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Good morning and welcome to today’s issue of Firepower,
Russia and Belarus begin their multi-day Zapad (West) military exercise at the EU & NATO border today. Just three years ago, Moscow similarly put troops and equipment in Belarus for an “exercise”. They ended up invading Ukraine — a memory still fresh in many a diplomat’s mind.
The Baltic States and Poland have exercises planned too. Everyone is on alert. Especially with the latest incident of Russian drones crossing onto NATO territory earlier this week, concerns about the US defunding Europe’s security, and European militaries looking to beef up their defences.
On that front, we’ve got insiders’ updates for you on the negotiations at the EU level for the schemes to massively ramp up the bloc’s arms production, and on procurement.
EDIP technical talks today
Negotiations on the European Defence industry programme between Council and Parliament are continuing today. On the agenda: the instrument to support Ukraine and the “programme” — meaning what the €1.5 billion envelope can be used for.
Mapping and monitoring of the supply quagmire is overcome, Firepower has learned, though we have yet to hear which position prevailed.
Co-legislators still have two weeks to go through half of the text, before the first political trilogue on 22 September, as previously reported.
But of what remains, what really matters is who can access the funding. Denmark is under a lot of pressure from its fellow countries to stand by the Council’s eligibility criteria – a product of tough negotiations.
During the high stakes dialogue, the Danish Presidency, representing the views of the 27 EU countries, also hopes to clear the way on two other points:
- In their compromise proposal, EU countries want defence projects that started from 5 March 2024 onwards – when the Commission first unveiled its EDIP proposal – to be retroactively eligible for EDIP funding. This also applies to actions in support of Ukraine, which the Parliament’s proposal did not mention.
- And they want to ensure EDIP’s legal basis is sufficiently detailed so that the industrial programme can be implemented ASAP.
The Commission is nevertheless planning a very first meeting with EU countries on Tuesday next week to discuss the future work programme of the EDIP, Firepower has learned. The work programme defines the kind of activities the €1.5 billion will subsidise.
The early programme prep could be helpful in pre-drafting a list of funding targets to have essentially ready for publication on the day EDIP goes live.
State of the Union recap
Commission President Ursula von der Leyen announced the EU will partner with national capitals to erect a “wall of drones” — right after Poland shot down “hostile objects” in its airspace — and new defence funding in her annual address to MEPs in Strasbourg on Wednesday.
The list includes:
- A new “Eastern Flank Watch”. This would mean an EU-made “drone wall” to monitor Europe’s airspace from the Baltic Sea down to the Black Sea. The initiative resembles a watered-down version of an EU-wide air defence shield Poland and Greece have called for in recent years.
- A “drone alliance with Ukraine”, but the details of this collaboration remain unclear
- Using “cash balances” linked to frozen Russian assets to pay for Ukraine’s “reparation loan”. “The details are being fleshed out,” the Commission’s spokesperson told the press yesterday.
- A bonus (“une prime” von der Leyen said in French) to EU countries supporting Ukraine or buying Ukrainian defence equipment. The instrument could resemble the €17 billion European Peace Facility (EPF), an off-budget fund that has been used to reimburse donations of defence equipment to Ukraine, said Juan Mejino-López, research analyst at Bruegel. The Commission could hardly finance this “bonus” through the EU budget, because of European Treaties’ constraints on financing weapons, and “existing difficulties within the budget allocation and size”, he added.
The SAFE wannabe friends list expands
EU ambassadors are meeting today to discuss whether they can use the EU SAFE loans programme to buy arms in the UK and Canadian (provided they pitch in too). France wants their participation capped at 50% of the value of the products being purchases, so as to put European defence manufacturers first. The rest are against.
As the 27 were discussing London and Ottawa’s inclusion, Ankara and Seoul also applied. The Commission will see if they meet the requirements before proposing to the Council to reopen negotiations (or not). Understand: Turkey might not make it so far.
When it comes to how the EU countries want to use the EU loans, it’s time to get to the drawing board. The envoys of national capitals have been invited to first meetings with the European Commission this month, where they can layout ideas for their national plans: what they’ll buy and for how much. The EU executive has already sent around a template.
Turkey and South Korea apply to join EU arms scheme
The European Commission has received requests from Turkey and South Korea for their industries to…
2 minutes
Cohesion funds for arms factories
MEPs voted overwhelmingly in favour of using cohesion policy funds to boost Europe’s defence industry in this week’s plenary session. Ambassadors gave their initial green light last July to open the EU’s €392 billion envelope to defence-related projects.
The Council will now have to vote on a final adoption.
Baltic lawmakers urge Congress to maintain US security aid
Lawmakers from Latvia, Lithuania and Estonia have urged the US Congress to preserve funding for…
2 minutes
Starbucks returns to NATO
The who’s in and who’s out of NATO HQ coffee shops has a new chapter. We all thought the Seattle coffee shop turned global brand had disappeared from headquarters, but it seems it will come back soon. In a musical chairs of the cafés, where Italy’s Lavazza took over Starbucks prime spot in the public square of NATO, Starbucks will take over the space formerly occupied by Exki.
The Belgian café chain which organised its marketing around serving fresh and healthy meals to busy staffers is currently going through a rough patch. They have not responded to a request for comment from Firepower.
NATO members beefing up security as alliance investigates Russia drone incursion
NATO members are looking to scale up defences after allied planes shot down an unprecedented…
6 minutes
Situational Awareness
FRIDAY 12/09
- EU: EDIP technical trilogue
- Council: Coreper II
- Commission: Defence commissioner Kubilius speaks at the event ”General Assembly Defence | Space | Cybersecurity”, visit the ESA Centre for Earth Observation, and meet with the Italian ministers for defence and enterprise.
- Russia: Start of Zapad military exercises in conjunction with Belarus (until 16/09)
- Event: DSEI UK 2025, in London
MONDAY 15/09
- Council: Working party on Defense Industry
- Council: Politico-Military Group
- Commission: Migration Commissioner Brunner visiting the Vaalimaa border station in Finland.
