regulation in order to ensure that repayments, including

reimbursed advances, revenues and unused amounts net of fees and costs of EIC

blended finance investment component of the EIC pilot under Horizon 2020 are not

5 Regulation (EU) 2021/695 of the European Parliament and of the Council of 28 April 2021 establishing

Horizon Europe – the Framework Programme for Research and Innovation, laying down its rules for

participation and dissemination, and repealing Regulations (EU) No 1290/2013 and (EU) No 1291/2013

(OJ L 170 12.5.2021, p. 1, ELI: http://data.europa.eu/eli/reg/2021/695/2024-03-01)

EN 7 EN

directed to the Union budget but reinvested in the EIC Fund in order to finance

additional projects in dual use and defence benefitting from the amended scope . The

timeframe set out in Article 212(3) of the Financial Regulation should also be adapted,

by inserting a derogation, to allow for that possibility.

(7) The European Defence Fund (EDF) set out in Regulation (EU) 2021/697 of the

European Parliament and of the Council6, is the leading programme for enhancing the

competitiveness, innovation, efficiency and technological autonomy of the Union’s

defence industry. The EDF also aims at supporting actions that are conducive to

developing disruptive technologies for defence. In order to better address the

specificities of such actions, such as their small scale or their need for a quick support,

it is appropriate to simplify the procedures to decide on the support of these actions

while in the same time framing the conditions for the decision on such a support in

the work programme. .

(8) It is also necessary to exploit synergies between EDF and other Union programmes.

To that purpose, it should be possible for Member States, European Union institutions,

bodies and agencies, third countries, international financial institutions or other third

parties to provide voluntary contributions to the Programme, as external assigned

revenues. Voluntary transfers of resources allocated to Member States in shared

management to the EDF and the combination of contributions from EDF with other

Union programmes for specific actions should be possible, provided that the

cumulative Union support does not exceed the total eligible costs of the action.

(9) The Digital Europe Programme (DEP) established by Regulation (EU) 2021/694 of

the European Parliament and of the Council7 aims to support and accelerate the digital

transformation of the European economy, industry and society and to improve the

competitiveness of Europe in the global digital economy. In this context, the

programme should also aim at supporting, in particular, projects, services and

competences with potential dual-use application under all its specific objectives.

(10) To enhance technological sovereignty and competitiveness, the Union needs the

computing, cloud and data infrastructures that AI leadership requires. As part of the AI

Continent strategy, the AI factories and Gigafactories are essential for the Union to be

able to compete on the global level and ensure its strategic autonomy and

competitiveness in science, dual use research and in critical industrial sectors,

including the defence industry. Such next-generation models require extensive

connected computing infrastructure for breakthroughs in specific domains including

defence. It is therefore appropriate to add, in the Specific Objective 1 – High

Performance Computing of DEP, a supplementary operational objective dedicated to

the deployment and operation of AI Factories and new generation of IA Gigafactories

specialised in developing, training, and running the most complex, very large, AI

models and applications, including hardware and software necessary for such

deployment.

6 Regulation (EU) 2021/697 of the European Parliament and of the Council of 29 April 2021 establishing

the European Defence Fund and repealing Regulation (EU) 2018/1092 (OJ L 170 12.5.2021, p. 149,

ELI: http://data.europa.eu/eli/reg/2021/697/2024-03-01). 7 Regulation (EU) 2021/694 of the European Parliament and of the Council of 29 April 2021 establishing

the Digital Europe Programme and repealing Decision (EU) 2015/2240 (OJ L 166 11.5.2021, p. 1,

ELI: http://data.europa.eu/eli/reg/2021/694/2023-09-21)

EN 8 EN

(11) In the specific Objective 5 of DEP – Deployment and Best Use of Digital Capacity

and interoperability, it is also necessary to add, in the operational objective defined to

support the public sector and areas of public interest, a reference to defence in order to

clarify that the financial contribution of the Union under such an Objective can be

extended to that sector.

(12) It is also necessary to adapt the eligibility rules that might be set out in the work

programme of DEP so that it is possible to provide that legal entities established in

associated countries and legal entities that are established in the Union but are

controlled from third countries are not eligible to participate in all or some actions

focused on technologies with dual-use potential under any specific objective. In such

cases, calls for proposals and calls for tenders should be restricted to legal entities

established or deemed to be established in Member States and controlled by Member

States or by nationals of Member States.

(13) Regulation (EU) 2023/1525 of the European Parliament and of the Council supporting

ammunition production (ASAP)8 was adopted to financially support the urgent

strengthening of the EDTIB responsiveness and ability to ensure the timely

availability and supply of ground-to-ground and artillery ammunition as well as

missiles. Voluntary transfers of resources allocated to Member States in shared

management to the ASAP instrument as well as additional voluntary contributions

from Member States or other relevant stakeholders should contribute to pursue the

support to ramping up the Union’s manufacturing capacities beyond 30 June 2025.

Regulation (EU) 2023/1525 should therefore be amended to introduce such a

possibility. Since that Regulation has shown is usefulness to develop new production

capacities of powder/propellant, explosives, shells, testing capacity, and missiles all

across the Union, it is appropriate to ensure that its application is extended until 31

December 2026.

(14) The Connecting Europe Facility (CEF) set out in Regulation (EU) 2021/1153 of the

European Parliament and of the Council,9 aims to accelerate investment in the field of

trans-European networks, enabling synergies between the transport, energy and digital

sectors. In order to support the connected computing infrastructure required by

defence products and technologies and beyond these areas, the objectives of the CEF

digital sector within that Regulation should be extended to the deployment and

provision of digital capacities such as cloud, AI and AI Gigafactories.

(15) Military mobility is also one of the objectives of the CEF programme. The Joint White

Paper for European Defence Readiness 2030 recognised military mobility as an

essential enabler for European security and defence and stressed the Union added-

value in supporting dual-use infrastructure for mobility. The mid-term review of the

European Regional Development Fund (ERDF) and the Cohesion Fund both

established by Regulation (EU) 2021/1058 of the European Parliament and of the

8 Regulation (EU) 2023/1525 of the European Parliament and of the Council of 20 July 2023 on

supporting ammunition production (ASAP) (OJ L 185, 24.7.2023, p. 7–25,

ELI: http://data.europa.eu/eli/reg/2023/1525/oj) 9 Regulation (EU) 2021/1153 of the European Parliament and of the Council of 7 July 2021 establishing

the Connecting Europe Facility and repealing Regulations (EU) No 1316/2013 and (EU) No 283/2014

(OJ L 249 14.7.2021, p. 38, ELI: http://data.europa.eu/eli/reg/2021/1153/2024-07-18)

EN 9 EN

Council10 introduced the possibility to invest in defence or dual use infrastructure to

foster military mobility benefiting from a pre-financing of 30% of the amounts

programmed and the possibility to apply a Union financing of up to 100%. In cases

where Member States transfer resources allocated to them in shared management to

CEF they should benefit from the same conditions on pre-financing and co-financing

for dual-use transport infrastructure projects as introduced in the ERDF and Cohesion

Fund. In such a case, these amounts should be reserved to projects developing the

Military Mobility corridors as identified by the Member States in Military

Requirements for Military Mobility within and beyond the Union as well as digital

connectivity and capacities..

(16) Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153, (EU)

2023/1525 and (EU) 2024/795 should therefore be amended accordingly.

(17) Given the urgent need to enable crucial investments in defence in the context of

pressing geopolitical challenges, this Regulation should enter into force on the day

following that of its publication in the Official Journal of the European Union.

(18) Since the objective of this Regulation, namely to strengthen research and development

activities in dual use and defence, improve the competitiveness of the Union’s defence

industry and therefore contribute to the Union’s defence by refocusing investments of

these critical priorities, cannot be sufficiently achieved by the Member States, but can

rather be better achieved at Union level, the Union may adopt measures in accordance

with the principle of subsidiarity as set out in Article 5 TEU. In accordance with the

principle of proportionality as set out in that Article, this Regulation does not go

beyond what is necessary to achieve those objectives,

HAVE ADOPTED THIS REGULATION:

Article 1

Regulation (EU) 2021/694 [Digital Europe Programme] is amended as follows:

(1) in Article 3 (1), second subparagraph, the following point is added:

‘(c) support dual-use projects, services, competences and applications.’;

(2) in Article 4 (1) the following point is added:

‘(d) deploy and operate AI Factories and new generation AI Gigafactories specialised

in developing, training, and running the most complex, very large, AI models and

applications, including hardware and software necessary for such deployment.’;

(3) in Article 8 (1), point (a) is replaced by the following:

‘(a) support the public sector and areas of public interest, such as health and care,

education, judiciary, customs, defence, transport, mobility, energy, environment,

cultural and creative sectors, including relevant businesses established within the

Union, to effectively deploy and access state-of-the-art digital technologies, such as

HPC, quantum, AI and cybersecurity;’;

(4) in Article 12, paragraph 5 is replaced by the following:

10 Regulation (EU) 2021/1058 of the European Parliament and of the Council of 24 June 2021 on the

European Regional Development Fund and on the Cohesion Fund (OJ L 231 30.6.2021, p. 60,

ELI: http://data.europa.eu/eli/reg/2021/1058/2024-12-24)

EN 10 EN

‘5. The work programme may also provide that legal entities established in

associated countries and legal entities that are established in the Union but are

controlled from third countries are not eligible to participate in all or some actions

under Specific Objective 3 for duly justified security reasons, and in actions focused

on technologies with dual-use potential under any specific objective. In such cases,

calls for proposals and calls for tenders shall be restricted to legal entities established

or deemed to be established in Member States and controlled by Member States or

by nationals of Member States. Such restrictions may be applied to access to the

capacities deployed under such calls.’

Article 2

Regulation (EU) 2021/695 [Horizon Europe] is amended as follows:

(1) In Article 46, the following paragraph 4a is inserted:

‘4a. By derogation from Article 212(3) of the Financial Regulation, repayments

including reimbursed advances, revenues and unused amounts net of fees and costs

of EIC blended finance of the EIC pilot under Horizon 2020 shall be considered to be

internal assigned revenues in accordance with Article 21(3), point (f) and Article

21(4) and (5) of the Financial Regulation and the time restriction of two years set out

in the second subparagraph of Article 212(3) of the Financial Regulation shall apply

as from [date of entry into force of this Regulation].’

(2) Article 48(1), second subparagraph is amended as follows:

(a) in point (a), the following sentence is added:

‘As an exception to Article 7(1), such support may include potential dual-use

applications.’;

(b) in point (b) the following sentence is added:

‘As an exception to Article 7(1), such support may include potential dual-use

applications.’;

(c) in point (c), the following sentence is added:

‘As an exception to Article 7(1), such support may include potential dual-use

applications.’;

(d) in point (d), the following sentence is added:

‘As an exception to Article 7(1), such support may include innovation in

critical technologies with focus on defence applications.’;

Article 3

Regulation (EU) 2021/697 [European Defence Fund] is amended as follows:

(1) Article 6 is replaced by the following:

EN 11 EN

‘Article 6

Support for disruptive technologies for defence

1. The Commission shall support actions that are conducive to developing disruptive

technologies for defence in the areas of intervention defined in the work programmes

referred to in Article 24.

2. The work programmes shall lay down the most appropriate forms of funding,

selection and award criteria and procedures, and implementation for disruptive

technologies for defence.’;

(2) the following Article is inserted:

‘Article 8a

Cumulative funding and transfers of resources

1. An action that has received a contribution from another Union programme may also

receive a contribution under the Programme, provided that the contributions do not

cover the same costs. The rules of the relevant Union programme shall apply to the

corresponding contribution to the action. The support from the different Union

programmes may be calculated on a pro-rata basis in accordance with the documents

setting out the conditions for support.

2. Resources allocated to Member States under shared management may, at the request

of the Member State concerned, be transferred to the Programme subject to the

conditions set out in the relevant provisions of Regulation (EU) 2021/1060 for 2021-

2027. The Commission shall implement those resources directly in accordance with

point (a) of the first subparagraph of Article 62(1) of the Financial Regulation or

indirectly in accordance with point (c) of that subparagraph. Such resources shall be

used for the benefit of the Member State concerned.

Resources transferred in accordance to paragraph 2 of this Article may, by

derogation from Article 13(2) of this Regulation, be used for the purpose of

contributing to the funding of eligible actions under Article 10 of this Regulation up

to 100 % of the eligible costs.

3. Where the Commission has not entered into a legal commitment under direct or

indirect management for resources transferred in accordance with paragraph 3 and at

the latest by 30 September 2027, the corresponding uncommitted resources may be

transferred back to one or more respective source programmes, at the request of the

Member State concerned, in accordance with the conditions set out in the relevant

provisions of Regulation (EU) 2021/1060.

4. Member States, European Union institutions, bodies and agencies, third countries,

international organisations, international financial institutions or other third parties,

may provide additional financial contributions to the Programme. Such financial

contributions shall constitute external assigned revenue within the meaning of Article

21(2), points (a), (d), or (e) or Article 21(5) of the Financial Regulation.’;

Article 4

Regulation (EU) 2021/1153 [Connecting Europe Facility]is amended as follows:

EN 12 EN

(1) Article 3(2) is amended as follows:

(c) point (c) is replaced by the following:

‘(c ) in the digital sector: to contribute to the development of projects of common

interest relating to the deployment of and access to safe and secure very high

capacity networks, including 5G systems, to the set-up and deployment of digital

capacities such as cloud, AI and AI Gigafactories, to the increased resilience and

capacity of digital backbone networks on Union territories by linking them to

neighbouring territories, as well as to the digitalisation of transport and energy

networks.’;

(2) in Article 8(4), the following point (f) is added:

‘(f) projects of common interest contributing to the set-up and deployment or

significant upgrade of digital capacities, including cloud, AI and AI Gigafactories

shall be prioritized according to the extent they significantly contribute to improve

the performance, resilience and security of transport, energy and digital

infrastructures that are critical for the implementation of the internal market.’;

(3) in Article 9(4), the following point (f) is added:

‘(f) actions supporting the set-up and deployment of digital capacities in cloud, AI

and AI Gigafactories.’;

(4) in Article 15 (2), the following point (ba) is added:

‘(ba) Subject to the transfer of the necessary resources to the CEF in the context of

the mid-term review of programmes supported by the European Regional

Development Fund and Cohesion Fund [add legal reference to Regulation adopted

pursuant to COM(2025)123, 2025/0084 (COD)], pursuant to Article 4(13), for works

relating to the specific objectives referred to in Article 3(2), point (a)(ii), the

following conditions apply:

(i) co-financing rates may be increased to a maximum of 100%;

(ii) actions are entitled to a pre-financing payment representing at least 30% of the

amount allocated in the grant agreement;

(iii) actions shall be located on one or more of the four EU Priority Military

Mobility Corridors identified by Member States in Annex II to the Military

Requirements for Military Mobility within and beyond the Union, as adopted

by the Council on [18 March 2025 and with reference ST 6728/25 ADD1] and

shall comply with the infrastructure requirements as set out in Commission

Implementing Regulation (EU) 2021/1328.

Article 5

Regulation (EU) 2023/1525 [ASAP] is amended as follows:

(1) in Article 6, the following paragraphs are inserted:

‘3a. Member States, Union institutions, bodies and agencies, third countries,

international organisations, international financial institutions or other third parties,

may provide additional financial contributions to the Instrument. Such financial

contributions shall constitute external assigned revenue within the meaning of Article

21(2), points (a), (d) or (e), or Article 21(5) of the Financial Regulation.

EN 13 EN

3b. Resources allocated to Member States under shared management may, at the

request of the Member States concerned, be transferred to the Instrument subject to

the conditions set out in the relevant provisions of Regulation (EU) 2021/1060. The

Commission shall implement those resources directly in accordance with Article

62(1), first subparagraph, point (a), of the Financial Regulation or indirectly in

accordance with point (c) of that subparagraph. Such resources shall be used for the

benefit of the Member State concerned.

3c. Resources transferred in accordance to paragraph 3b of this Article may, by

derogation from Article 19c(6) of this Regulation, be used for the purpose of

contributing to the funding of eligible actions under Article 13 of this Regulation up

to 100 % of the eligible costs.

3d. Where the Commission has not entered into a legal commitment under direct or

indirect management for resources transferred in accordance with paragraph 3 and at

the latest by 30 September 2027, the corresponding uncommitted resources may be

transferred back to one or more respective source programmes, at the request of the

Member State concerned, in accordance with the conditions set out in the relevant

provisions of Regulation (EU) 2021/1060.’

(2) in Article 24, the second paragraph is replaced by the following:

‘This Regulation shall apply until 31 December 2026. That shall not affect the

continuation or modification of actions initiated pursuant to this Regulation or any

actions necessary to protect the financial interests of the Union.’

Article 6

In Article 2(1), point (a) of Regulation (EU) 2024/795, [Strategic Technologies for Europe

Platform (STEP)] the following point is added:

‘(iv) defence technologies;’

Article 7

This Regulation shall enter into force on the day following that of its publication in the

Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in the Member States in

accordance with the Treaties.

Done at Brussels,

For the European Parliament For the Council

The President The President

EN 1 EN

LEGISLATIVE FINANCIAL AND DIGITAL STATEMENT

1. FRAMEWORK OF THE PROPOSAL/INITIATIVE ................................................. 3

1.1. Title of the proposal/initiative ...................................................................................... 3

1.2. Policy area(s) concerned .............................................................................................. 3

1.3. Objective(s) .................................................................................................................. 3

1.3.1. General objective(s) ..................................................................................................... 3

1.3.2. Specific objective(s) ..................................................................................................... 3

1.3.3. Expected result(s) and impact ...................................................................................... 3

1.3.4. Indicators of performance ............................................................................................ 3

1.4. The proposal/initiative relates to: ................................................................................. 4

1.5. Grounds for the proposal/initiative .............................................................................. 4

1.5.1. Requirement(s) to be met in the short or long term including a detailed timeline for

roll-out of the implementation of the initiative ............................................................ 4

1.5.2. Added value of EU involvement (it may result from different factors, e.g.

coordination gains, legal certainty, greater effectiveness or complementarities). For

the purposes of this section 'added value of EU involvement' is the value resulting

from EU action, that is additional to the value that would have been otherwise

created by Member States alone. ................................................................................. 4

1.5.3. Lessons learned from similar experiences in the past .................................................. 4

1.5.4. Compatibility with the multiannual financial framework and possible synergies with

other appropriate instruments ....................................................................................... 5

1.5.5. Assessment of the different available financing options, including scope for

redeployment ................................................................................................................ 5

1.6. Duration of the proposal/initiative and of its financial impact .................................... 6

1.7. Method(s) of budget implementation planned ............................................................. 6

2. MANAGEMENT MEASURES................................................................................... 8

2.1. Monitoring and reporting rules .................................................................................... 8

2.2. Management and control system(s) ............................................................................. 8

2.2.1. Justification of the budget implementation method(s), the funding implementation

mechanism(s), the payment modalities and the control strategy proposed .................. 8

2.2.2. Information concerning the risks identified and the internal control system(s) set up

to mitigate them............................................................................................................ 8

2.2.3. Estimation and justification of the cost-effectiveness of the controls (ratio between

the control costs and the value of the related funds managed), and assessment of the

expected levels of risk of error (at payment & at closure) ........................................... 8

2.3. Measures to prevent fraud and irregularities ................................................................ 9

3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE ............ 10

EN 2 EN

3.1. Heading(s) of the multiannual financial framework and expenditure budget line(s)

affected ....................................................................................................................... 10

3.2. Estimated financial impact of the proposal on appropriations ................................... 12

3.2.1. Summary of estimated impact on operational appropriations.................................... 12

3.2.1.1. Appropriations from voted budget ............................................................................. 12

3.2.1.2. Appropriations from external assigned revenues ....................................................... 17

3.2.2. Estimated output funded from operational appropriations......................................... 22

3.2.3. Summary of estimated impact on administrative appropriations ............................... 24

3.2.3.1. Appropriations from voted budget .............................................................................. 24

3.2.3.2. Appropriations from external assigned revenues ....................................................... 24

3.2.3.3. Total appropriations ................................................................................................... 24

3.2.4. Estimated requirements of human resources.............................................................. 25

3.2.4.1. Financed from voted budget....................................................................................... 25

3.2.4.2. Financed from external assigned revenues ................................................................ 26

3.2.4.3. Total requirements of human resources ..................................................................... 26

3.2.5. Overview of estimated impact on digital technology-related investments ................ 28

3.2.6. Compatibility with the current multiannual financial framework.............................. 28

3.2.7. Third-party contributions ........................................................................................... 28

3.3. Estimated impact on revenue ..................................................................................... 29

4. DIGITAL DIMENSIONS .......................................................................................... 29

4.1. Requirements of digital relevance .............................................................................. 30

4.2. Data ............................................................................................................................ 30

4.3. Digital solutions ......................................................................................................... 31

4.4. Interoperability assessment ........................................................................................ 31

4.5. Measures to support digital implementation .............................................................. 32

EN 3 EN

1. FRAMEWORK OF THE PROPOSAL/INITIATIVE

1.1. Title of the proposal/initiative

Proposal for a Regulation of the European Parliament and of the Council Amending

Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153, (EU)

2023/1525 and 2024/795 as regards incentivising defence-related investments in the

EU budget to implement the ReArm Europe Plan.

1.2. Policy area(s) concerned

A new era for European Defence and Security

1.3. Objective(s)

1.3.1. General objective(s)

To incentivise defence-related investments in the EU budget and strengthen the EU's

defence industry and technological base in line with the ReArm Europe Plan.

1.3.2. Specific objective(s)

• To enable the extension of the Strategic Technologies for Europe Platform

(STEP) to cover defence-related technologies and products, and to strengthen

the EU's strategic autonomy in the defence sector.

• To amend the European Defence Fund (EDF) to 1) better exploit synergies

with other Union programmes by allowing for the combination of EDF

contributions with other Union programmes for specific actions; 2) allowing

for voluntary transfers of resources allocated to Member States in shared

management to the EDF ; 3) streamline the evaluation and funding process the

development of disruptive technologies for defence..

• To amend the Act in Support of Ammunition Production (ASAP) Regulation to

1) introduce the possibility of voluntary transfers of resources allocated to

Member States in shared management to ASAP, as well as additional voluntary

contributions from Member States or other relevant stakeholders; 2) extend the

application of the ASAP Regulation until 31 December 2026 to ensure

continued support for the development of new production capacities for

ammunition and related products.

• To amend the Digital Europe Programme (DEP) to enhance its focus on

strategic autonomy and competitiveness, and better support dual-use

technologies and applications. This includes the deployment of digital

infrastructure such as artificial intelligence, high-performance computing, and

cybersecurity, e.g. through the development of AI Factories and Gigafactories.

The amendment will also ensure that the programme's funding is used in a way

that aligns with the EU's strategic interests, including by adapting eligibility

rules for dual-use actions.

• To amend Horizon Europe to enable support to projects with potential dual-use

applications under the European Innovation Council (EIC) Accelerator, as well

as projects with a focus on defence applications under the EIC STEP scale-up.

• To amend the Connecting Europe Facility (CEF) to extend its digital sector

objectives to include the deployment and provision of digital capacities such as

EN 4 EN

cloud, AI, and AI Gigafactories, and to contribute to the development of

projects of common interest relating to efficient, interconnected and

multimodal networks and infrastructure for smart, interoperable, sustainable,

inclusive, accessible, safe and secure mobility in accordance with the

objectives of Regulation (EU) No 1315/2013.

1.3.3. Expected result(s) and impact

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.

The proposed mini-omnibus regulation is expected to have the following effects on

the beneficiaries and groups targeted:

Increased investments in defence: the proposal will provide Member States with

more flexibility to use the EU budget to address their defence needs, leading to a

significant increase in defence investments, in line with the objectives of the ReArm

Europe Plan.

Enhanced European defence technological and industrial base (EDTIB): by

supporting the development of defence and dual-use technologies, the proposal will

enable the EU to reduce its dependence on non-EU suppliers and strengthen its

strategic autonomy, ultimately strengthening the EDTIB.

Improved military readiness, capabilities, and mobility: the proposal will enable

Member States to meet their defence capability gaps, develop the necessary military

readiness to credibly deter armed aggression, and enhance military mobility across

the continent, including through the develoment of Military Mobility corridors. The

new pre- and co-financing rates for dual-use transport infrastructure projects should

serve as incentives for Member States to transfer ressources from shared

management to CEF, enabling a coordinated approach to military mobility

investments across Member States and contributing to the objectives of the Joint

White Paper for European Defence Readiness 2030.

Support to SMEs and start-ups: by opening the European Innovation Council (EIC)

Accelerator and EIC Scale Up to dual-use and defence technologies, the proposal

will promote innovation and competitiveness in the EU, strengthen the EDTIB, and

provide opportunities for SMEs and start-ups to develop and grow.

Increased synergies with other sectors: the proposal will facilitate increased

synergies between defence and other sectors, such as digital, by enabling the

financing of initiatives like AI Factories and AI Gigafactories, as well asdual-use

projects with potential spill-over effects for innovation and competitiveness in areas

like research, technology, and industry.

These expected results and impacts will benefit various stakeholders, including:

- Member States, by providing greater flexibility to use EU funding in support of

security and defence

- The EU defence industry, including SMEs and start-ups, by providing opportunities

for growth and innovation and strengthening the EDTIB.

- EU citizens, by contributing to peace, security and strategic autonomy

1.3.4. Indicators of performance

Specify the indicators for monitoring progress and achievements.

EN 5 EN

Specific Objective Indicator

Enhanced European defence

technological and industrial base

(EDTIB) and supply chain

resilience

Number of defence projects supported by

STEP

Improved military mobility Number of transport infrastructure

components adapted to dual-use requirements

Support to defence innovation

Support to SMEs and start-ups

developing dual use and defence

technologies

Time reduction in evaluation and award of

EDF projects related to disruptive

technologies for defence

Number of defence and dual use SMEs and

start-ups receiving funding through the

European Innovation Council (EIC)

Accelerator and EIC STEP Scale Up

Increased synergies with other

sectors, such as digital

Number of projects funded through DEP that

have a dual-use or defence component

1.4. The proposal/initiative relates to:

 a new action

 a new action following a pilot project / preparatory action11

 the extension of an existing action

 a merger or redirection of one or more actions towards another/a new action

1.5. Grounds for the proposal/initiative

1.5.1. Requirement(s) to be met in the short or long term including a detailed timeline for

roll-out of the implementation of the initiative

The proposal aims to address the need for increased and swift investments in defence

and the development of a strong and competitive EDTIB, in line with the ReArm

Europe Plan. It aims to introduce changes to existing EU programmes, including

STEP, Horizon Europe, EDF, ASAP, DEP, and CEF, to support defence and dual-

use initiatives. The targeted amendments to EU Regulations will take effect

immediately following the adoption of the proposed Regulation. Where relevant,

they should be taken into account for the preparation and/or amendment of existing

Work Programmes of relevant initiatives (Horizon Europe, CEF, DEP, STEP, EDF).

This will enable the launch of new calls for proposals and the selection of projects

that align with the EU and MS defence and security objectives.

Timeline for implementation:

The implementation timeline for the mini-omnibus regulation will be influenced by

the existing programme cycles and the need to incorporate the changes into the

respective work programmes. For most programmes, the changes are expected to be

introduced in the next available work programme, with the first calls for proposals

launched shortly thereafter.

11 As referred to in Article 58(2), point (a) or (b) of the Financial Regulation.

EN 6 EN

For amendments that introduce the possibility for Member States to channel cohesion

policy funds towards defence-related investments (including CEF, STEP, EDF,

ASAP), in order to benefit from the additional pre-financing of 30% of the amounts

programmed, Member States should submit their programme amendments by the end

of 2025.

1.5.2. Added value of EU involvement (it may result from different factors, e.g.

coordination gains, legal certainty, greater effectiveness or complementarities). For

the purposes of this section 'added value of EU involvement' is the value resulting

from EU action, that is additional to the value that would have been otherwise

created by Member States alone.

The added value of EU action lies in its ability to coordinate investments, maximise

budget efficiency, and achieve greater effectiveness in supporting defence

investments than would be possible for any individual Member State acting alone.

The EU's role in promoting a coordinated approach to defence investment enables

MS to address their defence needs, which is essential for ensuring the security and

stability of the EU and its Member States.

Reasons for action at EU level (ex-ante):

– The need for coordinated investment in defence to address common security

challenges and threats, which cannot be effectively addressed by individual

Member States alone.

– The importance of maximising budget efficiency, maximjising

complementarity of different funding programmes and reducing duplication of

efforts, which can be achieved through EU-level coordination and cooperation.

Reasons for action at EU level (ex-ante):

– Support defence readiness and enhance military mobility, which will

strengthen MS ability to respond to common security challenges and threats.

– Increased competitiveness and innovation in the European defence industry,

resulting from the EU's coordinated approach to defence investment and the

development of a strong and competitive European Defence Technological and

Industrial Base (EDTIB).

– Maximisation of synergies among different EU financial instruments and

enhanced sclae and scope, which will enable the EU to leverage its resources

more effectively and achieve greater impact with its investments that individual

MS, particularly for large scale projects.

– Better value for money, resulting from the efficient use of resources and

reduced duplication of efforts, which will enable the EU to achieve more with

its available resources. By combining the resources and expertise of different

EU programmes, the EU can create a more comprehensive and integrated

approach to defence investment, which will yield greater benefits and returns

than could be achieved through individual programmes alone.

1.5.3. Lessons learned from similar experiences in the past

The EU has a track record of successfully adapting its funding instrumentsto respond

to emerging challenges and priorities. For example, during the COVID-19 pandemic,

the EU introduced several instruments to support the recovery and resilience of

affected regions and communities, including the Coronavirus Response Investment

EN 7 EN

Initiative (CRII) and CRII+, as well as REACT-EU (Recovery Assistance for

Cohesion and the Territories of Europe). Additionally, in response to the Russia-

Ukraine war and the resulting energy price crisis, the EU proposed a more flexible

use of its funding instruments to help Member States address various challenges.

These experiences have shown that adapting EU funding instruments can be an

effective way to respond to evolving challenges and strategic priorities.. They have

also highlighted the importance of close coordination and cooperation between the

European Commission, Member States, and relevant authorities to ensure that funds

are used effectively and efficiently.

In the context of defence investment, the EU can draw on these lessons to ensure that

the adaptation of its funding instruments is done in a way that is transparent,

accountable, and effective. By building on these past experiences, the EU can create

a more flexible and responsive framework that is better equipped to address the

complex and evolving security challenges facing the EU and its Member States.

1.5.4. Compatibility with the multiannual financial framework and possible synergies with

other appropriate instruments

The proposed targeted amendments to the relevant EU Regulations are fully

compatible with the existing Multiannual Financial Framework (MFF) 2021-2027.

The amendments do not requireadditional funding from the EU budget at allnor do

they alter the overall budget allocation for most of the programmes, as they are

designed to optimize the use of existing resources within the current programmes.

The proposed flexibilities and synergies among different EU financial instruments,

such as STEP, EDF, ASAP, CEF, and DEP, are also fully consistent with the existing

MFF. However, to achieve the objectives of the mini-omnibus proposal, additional

resources originated by reflows from the EIC pilot in the previous MFF under

Horizon 2020 will be allocated to Horizon Europe, specifically for the European

Innovation Council. This targeted reinforcement will support the development of

innovative defence and dual-use technologies, and will be implemented within the

existing MFF framework.

The proposed amendments could help inform the future MFF by providing valuable

insights and lessons learned from the implementation of the current programmes.

The experience gained from the flexibilisation of cohesion funds and the creation of

synergies among different EU financial instruments could be taken into account

when designing future EU programmes and budget allocations. This could help to

ensure that future EU funding is more effective, efficient, and better aligned EU

strategic priorities, including defence and security.

1.5.5. Assessment of the different available financing options, including scope for

redeployment

The proposed targeted amendments to the relevant EU Regulations offer a range of

financing options and opportunities for redeployment, which could help to optimize

the use of existing resources and support the development of defence capabilities and

technologies in the EU.

One of the financing options is the possibility of channeling cohesion funds to

support defence-related investments and activities, e.g. thorugh STEP.

EN 8 EN

The European Defence Fund (EDF) amendment aims to enable cumulation of

funding between the EDF and other Union programmes for the same action, allowing

for a more comprehensive and integrated approach to supporting defence-related

investments. Additionally, the amendment provides for the possibility to transfer

resources allocated to Member States under cohesion policy funds to the EDF, which

would enable Member States to redirect their cohesion policy funds to support

defence-related investments. Moreover, the ASAP amendment will enable voluntary

transfers of resources allocated to Member States under cohesion policy funds to the

ASAP instrument, as well as additional voluntary contributions from Member States.

The Digital Europe Programme (DEP) amendment provides for the possibility to use

the budget flexibility to support additional well-focused investments for the

competitiveness and strategic autonomy of the EU, including dual use.

The Horizon Europe programme amendment will enable support to projects with

potential dual-use applications under the European Innovation Council (EIC)

Accelerator (grant + equities), as well as projects with a focus on defence

applications under the EIC Accelerator scale-up scheme (equity only).

The CEF amendment will enable the connected digital capacities required for the

development of defence products and technologies, including connecting cloud, AI,

and AI Gigafactories, as well as military mobility. This will support the development

of infrastructure and technologies that are essential for security and defence. In CEF,

the military mobility envelope (EUR 1.7 billion) has been fully allocated to projects

in 2024 after three calls or proposals. Transfers of Member States from resources

under shared management are therefore an option to support further military mobility

projects under CEF.

EN 9 EN

1.6. Duration of the proposal/initiative and of its financial impact

 limited duration

–  in effect from 04/2025 to 31/12/2028

–  Financial impact from 2025 to 2027 for commitment appropriations and

from 2025 to 2030 for payment appropriations.

 unlimited duration

– Implementation with a start-up period from YYYY to YYYY

– followed by full-scale operation.

1.7. Method(s) of budget implementation planned12

 Direct management by the Commission

–  by its departments, including by its staff in the Union delegations;

–  by the executive agencies

 Shared management with the Member States

 Indirect management by entrusting budget implementation tasks to:

–  third countries or the bodies they have designated

–  international organisations and their agencies (to be specified)

–  the European Investment Bank and the European Investment Fund

–  bodies referred to in Articles 70 and 71 of the Financial Regulation

–  public law bodies

–  bodies governed by private law with a public service mission to the extent

that they are provided with adequate financial guarantees

–  bodies governed by the private law of a Member State that are entrusted

with the implementation of a public-private partnership and that are provided

with adequate financial guarantees

–  bodies or persons entrusted with the implementation of specific actions in

the common foreign and security policy pursuant to Title V of the Treaty on

European Union, and identified in the relevant basic act

–  bodies established in a Member State, governed by the private law of a

Member State or Union law and eligible to be entrusted, in accordance with

sector-specific rules, with the implementation of Union funds or budgetary

guarantees, to the extent that such bodies are controlled by public law bodies or

by bodies governed by private law with a public service mission, and are

provided with adequate financial guarantees in the form of joint and several

liability by the controlling bodies or equivalent financial guarantees and which

may be, for each action, limited to the maximum amount of the Union support.

12 Details of budget implementation methods and references to the Financial Regulation may be found on

the BUDGpedia site: https://myintracomm.ec.europa.eu/corp/budget/financial-rules/budget-

implementation/Pages/implementation-methods.aspx.

EN 10 EN

Comments

The method of budget implementation will depend on the specific programme affected by the

amendment. In particular:

For Horizon Europe/EIC Accelerator, implementation is expected to be through executive

agencies (notably EISMEA); the EIC Fund is managed by the European Investment Bank.

For STEP, CEF, DEP, EDF, and ASAP, direct management is foreseen.

For CEF, the programme is implemented through direct management and fully delegated to

the European Climate, Infrastructure and Environment Executive Agency (CINEA). Some

programme support actions are managed directly by the Commission

For Cohesion Policy, shared management with MS will apply.

EN 11 EN

2. MANAGEMENT MEASURES

2.1. Monitoring and reporting rules

The targeted amendments in the Regulation will be monitored and evaluated in

accordance with the rules and procedures established in the relevant programmes,

namely Horizon Europe, CEF, DEP, EDF, ASAP, and STEP. The frequency and

conditions for monitoring and reporting will be as specified in the respective

programme regulations and agreements.

Additionally, for provisions related to Cohesion Policy, periodical evaluation and

reporting will be conducted in line with the relevant Cohesion Policy obligations,

including the requirements for ex-ante evaluations, interim evaluations, and ex-post

evaluations, as well as the reporting requirements set out in the applicable regulations

and funding agreements.

In general, the monitoring and reporting will be carried out on a regular basis, with

the specific frequency and conditions to be determined by the relevant programme

authorities and in accordance with the applicable rules and regulations.

2.2. Management and control system(s)

2.2.1. Justification of the budget implementation method(s), the funding implementation

mechanism(s), the payment modalities and the control strategy proposed

The proposed budget implementation methods, funding implementation mechanisms,

payment modalities, and control strategy are based on the existing structures and

mechanisms already in place for the relevant programmes (Horizon Europe, CEF,

DEP, EDF, ASAP, STEP).

The amendments introduced by this Regulation do not introduce any alterations in

this regard. Instead, they build upon existing frameworks designed to ensure

effective, efficient, and economical implementation of the programmes.

The use of direct management, shared management, and executive agencies, as well

as the funding implementation mechanisms and control strategies have been

established and tested in the context of the existing programmes. The proposed

amendments do not require significant changes to these existing structures. The

Commission will rely on the existing expertise, systems, and procedures to

implement the amended programmes.

The control strategy, including the risk-based approach, ex-ante, interim, and ex-post

controls, audits, and evaluations, will continue to be applied in accordance with the

existing rules and regulations under relevant programmes. The Commission will

continue to monitor and report on the implementation of the programmes, including

the amended provisions, in accordance with the existing requirements and

procedures.

2.2.2. Information concerning the risks identified and the internal control system(s) set up

to mitigate them

The internal control systems in place for the existing programmes (Horizon Europe,

CEF, DEP, EDF, ASAP, STEP) have been designed to identify and mitigate risks,

including the risk of errors and irregularities.

EN 12 EN

The amendments introduced by this Regulation do not fundamentally alter the risk

landscape of the existing programmes. The Commission will continue to rely on the

existing internal control systems, which have been established to ensure the effective

and efficient implementation of the programmes.

2.2.3. Estimation and justification of the cost-effectiveness of the controls (ratio between

the control costs and the value of the related funds managed), and assessment of the

expected levels of risk of error (at payment & at closure)

The cost-effectiveness of the controls for the amended programmes is expected to be

in line with the existing programmes. The Commission will continue to rely on the

existing control systems, which have been established to ensure the effective and

efficient implementation of the programmes, as the amendments do not introduce

significant changes to programmes.

The Commission will continue to monitor and report on the implementation of the

programmes, including the amended provisions, in accordance with the existing

requirements and procedures.

2.3. Measures to prevent fraud and irregularities

The Commission will continue to apply the measures envisaged under the

programmes affected by the proposed Regulation to prevent fraud and irregularities,

including measures are outlined in the Commission's anti-fraud strategy.

The amended programmes will also be subject to the Commission's overall anti-fraud

framework, which includes regular monitoring and reporting on fraud risks and

incidents. The Commission will continue to work closely with the European Anti-

Fraud Office (OLAF) and other relevant authorities to prevent and investigate fraud

and irregularities.

No additional measures are envisaged at this stage, as the existing measures are

considered to be adequate to prevent fraud and irregularities in the amended

programmes.

EN 13 EN

3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE

3.1. Heading(s) of the multiannual financial framework and expenditure budget

line(s) affected

• Existing budget lines

In order of multiannual financial framework headings and budget lines.

Heading of

multiannual

financial

framework

Budget line Type of

expenditure Contribution

Number

Diff./Non-

diff. 13

from

EFTA

countries 14

from

candidate

countries

and

potential

candidates 15

From

other

third

countries

other assigned

revenue

1 01.020301 European Innovation Council

(Horizon Europe) Diff Yes Yes Yes Yes

5 13.04.01.00 – Military mobility Diff NO YES NO NO

5 13.01.03.01 – Support expenditure for

military mobility Non-diff. NO YES NO NO

5

13.01.03.74 – European Climate,

Infrastructure and Environment Executive

Agency – Contribution from Connecting

Europe Facility (Transport) for military

mobility

Non-diff. NO YES NO NO

13 Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations. 14 EFTA: European Free Trade Association. 15 Candidate countries and, where applicable, potential candidates from the Western Balkans.

EN 1 EN

3.2. Estimated financial impact of the proposal on appropriations

3.2.1. Summary of estimated impact on operational appropriations

–  The proposal/initiative does not require the use of operational appropriations

–  The proposal/initiative requires the use of operational appropriations, as explained below

3.2.1.1. Appropriations from voted budget

EUR million (to three decimal places)

Heading of multiannual financial framework Number 5 Security and Defence

Horizon Europe 2023 2024 2025 2026 2027 TOTAL

Estimated operational appropriations stemming from repayments from the European Innovation Council Pilot under Horizon 2020*

01.020301 European Innovation Council Commitments (1a) p.m. p.m. p.m. p.m.

Appropriations of an administrative nature financed from the

envelope of specific programmes 16

p.m. p.m. p.m.

Total appropriations for Horizon Europe

01.020301 European Innovation Council Commitments (1a) p.m. p.m. p.m. p.m.

Payments (2a) p.m. p.m. p.m.

16 Technical and/or administrative assistance and expenditure are not detailed but included in the overall amounts indicated under operational lines. They should roughly correspond to the same

percentages compared to administrative lines as the one occurred in the 2021-2024 period.

EN 2 EN

DG: MOVE Year Year Year Year TOTAL MFF

2021-2027 2025 2026 2027 Post 2027

Operational appropriations

Budget line – Military mobility Commitments (1a) P.M. P.M. P.M. P.M.

Payments (2a) P.M. P.M. P.M. P.M. P.M.

Budget line Commitments (1b) 0.000

Payments (2b) 0.000

Appropriations of an administrative nature financed from the envelope of specific programmes17

Budget line 13.01.03.01 – Support

expenditure for military mobility (3) P.M.* P.M. P.M. P.M.

Budget line 13.01.03.74 – European Climate,

Infrastructure and Environment Executive

Agency – Contribution from Connecting

Europe Facility (Transport) for military

mobility

P.M.** P.M. P.M. P.M.

TOTAL appropriations

for DG MOVE

Commitments =1a+1b+3 P.M. P.M. P.M. P.M. P.M.

Payments =2a+2b+3 P.M. P.M. P.M. P.M. P.M.

Year Year Year Year TOTAL MFF

2021-2027 2025 2026 2027 Post-2027

TOTAL operational appropriations

Commitments (4) P.M. P.M. P.M. 0.000 P.M.

Payments (5) P.M. P.M. P.M. P.M. P.M.

17 Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research.

EN 3 EN

TOTAL appropriations of an administrative nature financed from

the envelope for specific programmes (6)

P.M. P.M. P.M.

0.000

P.M.

TOTAL appropriations under HEADING

5 Commitments =4+6

P.M. P.M. P.M. P.M. P.M.

of the multiannual financial framework Payments =5+6 P.M. P.M. P.M. P.M.

P.M.

Year Year Year Year TOTAL MFF

2021-2027 2025 2026 2027 Post-2027

• TOTAL operational appropriations (all

operational headings)

Commitments (4) P.M. P.M. P.M. 0.000 P.M.

Payments (5) P.M. P.M. P.M. P.M. P.M.

• TOTAL appropriations of an administrative nature financed from

the envelope for specific programmes (all operational headings) (6) P.M. P.M. P.M. 0.000 P.M.

TOTAL appropriations Under Heading

1 to 6 Commitments =4+6 P.M. P.M. P.M. P.M. P.M.

of the multiannual financial framework

(Reference amount) Payments =5+6 P.M. P.M. P.M. P.M. P.M.

Heading of multiannual financial framework 7 ‘Administrative expenditure’18

18 The necessary appropriations should be determined using the annual average cost figures available on the appropriate BUDGpedia webpage.

EN 4 EN

DG: MOVE Year Year Year Year TOTAL

MFF 2021-

2027 2025 2026 2027 POST

2027

 Human resources 0 0 0 0 0

 Other administrative expenditure P.M. P.M. P.M. P.M. P.M.

TOTAL DG MOVE Appropriations P.M. P.M P.M P.M P.M

EUR million (to three decimal places)

Year Year Year Year TOTAL MFF

2021-2027 2025 2026 2027 POST-2027

TOTAL appropriations under HEADINGS 1 to 7 Commitments P.M P.M. P.M. P.M PM

of the multiannual financial framework Payments P.M P.M. P.M. P.M PM

Year Year Year Year TOTAL MFF

2021-2027 2025 2026 2027 POST-2027

TOTAL operational appropriations

Commitments (4) P.M. P.M. P.M. 0.000 P.M.

Payments (5) P.M. P.M. P.M. P.M. P.M.

TOTAL appropriations of an administrative nature financed from

the envelope for specific programmes (6) P.M. P.M. P.M. 0.000 P.M.

TOTAL appropriations under HEADING

5 Commitments =4+6 P.M. P.M. P.M. 0.000 P.M.

of the multiannual financial framework Payments =5+6 P.M. P.M. P.M. P.M. P.M,

EN 5 EN

Year Year Year Year TOTAL MFF

2021-2027 2025 2026 2027 POST-2027

• TOTAL operational appropriations (all

operational headings)

Commitments (4) P.M. P.M. P.M. 0.000 P.M.

Payments (5) P.M. P.M. P.M. P.M. P.M.

• TOTAL appropriations of an administrative nature financed from

the envelope for specific programmes (all operational headings) (6) P.M. P.M. P.M. P.M. P.M.

TOTAL appropriations under Headings 1 to

6 Commitments =4+6 P.M. P.M. P.M. 0.000 P.M.

of the multiannual financial framework (Reference

amount) Payments =5+6 P.M. P.M. P.M. P.M. P.M.

Heading of multiannual financial framework 7 ‘Administrative expenditure’19

EUR million (to three decimal places)

EUR million (to three decimal places)

Year Year Year Year TOTAL

MFF 2021-

2027 2025 2026 2027 POST-2027

TOTAL appropriations under HEADINGS 1 to

7 Commitments P.M P.M. P.M. P.M PM

of the multiannual financial framework Payments P.M P.M. P.M. P.M PM

19 The necessary appropriations should be determined using the annual average cost figures available on the appropriate BUDGpedia webpage.

EN 6 EN

3.2.3. Summary of estimated impact on administrative appropriations

–  The proposal/initiative does not require the use of appropriations of an

administrative nature

–  The proposal/initiative requires the use of appropriations of an administrative

nature, as explained below

3.2.3.1. Appropriations from voted budget

VOTED

APPROPRIATIONS

Year Year Year Year TOTAL 2021

- 2027 2025 2026 2027 POST-2027

HEADING 7

Human resources 0 0 0 0 0

Other administrative expenditure PM PM PM PM PM

Subtotal HEADING 7 PM PM PM PM PM

Outside HEADING 7

Human resources - 13.01.03.74 – European Climate, Infrastructure

and Environment Executive

Agency – Contribution from Connecting Europe Facility

(Transport) for military mobility*

PM PM PM PM PM

Other expenditure of an

administrative nature 13.01.03.01 – Support expenditure for military

mobility**

PM PM PM PM PM

Subtotal outside HEADING 7 PM PM PM PM PM

TOTAL P.M P.M. P.M. P.M. P.M.

3.2.4. Estimated requirements of human resources

–  The proposal/initiative does not require the use of human resources

–  The proposal/initiative requires the use of human resources, as explained below

3.2.5. Overview of estimated impact on digital technology-related investments

Compulsory: the best estimate of the digital technology-related investments entailed

by the proposal/initiative should be included in the table below.

Exceptionally, when required for the implementation of the proposal/initiative, the

appropriations under Heading 7 should be presented in the designated line.

The appropriations under Headings 1-6 should be reflected as “Policy IT expenditure

on operational programmes”. This expenditure refers to the operational budget to be

used to re-use/ buy/ develop IT platforms/ tools directly linked to the implementation

of the initiative and their associated investments (e.g. licences, studies, data storage

etc). The information provided in this table should be consistent with details

presented under Section 4 “Digital dimensions”.

TOTAL Digital and IT appropriations

Year Year Year Year TOTAL

MFF

2021 -

2027 2025 2026 2027 POST-

2027

HEADING 7

IT expenditure (corporate) 0.000 0.000 0.000 0.000 0.000

EN 7 EN

Subtotal HEADING 7 0.000 0.000 0.000 0.000 0.000

Outside HEADING 7

Policy IT expenditure on operational programmes*

PM PM PM PM PM

Subtotal outside HEADING 7 PM PM PM PM PM

*Corporate IT expenditure on operational programmes financed by 13.01.03.01 – Support expenditure for

military mobility

TOTAL PM PM PM PM PM

3.2.6. Compatibility with the current multiannual financial framework

The proposal/initiative:

–  can be fully financed through redeployment within the relevant heading of the

multiannual financial framework (MFF)

This initiative will be financed by existing resources, within the agreed envelopes of

the programmes concerned and the allocated HR. The proposal will reinforce the

envelop of the EIC by EUR 210 million from the unused amounts and reflows of the

EIC pilot of Horizon 2020. The reprogramming will require redeployment across

headings of the MFF as provided by the Cohesion Programme and Connecting

Europe Facility regulations and the mid-term review of the Cohesion Programme.

3.2.7. Third-party contributions

The proposal/initiative:

 does not provide for co-financing by third parties.

3.3. Estimated impact on revenue

–  The proposal/initiative has no financial impact on revenue.

–  The proposal/initiative has the following financial impact:

–  on own resources

–  on other revenue

–  please indicate, if the revenue is assigned to expenditure lines

EUR million (to three decimal places)

Budget revenue line:

Appropriations

available for the

current financial

year

Impact of the proposal/initiative 20

Year 2024 Year 2025 Year 2026 Year 2027

– For assigned revenue, specify the budget expenditure line(s) affected.

This initiative will be financed by existing resources, within the agreed envelopes of the

programmes concerned and the allocated HR. The proposal will reinforce the envelop of the

20 As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net

amounts, i.e. gross amounts after deduction of 20% for collection costs.

EN 8 EN

EIC by EUR 210 million from the unused amounts and reflows of the EIC pilot of Horizon

2020.

– 4. DIGITAL DIMENSIONS

4.1. Requirements of digital relevance

The proposed amendments do not establish any new requirements of digital relevance. The

assessment of digital relevance has already been conducted for each of the programmes

affected by the amendments, and the proposed changes do not introduce any additional

obligations or provisions related to the collection, processing, generation, exchange, or

sharing of data, the automation or digitalisation of stakeholders' processes, the use of new

or existing digital solutions, or digital public services. Therefore, no additional

requirements of digital relevance are identified in this proposal.

    Resolutsiooni liik: Riigikantselei resolutsioon Viide: Rahandusministeerium /  / ; Riigikantselei /  / 2-5/25-00833

Resolutsiooni teema: Kaitseinvesteeringute soodustamine EL programmides ReArm Euroopa Plaani rakendamiseks

Adressaat: Rahandusministeerium Ülesanne: Tulenevalt Riigikogu kodu- ja töökorra seaduse § 152` lg 1 p 2 ning Vabariigi Valitsuse reglemendi § 3 lg 4 palun valmistada ette Vabariigi Valitsuse seisukoha ja otsuse eelnõu järgneva algatuse kohta, kaasates seejuures olulisi huvigruppe ja osapooli:

- Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153, (EU) 2023 /1525 and 2024/795, as regards incentivising defence-related investments in the EU budget to implement the ReArm Europe Plan, COM(2025) 188.

EISi toimiku nr: 25-0205

Tähtaeg: 26.05.2025

Adressaat: Haridus- ja Teadusministeerium, Justiits- ja Digiministeerium, Kaitseministeerium, Kliimaministeerium, Majandus- ja Kommunikatsiooniministeerium Ülesanne: Palun esitada oma sisend Rahandusministeeriumile seisukohtade kujundamiseks antud eelnõu kohta (eelnõude infosüsteemi (EIS) kaudu).

Tähtaeg: 16.05.2025

Lisainfo: Eelnõu on kavas arutada valitsuse 05.06.2025 istungil ja Vabariigi Valitsuse reglemendi § 6 lg 6 kohaselt sellele eelneval nädalal (28.05.2025) EL koordinatsioonikogus. Esialgsed materjalid EL koordinatsioonikoguks palume esitada hiljemalt 26.05.2025.

Kinnitaja: Nele Grünberg, Euroopa Liidu asjade direktori asetäitja Kinnitamise kuupäev: 02.05.2025 Resolutsiooni koostaja: Elen Nurme [email protected], 693 5201  

.