On Tuesday, 17 June, the European Commission unveiled a sweeping package of proposals aimed at dramatically speeding up investment in Europe’s defence industry. In response to the urgent security challenges posed by the ongoing war in Ukraine, the Commission has proposed the “Defence Readiness Omnibus.” This initiative seeks to minimise bureaucracy, clarify regulations for investors, and enhance Europe’s ability to develop the necessary military capabilities. The move signals a significant push from Brussels to ensure the European Union, and its member states can effectively deter threats and prepare for potential high-intensity conflicts.
The proposals come as leaders across the bloc warn that Europe must rapidly scale up its manufacturing of weapons and equipment. As Russia’s war in Ukraine enters its third year, the initiative seeks to adapt the EU’s peacetime regulatory framework for a more dangerous world. As Henna Virkkunen, the Commission’s Executive Vice-President: stated: “We are sending a clear political signal: Europe is serious about defence and creating credible preparedness. We are cutting through bureaucracy to help Member States and industry act faster, invest smarter, and strengthen our collective deterrence.”
Slashing red tape
A central pillar of the Commission’s plan is a direct cut on the bureaucracy that can hamper vital defence projects. Currently, gaining the necessary permits for new defence infrastructure, such as a munitions factory, can take several years. These ambitious proposals aim to slash this timeframe to just 60 days by introducing a fast-track permitting system.
Further measures are designed to simplify procedures within the European Defence Fund (EDF), the EU’s programme for funding collaborative defence research and development. The changes will reduce the administrative burden on companies applying for funds and will also make it easier for Ukrainian defence firms to participate. The goal, as described by Valdis Dombrovskis, Commissioner for Economy and Productivity, is to “unleash Europe’s overwhelming economic heft, by breaking down internal barriers, cutting red tape and clarifying the rules, so that a truly European defence industrial and technological capacity can be ramped up quickly, efficiently and effectively.”
Unlocking Investment and Easing Rules
Beyond cutting red tape, the proposals tackle a significant hurdle for the defence sector: access to finance. For years, some banks and investment funds have been wary of the arms industry, partly due to concerns about reputational risk and compliance with ESG standards.
To address this issue, the Commission will issue clear guidance affirming that investments in defence companies align with ESG principles, except for those firms that manufacture weapons prohibited under international conventions, such as landmines. This clarification aims to dispel what officials describe as “persistent misconceptions” and to promote private investment.
Furthermore, the EU will revise its approach to assessing mergers and acquisitions in the defence sector. Under the new proposals, mergers that are deemed to enhance the EU’s “defence readiness” will be viewed more favorably by competition regulators.
Conclusions
The Commission’s proposals represent a clear and decisive shift in the EU’s approach to defence. The overarching aim is to build a robust, responsive, and innovative European defence technological and industrial base that can meet the demands of the current geopolitical landscape. By simplifying regulations, encouraging joint procurement between member states, and making it easier for investors to back the sector, Brussels hopes to turn its strategic ambitions into tangible military capability.
The European Parliament and the Council will now negotiate this legislation. While debates are anticipated, the path forward is clear. Europe is taking significant steps to strengthen its defences and ensure it has the industrial capacity to maintain peace by preparing for the potential of conflict.
