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The EU’s €90 million preparatory action on defence research (PADR) was only partially useful in priming the EU for significantly ramping up its defence spending and paving the way for the €8 billion European Defence Fund (EDF), according to a report by the European Court of Auditors.
Projects funded under the PADR faced time constraints and did not deliver results in time to prepare the launch of the EDF.
Although the European Commission and the European Defence Agency (EDA) gained some useful lessons on how to manage cooperative defence research projects, the EU still lacks a long-term strategy for the EDF.
The Commission launched the PADR in 2017 as a three-year programme to help improve competitiveness and innovation in the European defence industry. The EU’s executive implemented the programme in cooperation with the EDA. This was the first time the EU budget was used to support research and development (R&D) in the defence industry. The EU’s auditors assessed whether the PADR properly prepared the EU for a defence spending hike through the EDF, which was launched in 2021 and marked a step-change in the level of EU funding for defence R&D.
”Although the PADR provided the EU with an opportunity to test different options in funding defence research, delays and the paucity of results limited the lessons learnt for its bigger successor – the EDF,” said Viorel Ştefan, the ECA member responsible for the report. “The Commission should work with member states to develop a long-term strategy, which is essential for the future of the EDF as the EU’s main defence fund.”
PADR projects progressed slowly, experienced delays and consequently overlapped with the EDF. In May 2021, when the first EDF calls for proposals were launched, most PADR projects were still ongoing. More than half of those projects had either just started or were not yet underway, and only two had been completed. Delays occurred frequently owing to the time needed to finalise grant agreements, in part because of security requirements that were sometimes considered excessive, and because of COVID-19 restrictions. PADR project coordinators and participants were concentrated in a handful of member states that already had large defence industries, such as France, Germany, Italy, Spain and Sweden. Combinations of the same companies took part in several projects, and the vast majority of consortia simply continued their earlier cooperation.
PADR projects did not start with a plan for the subsequent development of research results, or for organising the transition to production and procurement. Against this backdrop, the auditors warn that the Commission has not yet properly addressed strategic issues that might prevent EDF projects from achieving their intended impact. The auditors call for a long-term defence strategy for the EDF, which should be regularly updated to reflect changing security threats. It should aim to increase the presence of technology developed by the EDF in the EU defence sector, ensure that the capabilities developed address the needs of EU countries’ armed forces, and strengthen the bloc’s defence technological and industrial base. The strategy should also indicate whether the EDF should focus on many small projects or a small number of larger ones.
