The European Parliament supported the law on joint procurement in the field of defense, which provides bonuses for projects to support Moldova and Ukraine.
In particular, on Tuesday MEPs supported strengthening the European defense industry through the Common Procurement Act (EDIRPA). The Regulation establishes a short-term instrument to strengthen the European defense industry through common procurement until 31 December 2025. This will help Member States meet their most urgent and critical defense needs, which have been exacerbated by the supply of defense products to Ukraine on a voluntary and cooperative basis. A budget of 300 million euros will finance this instrument. Joint procurement will have to involve at least 3 member states and be open to participation by members of the European Free Trade Association that are members of the European Economic Area (associated countries). Contractors and subcontractors must be registered in the EU or an associated country and are not subject to control by an unrelated third country or organization. The value of components originating from the EU or associated countries must not be less than 65% of the estimated value of the final product. The law stipulates bonuses for projects to support Ukraine, Moldova and small and medium-sized businesses. In particular, the EU's financial contribution to each action will be limited to 15% of the estimated value of the overall procurement contract for the consortium. This ceiling could be raised to 20% if Ukraine or Moldova are recipients of additional defense volumes or if at least 15% of the estimated value of the overall procurement contract is allocated to SMEs or mid-cap companies (with an average market capitalization known as mid-cap companies) as contractors or subcontractors. “Today’s vote marks a historic moment for EU defense as it creates the EU’s first instrument for joint procurement among member states. This will help them replenish their reserves, increase the interoperability of our military, strengthen our industry, and promote our unwavering support for Ukraine. However, faced with a historic crisis, EDIRPA can only become the starting point for a much more ambitious overall defense program,” Foreign Affairs Committee co-rapporteur Michael Gahler (Germany) said after the vote. “We have reached a reasonable compromise that will make EDIRPA complementary to another piece of legislation important to the defense sector: the Ammunition Production Support Act. We managed to defend the priorities of the parliament, including on projects that will support Ukraine or Moldova. Most importantly, by intensifying joint procurement of military equipment, EDIRPA will help strengthen the defense capabilities of member states,” said Zdzislaw Krasnodebski (Poland), co-rapporteur of the Committee on Industry, Research and Energy. The law was passed with 530 votes in favor. 66 were against, with 32 abstaining. The law now requires formal approval by the EU Council to enter into force.//12.09.2023 – InfoMarket.
