Changes from report parliamentary committee draft to plenary report

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

Changedon ‘Tacklingtackling barriers to the single market for defence’defence

(2025/2143(INI))

The European Parliament,

– having regard to the Treaty on the Functioning of the European Union (TFEU),

Changed– having regard to the Versailles declarationDeclaration adopted at the informal meeting of the headsHeads of stateState or governmentGovernment on 11 March 2022,

▸7 unchanged paragraphs

– having regard to the Strategic Compass for Security and Defence – For a European Union that protects its citizens, values and interests and contributes to international peace and security, approved by the Council on 21 March 2022 and endorsed by the European Council on 25 March 2022,

– having regard to Council Decision (CFSP) 2017/2315 of 11 December 2017 establishing permanent structured cooperation (PESCO) and determining the list of participating Member States1,

– having regard to Directive 2009/43/EC of the European Parliament and of the Council of 6 May 2009 simplifying terms and conditions of transfers of defence-related products within the Community2,

– having regard to Directive 2009/81/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of procedures for the award of certain works contracts, supply contracts and service contracts by contracting authorities or entities in the fields of defence and security, and amending Directives 2004/17/EC and 2004/18/EC3,

– having regard to 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) 2018/10924,

– having regard to Regulation (EU) 2023/1525 of the European Parliament and of the Council of 20 July 2023 on supporting ammunition production (ASAP)5,

– having regard to Regulation (EU) 2023/2418 of the European Parliament and of the Council of 18 October 2023 on establishing an instrument for the reinforcement of the European defence industry through common procurement (EDIRPA)6,

Changed– having regard to its report of 30 April 2025 on the proposal forRegulation a(EU) regulation2025/2643 of the European Parliament and of the Council of 16 December 2025 establishing the European Defence Industry Programme and a framework of measures to ensure the timely availability and supply of defence products (‘EDIP’)’(‘EDIP (COM(2024)0150),Regulation’)7,

Changed– having regard to Council Regulation (EU) 2025/11062025/2653 of 27the MayEuropean 2025Parliament establishingand of the SecurityCouncil Actionof for19 EuropeDecember (SAFE)2025 throughamending theRegulations Reinforcement(EU) of2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153 and (EU) 2024/795, as regards incentivising defence-related investment in the EuropeanEU Defencebudget Industryto Instrument7,implement the ReArm Europe Plan8,

Changed– having regard to the Commission proposal of 22 April 2025 for a regulation of the European Parliament and of the Council amending Regulations (EU) 2021/694, (EU) 2021/695,Regulation (EU) 2021/697,2025/1106 (EU)of 2021/1153,27 (EU)May 2023/15252025 andestablishing 2024/795,the asSecurity regardsAction incentivisingfor defence-relatedEurope investments(SAFE) inthrough the EU budget toReinforcement implementof the ReArmEuropean EuropeDefence PlanIndustry (COM(2025)0188),Instrument9,

Changed– having regard to the Commission proposal of 17 June 2025 for a regulation of the European Parliament and of the Council on the acceleration of permit-granting for defence readiness projects (COM(2025)0821), to the Commission proposal of 17 June 2025 for a regulation of the European Parliament and of the Council amending Regulations (EC) No 1907/2006, (EC) No 1272/2008, (EU) No 528/2012, (EU) 2019/1021 and (EU) 2021/697 as regards defence readiness and facilitating defence investments and conditions for defence industry (COM(2025)0822), and to the Commission proposal of 17 June 2025 for a regulationdirective of the European Parliament and of the Council amending Directives 2009/43/EC and 2009/81/EC, as regards the simplification of intra-EU transfers of defence-related products and the simplification of security and defence procurement (COM(2025)0823), as part of the ‘DefenceDefence Readiness Omnibus’Omnibus package of 17 June 2025,

Changed– having regard to the conclusions of the European Council on European defence, particularly those of 266 JuneMarch 2025, 20 March 2025, 26 June 2025 and 623 MarchOctober 2025,

Added– having regard to its resolution of 25 March 2021 on the implementation of Directive 2009/81/EC, concerning procurement in the fields of defence and security, and of Directive 2009/43/EC, concerning the transfer of defence-related products10,

Added– having regard to its resolution of 2 April 2025 on the implementation of the common foreign and security policy – annual report 202411,

Added– having regard to its resolution of 25 November 2025 on the institutional aspects of the Report on the future of European Competitiveness (Draghi Report)12,

– having regard to the joint communication from the Commission and the High Representative of the Union for Foreign Affairs and Security Policy of 5 March 2024 entitled ‘A new European Defence Industrial Strategy: Achieving EU readiness through a responsive and resilient European Defence Industry’ (JOIN(2024)0010),

– having regard to the political guidelines for the next European Commission for the period 2024-2029, entitled ‘Europe’s choice’, presented on 18 July 2025 by the then candidate for Commission President, Ursula von der Leyen,

Changed– having regard to the report by Mario Draghi of 9 September 2024 entitled ‘The future of European competitiveness’ (Draghi report) and, in particular, Chapter 4 thereof on increasing security and reducing dependencies,

Changed– having regard to the report by Sauli Niinistö of 30 October 2024 entitled ‘Safer Together – Strengthening Europe’s Civilian and Military Preparedness and Readiness’,Readiness’ (Niinistö report),

Changed– having regard to the report by Enrico Letta of 10 April 2024 entitled ‘Much more than a Market – Speed, Security, Solidarity: Empowering the Single Market to deliver a sustainable future and prosperity for all EU Citizens’,Citizens’ (Letta report),

– having regard to the joint white paper from the Commission and the High Representative of the Union for Foreign Affairs and Security Policy of 19 March 2025 entitled ‘Joint white paper for European Defence Readiness 2030’ (JOIN(2025)0120),

– having regard to Rule 55 of its Rules of Procedure,

– having regard to the opinions of the Committee on Economic and Monetary Affairs and the Committee on the Internal Market and Consumer Protection,

Changed– having regard to the report of the Committee on Security and Defence (A10-0000/2025),(A10-0017/2026),

Change 1

RemovedA. whereas given increased geopolitical threats, in particular due to Russia’s aggression in Europe and the crisis in the Middle East, 90 % of EU citizens rightly expect increased EU cooperation in the area of security and defence to protect them and to defend its interests and values on the global stage8;

AddedA. whereas decades of defence procurement that focused on the national level, industrial fragmentation, regulatory barriers, underinvestment, divergent threat assessments and foreign policy objectives, lack of integrated capability planning and aggregated demand, as well as competition over intellectual property, have prevented the emergence of an effective and fully integrated single market for defence and have weakened interoperability in Member States’ defence systems, thereby incurring significant extra costs for the taxpayer while undermining the EU’s ability to protect the safety of its citizens, weakening the European defence technological and industrial base (EDTIB) and preventing European strategic autonomy, resilience and competitiveness from being fully realised;

RemovedB. whereas decades of defence procurement focused on the national level, industrial fragmentation, regulatory barriers, underinvestment, divergent foreign policy objectives, lack of integrated capability planning and aggregated demand, as well as competition over intellectual property, have prevented a fully integrated single market for defence, thereby incurring significant extra costs for the taxpayer while undermining the EU’s ability to protect the safety of its citizens;

AddedB. whereas the Letta and Draghi reports highlight a combination of structural weaknesses affecting the competitiveness of the EDTIB and identify fragmentation, insufficient public defence spending and limited access to financing as core challenges, and therefore recognise the need to build a true single market for defence; whereas the White Paper on the Future of European Defence emphasises that action should focus on rules and procedures for defence procurement, intra-EU transfers of defence products and mutual recognition of national certification permits; whereas the Niinistö report also underlines the need to enhance Europe’s overall preparedness, including the integration of civilian and military resilience, and points out that those needs can also be met more efficiently with a single market for defence;

RemovedC. whereas joint defence planning, development, production and procurement in the Union would allow for increased efficiency and effectiveness of public investment and industrial and operational gains, thereby increasing the social and political acceptance of necessary increases in defence investment in times of constrained budgets;

AddedC. whereas a resilient, competitive and innovative European defence industrial base is essential to deliver on the Strategic Compass and to ensure the EU’s ability to deter and defend in the light of the Readiness 2030 agenda; whereas this requires a coherent industrial and technological policy that supports interoperable capabilities, secures critical supply chains, supports small and medium-sized enterprises (SMEs), and promotes dual-use innovation;

RemovedD. whereas the Letta and Draghi reports highlight a combination of structural weaknesses affecting the competitiveness of the EU’s Defence Technological and Industrial Base (EDTIB) and identify fragmentation, insufficient public defence spending and limited access to financing as core challenges;

AddedD. whereas defence companies established in smaller Member States have been particularly affected by other Member States’ overly stringent approach to intra-EU transfers and export controls in the past, demonstrating how one choke point can undermine EU-wide supply chains; whereas SMEs face particular entry barriers to defence markets; whereas current EU competition rules and State aid frameworks lack tailored provisions for cooperative cross-border defence projects, which risks hindering industrial collaboration and consolidation; whereas no specific block exemption or similar facilitative mechanism exists for defence projects funded by EU financing instruments, creating legal uncertainty for companies engaging in joint research and development (R&D); whereas the lack of an adequate intellectual property and licensing framework for publicly funded defence R&D restricts multi-producer manufacturing of certified European designs and limits the effectiveness of joint procurement instruments;

AddedE. whereas the European defence industry is facing a severe shortage of skilled workers and an ageing workforce, which threatens to create bottlenecks in production, hindering expansion; whereas different national security clearance requirements for defence industry personnel and companies prevent increased cross-border collaboration by subjecting firms or engineers cleared for handling classified information in one Member State to lengthy, duplicate vetting in others; whereas the rapid adoption and application of innovative technologies by Europe’s armed forces is hindered by lengthy development cycles and a high aversion to risk;

AddedF. whereas in order to increase public support for these investments, the economic returns and benefits need to be spread across the EU in a balanced and proportional way, taking into account the specificities of national defence industrial bases; whereas cross-border cooperation should also ensure the fair and full participation of SMEs and small mid-caps in the defence value chain and strengthen regional cohesion across the EU; whereas defence investments have the potential to create high-quality jobs across a wide range of regions, thereby helping to achieve cohesion objectives;

AddedG. whereas recent events have exposed the risks of supply chain concentration in Europe’s defence sector, with critical defence products and inputs often dependent on a single or very limited number of suppliers; whereas such concentration creates single points of failure and vulnerabilities in times of crisis, underscoring the urgent need for diversification and redundancy in supply sources;

AddedH. whereas according to the Draghi report, European collaborative procurement accounted for only 18 % of expenditure on defence equipment procurement in 2022, well below the benchmark of 35 % agreed on in the European Defence Agency (EDA) frameworks; whereas the EU has set the political objective of sourcing at least half of its defence equipment from European production by 2030;

AddedI. whereas the objective of creating a single market for defence is ultimately a means to achieve Europe’s security and strategic autonomy, not an end in itself; whereas defence industrial integration should serve the EU’s ability to protect its citizens and values, ensure resilience and deterrence, and uphold its freedom of action; whereas a balance must be struck between market efficiency and the imperatives of sovereignty and solidarity;

AddedJ. whereas joint defence capability planning, development, production and procurement in the EU would allow for increased efficiency and effectiveness of public investment and industrial and operational gains, thereby increasing the social and political acceptance of necessary increases in defence investment in times of constrained budgets and significantly improving the ability of the EU and its Member States to achieve full defence readiness before 2030 and a genuine European defence union; whereas such joint action in the EU should be coordinated with NATO planning processes and should avoid unnecessary duplication of actions;

AddedK. whereas the Member States will only consider increasing their investment and cooperation in common defence projects if these involve the development of military capabilities of common interest to their armed forces;

AddedL. whereas the EU has presented a number of initiatives aimed at reinforcing EU defence readiness, enhancing investment conditions and incentivising joint action, yet it has not, to date, proposed the transformative measures required for the establishment of a genuine single market for defence products; whereas the EU’s rules on defence procurement (Directive 2009/81/EC) and on intra-EU transfers (Directive 2009/43/EC) have not yet been comprehensively updated despite significant changes in the security environment; whereas stakeholders often find both directives overly complex and Member States’ transposition slow and problematic, requiring disproportionate administrative effort and giving rise to fragmentation of the internal market;

AddedM. whereas in the light of growing geopolitical threats, notably Russia’s ongoing war of aggression against Ukraine and its hybrid attacks and provocations against the EU, as well as terrorism and instability in the Middle East and Africa, 90 % of EU citizens rightly expect increased EU cooperation in the area of security and defence, including within NATO and with other like-minded partners, to protect citizens and defend the EU’s interests and values on the global stage; whereas the increasingly unstable security environment in the EU’s immediate neighbourhood calls for a coherent and coordinated response, particularly to ensure the unimpeded movement of defence products and services;

The vision of a single market for defence in the Union

Change 2

Removed1. Believes that the dramatic challenges faced by the Union and its Member States require a complete rethinking of the way they cooperate on defence matters; underlines that the EU must fundamentally change its understanding of defence industry production by developing a true single market for defence, as called for in the Letta, Draghi and Niinistö reports;

Added1. Recalls that, according to the Draghi report, enhanced cooperation could lead to enormous efficiency savings of up to 30 % of annual defence spending across the EU and significantly boost the effectiveness of current defence spending; underscores the broader advantages of this for EU competitiveness, resilience and strategic sovereignty, since it promises significant employment opportunities, economic development and technological leadership throughout the EU; emphasises that a true single market for defence is crucial for fostering the competitiveness of European companies, not only within the EU but also on the global market, where they have to compete with, among others, US prime contractors;

Removed2. Recalls that enhanced cooperation could lead to enormous efficiency savings of up to 30 % of annual defence spending across the EU, amounting to at least EUR 57 billion annually and significantly boosting the effectiveness of current defence spending; underscores the broader advantages for EU competitiveness, resilience, and strategic sovereignty, promising significant employment opportunities, economic development and technological leadership throughout the EU9;

Added2. Believes that the dramatic challenges and threats faced by the EU and its Member States require a complete rethinking of the way they cooperate and coordinate on defence matters; underlines that the EU and its Member States must fundamentally change their understanding of defence industry production by developing a true single market for defence, as called for in the Letta, Draghi and Niinistö reports and in the White Paper on the Future of European Defence; urges the Member States to overcome nationalist reflexes towards their national industrial base, to give greater consideration to the benefits of EU-level defence cooperation in their national defence planning, and to acknowledge the essential role of active support from the EU institutions and agencies in facilitating and coordinating such cooperation, while strengthening mutual trust among all stakeholders;

Change 3

Changed3. Stresses that only a true single market for defence products can provide the means required to truly establish and maintain a competitivecompetitive, innovative and resilient EuropeanEDTIB Defencethat Technologicalis able to deliver the equipment needed in the required time periods and Industrialat Basethe (EDTIB)scale required and to unlock the full economic, industrial and financial potential of scale;the EDTIB; underlines that a true single market for defence products is essential to close the capability gaps and to re-establish deterrence and is hencetherefore a necessary cornerstone of a strong, sovereign and competitive Union;

Change 4

Changed4. Urges the Member States and the Commission to act swiftly to create thea true single market for defence, acting on both the supply and demand sides; recalls that the aggregatingaggregation of demand through common procurement and management throughout the life cycle,cycle management, regulatory simplification,simplification and cross-border industrial integration at EU level areis urgently needed to address such barriers and reduce reliance on non-EU countriescountries, as outlined in the Letta and Draghi reports;

Change 5

Added5. Recalls the importance of ensuring democratic legitimacy, public trust in institutions, accountability and transparency in order to secure the necessary public support for increased expenditure in the field of defence; underlines the importance of guaranteeing a fair and balanced distribution across the EU of the costs and benefits of the surge in European defence spending;

Obstacles to a single market for defence

Change 6

Changed5.6. Underlines that the current structure of the defence industrial landscape leads to unnecessary duplicationsduplication, external dependencies and inefficienciesinefficiencies, and hampers the strengthening of the EDTIB and the EU’s defence readiness; underlines that, coupled with underinvestment,underinvestment and the lack of programming of long-term defence spending, this fragmentation prevents the realisation of economies of scale that could arise from pooling defence equipment procurement and production across European companies; highlights the vital need to overcome fragmentation in the EU defence industrial landscape;landscape, exploiting potential economies of scale, and to gather greater insight into the barriers to the single market for defence; emphasises that a single market for defence must guarantee equitable opportunities for participation for industries and research organisations, including start-ups, from all Member States, including smaller economies, and should not result in an overly centralised defence industrial model; underlines that such a market design contributes to economic cohesion by creating high-quality manufacturing and R&D jobs in various EU regions, including less economically developed ones; notes, furthermore, that such geographical diversification contributes to resilience and security of supply and also helps to avoid the creation of monopolies and disadvantages for SMEs and mid-caps;

Change 7

Changed6.7. Deplores the lack of results from current coordinated capability planning and spending on defence products across the Union,EU, which has resultedled into divergent rules and eligibility criteria,criteria and inefficient spending of funds, creating legal uncertainty and often leading Member States to prioritise bilateral cooperation with non-EU countries; deploresregrets that nationalnationally determined priorities frequently take precedenceprevent overfruitful cooperation within the Union;EU;

Change 8

Removed7. Believes that the current EU legislative frameworks do not provide conditions for procurement of goods with fast innovation cycles, such as in the area of drone development; expresses concern that the single market for defence is still undermined by the insufficiently harmonised application of its rules by the Member States and by disproportionate use of the exemption provided for under Article 346 TFEU, which hampers the push towards joint EU defence procurement; highlights the need for dedicated support for small and medium-sized enterprises and small mid-caps to facilitate their involvement in the defence industry supply chain, with a view to increasing innovation while building industrial redundancies that increase the Union’s resilience and security of supply;

Added8. Deplores the persistent mutual trust deficit among Member States, which is reflected in, among other things, a reluctance to create regional centres of industrial competence, a limited degree of cross-border cooperation and joint capability planning, an insufficient level of intra-EU procurement of defence-related goods and services, and duplicated or precautionary restrictions on intra-EU transfers of defence equipment, hindering the development of fully integrated European supply chains and posing a significant obstacle to the development of a genuine single market for defence;