Economy

EU strengthens defence supply chains and backs Ukraine with new industrial programme

Tuesday 09 December 2025 - 13:50

By: Dakir Madiha

EU strengthens defence supply chains and backs Ukraine with new industrial programme

The European Union has launched a €1.5 billion defence industry programme aimed at strengthening Europe’s military manufacturing capacity, securing supply chains, and integrating Ukraine more closely into the continent’s defence network. The European Defence Industry Programme (EDIP) marks the bloc’s most ambitious step toward self-reliance in arms production and reduced dependency on non-European suppliers.

The initiative, recently approved by the Council of the European Union, establishes strict sourcing requirements that limit parts and components from non-associated countries—such as the United States to no more than 35 percent of total component costs. It also bans procurement from nations whose security interests conflict with those of the EU. The regulation introduces a coordinated “European security-of-supply framework” to prevent future disruptions in the flow of critical materials and munitions, an issue that has slowed ammunition deliveries to Ukraine since 2022.

EU aims for industrial resilience

European Commission President Ursula von der Leyen described the programme as a commitment to “investing in Europe’s readiness and security.” By prioritizing European manufacturing, EDIP seeks to create cross-border “defence projects of common interest” that will unify procurement efforts across at least three member states. It also opens access for small and medium-sized enterprises, mid-cap companies, and start-ups to participate in defence production through specialized funding and support schemes.

The regulation is scheduled to be signed on December 17 and will enter into force the day after publication in the Official Journal of the European Union, allowing rapid disbursement of initial funding.

Ukraine as an industrial ally

A central element of EDIP is the €300 million Ukraine Support Instrument, designed to modernize Kyiv’s defence manufacturing sector and align it with EU technical and industrial standards. This provision allows Ukrainian companies to compete for funding and contracts under the same conditions as EU members, reflecting Brussels’ commitment to treat Ukraine as a long-term partner rather than merely an aid recipient.

Ukraine’s expertise in drone technology, electronic warfare, and rapid battlefield innovation has already drawn attention from European partners seeking modern, adaptable systems. Integrating Ukraine into the EU’s defence network could help both sides accelerate weapons production and technology transfer.

Towards a united European defence economy

EDIP builds upon previous short-term initiatives such as ASAP for ammunition ramp-up and EDIRPA for joint procurement which are set to expire in 2025. The new programme extends these frameworks until 2027, providing a longer-term roadmap for defence industrial cooperation within Europe. Member states may also contribute additional resources voluntarily, enhancing the programme’s overall capacity.

By reinforcing its defence base and deepening coordination with Ukraine, the EU hopes to ensure that its defence industry remains capable, resilient, and strategically autonomous in the face of global uncertainty.