Europaudvalget 2025
KOM (2025) 0188
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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)
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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.
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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 Seals
1
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
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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.
•
N/A
•
N/A
•
N/A
Collection and use of expertise
Stakeholder consultations
RESULTS
OF
EX-POST
EVALUATIONS,
CONSULTATIONS AND IMPACT ASSESSMENTS
Ex-post evaluations/fitness checks of existing legislation
STAKEHOLDER
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•
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.
•
N/A
•
N/A
4.
BUDGETARY IMPLICATIONS
Fundamental rights
Regulatory fitness and simplification
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.
•
N/A
Explanatory documents (for directives)
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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 Committee
2
,
Having regard to the opinion of the Committee of the Regions
3
,
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.
The Strategic Technologies for Europe Platform (STEP) established by Regulation
(EU) 2024/795 of the European Parliament and of the Council
4
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.
OJ C , , p. .
OJ C , , p. .
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)
(2)
2
3
4
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(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 6
th
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.
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.
Horizon Europe established by Regulation (EU) 2021/695 of the European Parliament
and of the Council
5
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.
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
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)
(4)
(5)
(6)
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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 Council
6
, 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. .
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.
The Digital Europe Programme (DEP) established by Regulation (EU) 2021/694 of
the European Parliament and of the Council
7
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.
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.
(8)
(9)
(10)
6
7
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).
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)
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(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.
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.
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.
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.
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
(12)
(13)
(14)
(15)
8
9
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)
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)
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Council
10
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)
(17)
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.
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.
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,
(18)
HAVE ADOPTED THIS REGULATION:
Article 1
Regulation (EU) 2021/694 [Digital Europe Programme] is amended as follows:
(1)
(2)
in Article 3 (1), second subparagraph, the following point is added:
‘(c) support dual-use projects, services, competences and applications.’;
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)
10
in Article 12, paragraph 5 is replaced by the following:
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)
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‘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:
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‘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.
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.’;
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.
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.
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:
2.
(2)
2.
4.
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(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)
(ii)
co-financing rates may be increased to a maximum of 100%;
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.
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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
The President
For the Council
The President
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LEGISLATIVE FINANCIAL AND DIGITAL STATEMENT
1.
1.1.
1.2.
1.3.
1.3.1.
1.3.2.
1.3.3.
1.3.4.
1.4.
1.5.
1.5.1.
1.5.2.
FRAMEWORK OF THE PROPOSAL/INITIATIVE ................................................. 3
Title of the proposal/initiative ...................................................................................... 3
Policy area(s) concerned .............................................................................................. 3
Objective(s) .................................................................................................................. 3
General objective(s) ..................................................................................................... 3
Specific objective(s) ..................................................................................................... 3
Expected result(s) and impact ...................................................................................... 3
Indicators of performance ............................................................................................ 3
The proposal/initiative relates to: ................................................................................. 4
Grounds for the proposal/initiative .............................................................................. 4
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
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
Lessons learned from similar experiences in the past .................................................. 4
Compatibility with the multiannual financial framework and possible synergies with
other appropriate instruments ....................................................................................... 5
Assessment of the different available financing options, including scope for
redeployment ................................................................................................................ 5
Duration of the proposal/initiative and of its financial impact .................................... 6
Method(s) of budget implementation planned ............................................................. 6
MANAGEMENT MEASURES................................................................................... 8
Monitoring and reporting rules .................................................................................... 8
Management and control system(s) ............................................................................. 8
Justification of the budget implementation method(s), the funding implementation
mechanism(s), the payment modalities and the control strategy proposed .................. 8
Information concerning the risks identified and the internal control system(s) set up
to mitigate them............................................................................................................ 8
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
Measures to prevent fraud and irregularities ................................................................ 9
ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE ............ 10
1.5.3.
1.5.4.
1.5.5.
1.6.
1.7.
2.
2.1.
2.2.
2.2.1.
2.2.2.
2.2.3.
2.3.
3.
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3.1.
3.2.
3.2.1.
Heading(s) of the multiannual financial framework and expenditure budget line(s)
affected ....................................................................................................................... 10
Estimated financial impact of the proposal on appropriations ................................... 12
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.
3.2.3.
Estimated output funded from operational appropriations......................................... 22
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.
3.2.6.
3.2.7.
3.3.
4.
4.1.
4.2.
4.3.
4.4.
4.5.
Overview of estimated impact on digital technology-related investments ................ 28
Compatibility with the current multiannual financial framework.............................. 28
Third-party contributions ........................................................................................... 28
Estimated impact on revenue ..................................................................................... 29
DIGITAL DIMENSIONS .......................................................................................... 29
Requirements of digital relevance .............................................................................. 30
Data ............................................................................................................................ 30
Digital solutions ......................................................................................................... 31
Interoperability assessment ........................................................................................ 31
Measures to support digital implementation .............................................................. 32
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1.
1.1.
FRAMEWORK OF THE PROPOSAL/INITIATIVE
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.
1.3.1.
Objective(s)
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
•
•
•
•
•
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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.
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Specific Objective
Indicator
Enhanced
European
defence
technological and industrial base Number of defence projects supported by
(EDTIB)
and
supply
chain STEP
resilience
Number
of
transport
infrastructure
Improved military mobility
components adapted to dual-use requirements
Time reduction in evaluation and award of
Support to defence innovation
EDF projects related to disruptive
technologies for defence
Support to SMEs and start-ups Number of defence and dual use SMEs and
developing dual use and defence start-ups receiving funding through the
technologies
European
Innovation
Council
(EIC)
Accelerator and EIC STEP Scale Up
Increased synergies with other Number of projects funded through DEP that
sectors, such as digital
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 action
11
the extension of an existing action
a merger or redirection of one or more actions towards another/a new action
1.5.
1.5.1.
Grounds for the proposal/initiative
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.
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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.
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.
–
Reasons for action at EU level (ex-ante):
–
–
–
–
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
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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.
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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.
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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
–
–
1.7.
Implementation with a start-up period from YYYY to YYYY
followed by full-scale operation.
Method(s) of budget implementation planned
12
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.
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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.
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2.
2.1.
MANAGEMENT MEASURES
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.
2.2.1.
Management and control system(s)
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.
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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.
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3.
3.1.
•
ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE
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.
Budget line
Type of
expenditure
Contribution
from
candidate
countries
and
potential
candidates
15
Heading of
multiannual
financial
framework
Number
Diff./Non-
13
diff.
from
EFTA
countries
14
From
other
third
countries
other assigned
revenue
1
5
5
01.020301 European Innovation Council
(Horizon Europe)
13.04.01.00 – Military mobility
13.01.03.01 – Support expenditure for
military mobility
13.01.03.74
–
European
Climate,
Infrastructure and Environment Executive
Agency – Contribution from Connecting
Europe Facility (Transport) for military
mobility
Diff
Diff
Non-diff.
Yes
NO
NO
Yes
YES
YES
Yes
NO
NO
Yes
NO
NO
5
Non-diff.
NO
YES
NO
NO
13
14
15
Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations.
EFTA: European Free Trade Association.
Candidate countries and, where applicable, potential candidates from the Western Balkans.
EN
13
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3.2.
3.2.1.
–
–
Estimated financial impact of the proposal on appropriations
Summary of estimated impact on operational appropriations
�½
The proposal/initiative does not require the use of operational appropriations
The proposal/initiative requires the use of operational appropriations, as explained below
EUR million (to three decimal places)
3.2.1.1. Appropriations from voted budget
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.
p.m.
p.m.
p.m.
Appropriations of an administrative nature financed from the
envelope of specific programmes
16
Total appropriations for Horizon Europe
01.020301 European Innovation Council
Commitments
Payments
(1a)
(2a)
p.m.
p.m.
p.m.
p.m.
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
1
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DG: MOVE
Operational appropriations
Year
2025
Commitments
Payments
Commitments
Payments
(1a)
(2a)
(1b)
(2b)
Year
2026
P.M.
P.M.
Year
2027
P.M.
P.M.
Year
Post 2027
TOTAL MFF
2021-2027
Budget line – Military mobility
Budget line
P.M.
P.M.
P.M.
P.M.
P.M.
0.000
0.000
Appropriations of an administrative nature financed from the envelope of specific programmes
17
Budget line 13.01.03.01 – Support
(3)
P.M.*
expenditure for military mobility
Budget line 13.01.03.74 – European Climate,
Infrastructure and Environment Executive
P.M.**
Agency – Contribution from Connecting
Europe Facility (Transport) for military
mobility
=1a+1b+3
Commitments
P.M.
TOTAL appropriations
for DG MOVE
=2a+2b+3
Payments
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
Year
2025
Commitments
(4)
(5)
Year
2026
P.M.
P.M.
P.M.
P.M.
Year
2027
P.M.
P.M.
Year
Post-2027
0.000
P.M.
TOTAL MFF
2021-2027
P.M.
P.M.
TOTAL
operational
appropriations
Payments
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
2
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P.M.
P.M.
P.M.
0.000
P.M.
TOTAL appropriations of an administrative nature financed from
the envelope for specific programmes
(6)
TOTAL appropriations under HEADING
Commitments
5
of the multiannual financial framework
Payments
P.M.
=4+6
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
=5+6
P.M.
Year
Year
2026
P.M.
P.M.
Year
2027
P.M.
P.M.
Year
Post-2027
0.000
P.M.
•
TOTAL operational
operational headings)
appropriations
(all
Commitments
Payments
(4)
(5)
2025
P.M.
P.M.
TOTAL MFF
2021-2027
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
1 to 6
Heading
Commitments
Payments
=4+6
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
of the multiannual financial framework
(Reference amount)
=5+6
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
.
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Year
Year
2026
0
0
P.M.
P.M
Year
2027
0
P.M.
P.M
DG: MOVE
Human resources
Other administrative expenditure
TOTAL DG
MOVE
2025
Year
POST
2027
0
P.M.
P.M
TOTAL
MFF 2021-
2027
0
P.M.
P.M
P.M.
Appropriations
P.M.
EUR million (to three decimal places)
Year
2025
Year
2026
Year
2027
Year
POST-2027
P.M
P.M
TOTAL MFF
2021-2027
TOTAL appropriations under HEADINGS 1 to 7
of the multiannual financial framework
Commitments
Payments
P.M
P.M
P.M.
P.M.
P.M.
P.M.
PM
PM
Year
2025
Commitments
(4)
(5)
Year
2026
P.M.
P.M.
P.M.
P.M.
Year
2027
P.M.
P.M.
Year
POST-2027
0.000
P.M.
TOTAL MFF
2021-2027
P.M.
P.M.
TOTAL
operational
appropriations
Payments
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
Commitments
5
of the multiannual financial framework
Payments
=4+6
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
0.000
P.M.
P.M.
P.M,
=5+6
EN
4
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Year
2025
Year
2026
P.M.
P.M.
P.M.
Year
2027
P.M.
P.M.
P.M.
Year
POST-2027
0.000
P.M.
P.M.
TOTAL MFF
2021-2027
P.M.
P.M.
P.M.
•
TOTAL operational
operational headings)
appropriations
(all
Commitments
Payments
(4)
(5)
P.M.
P.M.
P.M.
•
TOTAL appropriations of an administrative nature financed from
the envelope for specific programmes (all operational headings)
(6)
TOTAL appropriations under Headings 1 to
6
of the multiannual financial framework (Reference
amount)
Commitments
Payments
=4+6
P.M.
P.M.
P.M.
P.M.
P.M.
P.M.
0.000
P.M.
P.M.
P.M.
=5+6
Heading of multiannual financial framework
7
‘Administrative expenditure’
19
EUR million (to three decimal places)
EUR million (to three decimal places)
Year
2025
Year
2026
Year
2027
Year
POST-2027
TOTAL
MFF 2021-
2027
TOTAL appropriations under HEADINGS 1 to
7
of the multiannual financial framework
Commitments
Payments
P.M
P.M
P.M.
P.M.
P.M.
P.M.
P.M
P.M
PM
PM
19
The necessary appropriations should be determined using the annual average cost figures available on the appropriate BUDGpedia webpage.
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5
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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
HEADING 7
Human resources
Other administrative expenditure
Subtotal HEADING 7
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*
Other expenditure of an
administrative nature 13.01.03.01
– Support expenditure for military
mobility**
Subtotal outside HEADING 7
0
PM
PM
0
PM
PM
0
PM
PM
0
PM
PM
0
PM
PM
Year
2025
Year
2026
Year
2027
Year
POST-2027
TOTAL 2021
- 2027
PM
PM
PM
PM
PM
PM
PM
PM
PM
PM
PM
PM
PM
PM
PM
TOTAL
P.M
P.M.
P.M.
P.M.
P.M.
3.2.4.
–
–
3.2.5.
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
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”.
Year
Year
2026
Year
2027
Year
POST-
2027
TOTAL
MFF
2021 -
2027
TOTAL Digital and IT appropriations
2025
HEADING 7
IT expenditure (corporate)
0.000
0.000
0.000
0.000
0.000
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Subtotal HEADING 7
Outside HEADING 7
0.000
0.000
0.000
0.000
0.000
Policy IT expenditure on operational
programmes*
Subtotal outside HEADING 7
PM
PM
PM
PM
PM
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.
3.3.
–
–
Third-party contributions
The proposal/initiative:
does
not
provide
Estimated impact on revenue
–
–
–
for
co-financing
by
third
parties.
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)
Appropriations
available for the
current financial
year
Impact of the proposal/initiative
Year
2024
Year
2025
20
Budget revenue line:
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.
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EIC by EUR 210 million from the unused amounts and reflows of the EIC pilot of Horizon
2020.
–
4.1.
4.
DIGITAL DIMENSIONS
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.
EN
8
EN