The EU seeks to slash red tape for defence as money 'is not enough'

Euronews

6 hours ago

The European Commission on Tuesday unveiled a series of measures it hopes will slash red tape for the defence sector and get it to start significantly boosting production.
The so-called Simplification Omnibus includes measures to fast-track permitting for defence companies, facilitate cross-border movement through the supply chain, as well as guidance to improve access to finance and to dangerous chemical substances.
It comes three months after the release of the 'Readiness 2030' plan to increase the production and deployment of critical military capabilities the EU needs by 2030 when intelligence agencies believe Russia could be in shape to attack another European country.
The proposal planned for up to €800 billion to be poured into the sector over the coming four years through relaxed fiscal rules and loans from the Commission of money raised on the markets.
"Money alone, however, is not enough, if traditional 'red tape', which maybe is fit for peacetime, will kill industrial efforts to ramp-up production," Andrius Kubilius, the Commissioner for Defence and Space told reporters at a press conference on Tuesday.
"Now we need rules that give industry, armed forces and investors speed, predictability and scale," he added.
One of the flagship proposals of the latest package is for member states to create a single point of contact for defence companies to submit permit requests, with authorities urged to respond within a 60-day timeframe.
Currently, it can take up to three or four years for defence companies to secure the various permits they need to expand their operations, with the required paperwork, such as environment impact assessments, different from agency to agency.
Environmental NGOs, among other citizen groups, may well have a problem with that fast-track approach. "What we also indicate is that whenever there are subsequent litigation or claims - being administrative or judicial - they should also be treated as a priority according to the law," the Commission official said when quizzed on potential legal challenges.
Another key plank of the proposal is to amend the Defence Procurement directive - to facilitate joint procurements - and the directive on Intra-EU transfers of defence products.
For the latter, the Commission seeks to create a single dedicated licence to allow components necessary for the production of a defence investment project to cross borders as many times as necessary without applying for a new licence each time - a process that can currently delay projects by up to one and a half years.
These "quick fixes", the Commission official said, can "save a lot of time".
How "quick" they will be will however depend on European lawmakers and member states who will have to negotiate and approve the amendments, as well as the new legislation foreseen in the package.
Other elements seek to clarify which environmental and health and safety derogations can be applied to the defence sector and which parts of the sector investors may safely pour money into while respecting the bloc's environmental, social and governance (ESG) rules.
Chemicals are a critical part of weapons production, especially ammunition, but the use of many chemicals is restricted in the EU under its REACH legislation to protect human health and the environment from the risks they carry. A proposal to further restrict the use of PFAS (per- and polyfluoroalkyl substances) on specific sectors is currently also being examined by the EU.
As such, member states have different rules on their use depending on the type of substance, the manufacturing purpose and how much is required with licences often granted on a case-by-case basis.
The Commission's upcoming guidelines will therefore aim to highlight that REACH includes a derogation that would allow member states to approve, at the national level, the use of certain chemicals citing the need to boost defence readiness production or activities.
This was a core ask from the industry.
"If we have to replace these substances immediately, we won't have a way of manufacturing things," Micael Johansson, the CEO of Swedish aerospace and defence company Saab and president of the Aerospace, Security and Defence Industries Association of Europe (ASD) told Euronews last week.
"We have to make decisions on what's most important now for manufacturing so maybe we need some sort of exemptions from that in this crisis situation where we have to build things," he added.
Another set of guidelines will seek to reassure financial institutions that they will not be penalised for pouring money into the sector by clarifying that "the Union's sustainable finance framework does not impose any limitations on the financing of the defence sector," Valdis Dombrovskis, the Commissioner for Trade, told reporters.
The guidance will indicate that defence investments "can contribute to the stability and security and peace in Europe", the official speaking on condition of anonymity said, and that only prohibited weapons are strictly off-limits.
The Commission expects 'the cost-saving of the simplification of procedures to be major', the official also said, although an estimate is not expected to be released until later in the summer.
The European Commission published a new legislative proposal on Tuesday on how the bloc must phase out Russian oil and gas by 2027.
The proposal outlines the deadlines and strategies for EU countries to progressively reduce, and ultimately end, their reliance on Russia as a fuel supplier, as part of the REpowerEU Plan.
The proposal does not address nuclear energy, with a senior European Commission official telling journalists that that would be addressed separately.
Since the beginning of Russia's full-scale invasion of Ukraine in February 2022, the EU has progressively reduced the trade of oil, gas and nuclear material from Russia.
As of 2024, the EU still relied on Russian imports for 19% of its gas and 3% of its crude oil supply.
"Russia has repeatedly attempted to blackmail us by weaponising its energy supplies. We have taken clear steps to turn off the tap and end the era of Russian fossil fuels in Europe for good," European Commission president Ursula von der Leyen said.
Under the draft rules, new contracts for Russian gas will be banned starting 1 January 2026. Existing short-term contracts must end by 17 June 2026, with limited exceptions for landlocked countries tied to long-term agreements, which will be allowed until the end of 2027.
Long-term contracts for Liquified Natural Gas (LNG) terminal services involving Russian companies will also be prohibited, freeing up infrastructure for alternative suppliers.
EU countries will be required to submit detailed diversification plans outlining specific steps and milestones to replace Russian energy imports.
In a meeting between EU ministers for energy on Monday, Hungary and Slovakia expressed their disagreements with the plan.
"Energy policy is a national competence and this endangers our sovereignty and energy security. Given the Middle East escalation, we proposed no such plan be tabled at all," Hungary's Foreign Minister Péter Szijjártó wrote in a post on X.
Despite this opposition, the European Commission decided to move forward with the text.
The Danish government, which will take over the presidency of the Council of the EU on 1 July, wants to reach a political agreement on the text as soon as possible.
Lars Aagaard, Danish Minister for Climate and Energy, told journalists on Monday that the Danish presidency will make an effort to "reach [political approval] as fast as possible," adding: "If we succeed in concluding [the legislation] before New Year, I think that we have done a tremendous job."
The legislation will follow the standard procedure. The co-legislators, namely the European Parliament and the Council of the EU, will negotiate their own position on the file.
Afterwards, the text will enter inter-institutional negotiations, the so-called trilogue, to find a political agreement.
EU member states in the Council will need a qualified majority to approve the proposal on their side.
This reinforced majority requires the support of at least 15 of the 27 member states, representing at least 65% of the EU population.
The European Parliament will vote on the proposal by a simple majority vote.