EU Budget Boost for Defence: Commission Mobilises €910M and Proposes New Regulation
In late April 2025, the European Commission published two major announcements concerning the future of defence-related innovation in the EU. The Commission has proposed amendments to EU funding programmes to support defence-related technologies, including dual-use applications such as AI and cybersecurity, and has announced €910 million in the European Defence Fund (EDF), focused on key capability gaps like drone defence and force mobility.
On April 22, the Commission proposed targeted amendments to several EU programmes to allow for faster, more flexible investments in Europe’s Defence Technological and Industrial Base (EDTIB). This includes broadening the Strategic Technologies for Europe Platform (STEP) to cover defence-related technologies, especially those identified in the White Paper for European Defence – Readiness 2030.
Under the proposal, projects in areas such as artificial intelligence, cybersecurity, cloud infrastructure, and 5G could become eligible for funding through Horizon Europe, the Digital Europe Programme, and regional instruments like the European Regional Development Fund (ERDF). The proposal introduces mechanisms like the Strategic Technologies for Europe Platform (STEP) Seal, a label awarded to eligible projects, to signal strategic importance and attract additional financing.
Notably, the Digital Europe Programme (DEP) is expected to expand to include dual-use applications and support efforts such as the creation of AI Gigafactories—centres for scaling up production of advanced AI technologies with both civilian and defence use cases. These developments, if adopted, would make it easier for public and private actors to engage with dual-use digital innovation under the EU budget.
This momentum continued with the announcement on April 30, where the Commission confirmed the results of the 2024 European Defence Fund (EDF) call, awarding €910 million across 62 projects. This round places a strong emphasis on industrial cooperation, disruptive technology, and capability development, including in areas related to force mobility, drone defence, and AI-enabled aerial systems. Among the funded projects are initiatives developing next-generation stealth materials, autonomous European minesweeping systems, AI-driven aerial systems involving Ukrainian partners, and a rotorcraft development consortium with over 45 participants. Altogether, 15 projects contribute to the STEP initiative, underlining growing coordination across EU instruments.
These developments are part of the EU’s broader efforts to strengthen its defence readiness through coordinated investment, regulatory adaptation, and integration of innovation ecosystems. Further legislative steps are expected in June 2025, when the Commission will present the Omnibus Defence Simplification Package to streamline defence-related funding and cooperation across Member States.