Alexander Stubb, Vice-President of the European Investment Bank (EIB) and Jorge Domecq, Chief Executive of the European Defence Agency (EDA) today signed a Memorandum of Understanding (MoU) to strengthen cooperation between the two institutions.
The European Council of 19 October 2017 encouraged the EIB to examine further steps with a view to supporting investments in defence research and development activities. As a response, the EIB recently approved the European Security Initiative - Protect, Secure, Defend, strengthening its support for RDI for dual-use technologies, cybersecurity and civilian security infrastructure. Today the EIB and EDA teamed up to support EU policy objectives, in particular as regards the Common Security and Defence Policy (CSDP). The cooperation between the two entities materialises as major European initiatives supporting the EU level of ambition in the area of security and defence are launched, including a European Defence Fund.
As a first step, EDA and the EIB envisage cooperation in the Cooperative Financial Mechanism (CFM). The CFM is foreseen as a mechanism for EDA member states to financially support the set up and conduct of the development of military technology. The EIB role in the CFM would focus on supporting the development of dual use technologies. Additionally, the two organisations agreed to exchange expertise, in particular with a view to identify possible financing opportunities for defence and security-related Research and Technology projects in support of EDA participating Member States. EDA stands ready to support the EIB in identifying projects, that are potentially eligible for its assistance; this could include both projects promoted by the Member States, such as those in the context of the recently launched Permanent Structured Cooperation (PESCO), as well as projects promoted by companies including Small and Medium Sized Enterprises in the defence and security sector.
“European security and defence is high on the agenda of decision-makers and citizens alike. EDA and EIB have complementary expertise and are natural partners. The Agency will support the EIB in the identification and assessment of projects as well as by putting its defence expertise at the service of the Bank”, said Jorge Domecq.
“Under the European Security Initiative -Protect, Secure, Defend, the EIB is ready to step up its support to the security and defence sector. In line with our mission, we look forward to supporting in particular investment projectsthat target dual-use technologies, which can be commercialized also in civilian applications”, said EIB Vice-President Alexander Stubb. “Today’s cooperation agreement is welcome news for Europe’s security as it will help the European Defence Agency and the European Investment Bank to better contribute to EU policy goals”.
Cooperative Financial Mechanism
The Cooperative Financial Mechanism (CFM) will play an important role in easing the launch phase of cooperative projects. Designed to support any type of collaborative efforts, in the R&T, R&D or acquisition phase, its support will include access to funding, a well-known shortfall hampering cooperative efforts, as well as the reduction of bureaucracy. It will result in an increased quality of public expenditures.
The Mechanism, developed as an EDA ad hoc Category A programme, is voluntary. Member States decide if they wish to participate, contribute and support projects.
Once negotiations on the Programme Arrangement are finalised, the CFM is likely to be based on two pillars. In the first, intergovernmental, Member States will have the opportunity to mutually support via a system of reimbursable advances and deferred payments. In the second, the European Investment Bank will act as the sole lender, supporting dual use projects in line with its policies. This will enable an increased support from EIB to the security and defence agenda, an objective underlined several times by the European Council.
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