Edip for logistics and SMEs: "Buy European" instead of US imports – what is the European defense industry program?

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Published on: July 23, 2025 / update from: July 23, 2025 – Author: Konrad Wolfenstein

Edip for logistics and SMEs: "Buy European" instead of US imports – what is the European defense industry program? – Image: Xpert.digital

The European Defense Industry Program (Edip): A comprehensive analysis for logistics and SMEs

What is the European Defense Industry Program?

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The European Defense Industry Program is a pioneering program of the European Union, which was presented by the European Commission on March 5, 2024. It is the first concrete legislative measure to implement the European Defense Industry Strategy (EDIS) and represents a paradigm shift in European security policy.

Edip has a budget of 1.5 billion euros for the period 2025 to 2027 and is said to act as a bridge between the short -term emergency measures such as ASAP (Act in Support of Ammunition Production) and Edirpa (European Defense Industry Reinforcement Through Great Procurement Act) and a long -term structural willingness to defend. The program was developed as a direct reaction to the Russian attack war against Ukraine and aims to strengthen the technological and industrial basis of European Defense (Edtib).

First, the three main goals of Edip include the strengthening of the competitiveness and responsiveness of the EDTIB, secondly the guarantee of timely availability and delivery of defense goods and thirdly the contribution to reconstruction, reconstruction and modernization of the Ukrainian defense industry. These goals reflect the new strategic reality in which Europe has to assume more responsibility for its own security.

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Why was Edip developed?

The development of Edip is the result of a fundamental change in the European security environment. The Russian attack war against Ukraine has made it clear that Europe urgently has to strengthen its defense skills. By the beginning of the war, 78 percent of the EU member states' defense expenditure flowed to non-EU producers, with 63 percent of the US companies. This dependence on external suppliers has illustrated the need for stronger European defense autonomy.

The fragmentation of the European defense industry is another central problem. Currently the national procurement systems work largely isolated from one another, which leads to inefficiencies, double development costs and a lack of interoperability. Edip is intended to overcome this fragmentation and promote a coordinated European approach that is based on the principle of “more, better, together and European investing”.

The strategic autonomy of Europe is the focus of the considerations. Europe must be able to ensure its security itself, regardless of the changing geopolitical circumstances and the possibly declining support of traditional partners. Edip is therefore not just an industrial program, but an instrument for strengthening European sovereignty in security issues.

What specific measures does EDIP include?

Edip includes a comprehensive package of measures that cover both financial and regulatory aspects. The centerpiece is the financial support of 1.5 billion euros, which is distributed to different areas. Much of these means is intended for the promotion of common procurement to achieve scale effects and increase efficiency.

The Structure for European Armament Programs (SEAP) is one of the most innovative components of Edip. This new legal structure enables groups of Member States to form international organizations in order to carry out joint defense projects. SEAP members can benefit from VAT exemptions if they have equipment together and receive simplified procurement procedures.

The “Buy European” principle is another central component of Edip. This principle stipulates that at least 70 percent of the value creation of funded products must come from the EU or associated countries. This regulation is intended to strengthen the European defense industry and reduce the dependence on third countries, with exceptions for urgent ammunition and rocket procurement.

The Defense Industrial Readiness Board is the coordination committee of Edip and consists of representatives of the Member States, the Commission and the High Representative. This committee is responsible for the identification of common procurement goals, the coordination of the Member States and the activation of crisis measures.

How relevant is Edip for logistics and defense logistics?

The importance of Edip for logistics and defense logistics cannot be overestimated. Modern warfare, as can be observed in the Ukraine conflict, has shown that logistical skills often decide on the success or failure of military operations. The ability to provide material and staff at the right place at the right place is fundamental for every military company.

Edip addresses logistical challenges on several levels. First of all, the focus is on the safety of the supply chains. The program provides for the creation of an EU-wide supply security regime, which is intended to ensure continuous access to essential defense goods. This regime includes the mapping of critical supply chains, monitoring market discovery and the opportunity to activate emergency measures for supply crises.

The joint procurement that Edip strongly promotes has significant logistical implications. By bundling demand, Member States can not only achieve cost advantages, but also standardize their logistical systems and improve interoperability. This makes it significantly easier for joint training, maintenance and operation of weapon systems.

Military mobility represents another important aspect. Due to its geographical location, Germany acts as a central hub for troop movements in Europe. Edip supports the development of infrastructures and procedures that enable rapid laying of troops and material. This includes both the physical infrastructure and the regulatory framework for cross -border transports.

The role of civil logistics companies in defense logistics is also strengthened by Edip. The program acknowledges that modern defense can no longer be based exclusively on military capacities, but requires the integration of civil actors. Civil logistics companies can bring their expertise and capacities into defense planning and thus increase the resilience of the entire system.

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Which specific logistical areas are funded by Edip?

Edip promotes various specific logistical areas that are of central importance for European defense ability. The ammunition logistics are at the forefront because the Ukraine conflict has revealed massive ammunition consumption rates. The program not only supports the production capacities, but also the storage and distribution systems for different types of ammunition.

The maintenance logistics forms another focus. Modern weapon systems require complex maintenance and repair procedures that often need specialized components and expertise. Edip promotes the development of common maintenance capacities and the standardization of maintenance processes to maximize the availability of the systems.

Material catalorization and data standards play an important role in the interoperability of logistical systems. The NATO Codification System (NCS), which is already used by the Bundeswehr, serves as the basis for European standardization. Edip supports the further development of these systems and their adaptation to modern digital requirements.

The reserve and strategic stock is promoted by Edip in the form of the Defense Industrial Readiness Pools. These pools enable groups of Member States to build and manage strategic reserves together. If necessary, the reserves can then be quickly redistributed between the partners to bridge acute bottlenecks.

Transport and packaging logistics for defense goods require special expertise and certifications. Edip supports the development of common standards and the mutual recognition of certifications between the Member States. This reduces bureaucratic hurdles and accelerates the cross -border movement of defense goods.

How can Edip small and medium -sized companies benefit?

Small and medium -sized companies (SMEs) occupy a central position in the European defense industry. According to the EU definition, companies with fewer than 250 employees and annual sales of a maximum of 50 million euros or an annual balance sheet of a maximum of 43 million euros are considered SME. Over 2,000 such companies are already active in the European defense supplies chains.

Edip recognizes the special importance of SMEs for innovation and agility in the defense industry. The program provides special support measures that are tailored to the special needs and challenges of smaller companies. These measures include higher financing rates for projects with SME participation and simplified application procedures.

The European Defense Fund (EDF) contains dedicated tenders that are only accessible to SMEs and research organizations. These tenders can cover up to 100 percent of the eligible costs and are specially designed to promote innovative solutions from smaller actors. The projects can run between two and four years and run budgets of up to six million euros.

The challenges of access to financing that many SMEs are faced with in the defense industry are specifically addressed by Edip. Problems with ESG standards (Environmental, Social, and Governance), which can lead to banks and other financial service providers of defense companies refuse service, are to be alleviated by the program. Edip creates incentives for investments in the defense industry and can help close the financing gap.

The integration of SMEs into larger defense projects is systematically promoted by Edip. The program stipulates that large system integrators work with SMEs and integrate their innovative solutions into their projects. This creates new market opportunities for smaller companies and diversifies the supply chains.

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What role do SMEs play in improving European defense?

SMEs play a crucial role in improving European defense, which goes far beyond its quantitative presence. As a carrier of innovation and technological top performance, you bring fresh perspectives and agile development approaches to a traditionally conservative environment. Their ability to react quickly to changing requirements make them valuable partners for the development of future -oriented defense technologies.

In critical technology areas such as artificial intelligence, cybersecurity and unmanned systems, SMEs are often pioneers and innovation drivers. These areas are of crucial importance for modern warfare, as the Ukraine conflict has impressively demonstrated. Due to their flexibility and expert knowledge, SMEs can develop innovative solutions faster than large, established corporations.

The diversification of the supply chains is another important contribution from SMEs to European defense security. Too strong dependence on a few large suppliers can lead to vulnerabilities that can become problematic in times of crisis. SMEs contribute to resilience by providing alternative delivery sources and technology approaches.

SMEs from civilian industries can make valuable contributions to defense through dual-use applications. Companies from mechanical engineering, automotive industry or information technology often have technologies and manufacturing capacities that can be used with low adjustments for defense purposes. These cross -connections strengthen the industrial basis and create synergies between civil and military applications.

The cross -border cooperation between SMEs is particularly promoted by Edip because it contributes to the integration of the European defense industry. By participating in multinational projects, SMEs can expand their markets and at the same time contribute to the European unity in the area of defense.

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How does EDIP's practical implementation work?

EDIP's practical implementation takes place via several interlocking mechanisms and structures. The Defense Industrial Readiness Board acts as a central coordination body and is responsible for the strategic direction of the program. It identifies priorities, coordinates the activities of the Member States and monitors the implementation of the various measures.

The annual work programs form the operational heart of Edip. These programs define the specific tenders, budget allocations and thematic focus for each year. They are adopted by the Programmittee program, chaired by the Commission and with the participation of the Member States.

The Structure for European Armament Programs (SEAP) enables groups of at least three Member States to create formal cooperation structures. These structures have the status of international organizations and can carry out procurement procedures independently. You benefit from simplified procedures, VAT exemptions and EU cofinance.

The European Military Sales Mechanism is intended to serve as a central platform for the availability and exchange of defense products. This mechanism, which is based on the US Foreign Military Sales System, enables government-to-government transactions and reduces bureaucratic hurdles when trading with defense goods.

Ukraine Support Instrument (USI) represents a special aspect of edip implementation. With a budget of 300 million euros, it is intended to promote the integration of the Ukrainian defense industry into the European industrial basis. This includes direct investments in Ukrainian companies and joint development projects.

What are the challenges when implementing Edip?

The implementation of Edip faces various important challenges that are both structural and political in nature. The European Court of Auditors has already pointed out that the planned budget of 1.5 billion euros may not be sufficient to achieve the program's ambitious goals. The short term by 2027 additionally strengthens this problem.

The coordination between 27 member states with different strategic cultures, industrial capacities and political priorities is a significant challenge. While some countries traditionally rely on national defense solutions, they have to learn to think and act in a European framework.

The balance between European preference and open markets is another complex task. The “Buy European” principle can lead to tensions with international trade rules and existing collaborations with non-EU partners. Transatlantic relationships in particular could be stressed by protectionist tendencies.

The technological integration of various national systems and standards requires considerable efforts. Decades of separate developments have led to incompatible systems, the harmonization of which takes time and resources. Interoperability must be guaranteed at both a technical and operational level.

The financing gap for SMEs in the defense industry remains, despite the improvements by Edip. ESG criteria and the general reluctance of the financial sector to defense investments continue to create barriers. These structural problems cannot be solved solely by EU programs.

How is Edip in relation to other European defense initiatives?

Edip is part of a comprehensive ecosystem of European defense initiatives and must be understood in this context. The permanent Structured Cooperation (PESCO) offers the legal framework for the increased cooperation in the defense area and supplements Edip with concrete cooperation projects. Projects that are carried out as part of PESCO can benefit from additional financing bonuses.

The European Defense Fund (EDF) with its budget of almost 8 billion euros for 2021-2027 focuses primarily on research and development. Edip complements the EDF by supporting the commercialization and production phase and thus closing the gap between research and market launch.

The European Defense Agency (EDA) plays a coordinating role and brings its expertise into different edip bodies. The EDA's Capability Development Plan (CDP) serves as a reference to prioritization of edip measures and ensures coordination with the identified skill gaps.

The short -term emergency programs ASAP and Edirpa are replaced by Edip and transferred to a long -term structure. These programs have provided important experiences, especially in the area of common procurement, which are now systematically expanded in Edip.

The recently presented white paper “Readiness 2030” defines the overarching strategic goals of European defense. Edip is a central instrument for the implementation of this vision and contributes to closing the identified capacity gaps.

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What effects does EDIP have on the German defense industry?

For the German defense industry, Edip brings with it both opportunities and challenges. As one of the leading European defense nations, Germany can bring its technological expertise and industrial capacities into European projects and benefit from scale effects. German industry is already well positioned in many areas, from air defense systems to armored vehicles.

The central geographical situation in Germany makes it a natural logistics center for European defense cooperation. German companies can contribute their expertise in military logistics and Host Nation and open up new business areas. The role as a hub for NATO and EU operations creates additional market opportunities.

German SMEs, which traditionally have a strong position in mechanical engineering and high technology, can benefit from the edip funding options. Their innovative strength and technical expertise are required in areas such as cyber security, artificial intelligence and autonomous systems. The digitization promotion of German middle class can work synergically with edip measures.

The challenge for German companies lies in adapting to European cooperation structures. Traditionally national procurement procedures must be supplemented by multinational approaches. This requires new skills in international project processing and in dealing with various regulatory framework.

The German government supports Edip with appropriate budget stallocations and political flanking. The Federal Ministry of Defense has recognized Edip as a strategic instrument to strengthen European defense ability and actively work on its implementation.

How will Edip affect European security architecture in the long term?

The long -term effects of EDIP on European security architecture are complex and far -reaching. The program contributes to the development of a real “European defense union” by creating the industrial foundations for a common defense policy. This development goes beyond pure industrial policy and affects fundamental questions of European integration.

Strengthening European defense autonomy by Edip changes transatlantic relationships. Europe becomes less dependent on American armaments imports and can also make a larger contribution to common security. This can lead to a more balanced partnership within NATO, in which Europe assumes more responsibility.

The integration of the Ukrainian defense industry by Ukraine Support Instrument has geopolitical implications that extend beyond the current conflict. It signals Europe's long -term commitment to Ukraine and contributes to stabilizing the eastern neighborhood.

Edip could serve as a model for other regions that want to intensify their defense cooperation. The developed mechanisms and structures could be applied to other security policy challenges. The experience with cross -border defense cooperation creates precedent for further integration projects.

The technological dimension of Edip contributes to European sovereignty in critical future technologies. The promotion of innovations in areas such as quantum technology, cyber security and artificial intelligence strengthens Europe's position in the global technology competition. These technologies have both civil and military applications and contribute to the overall economic competitiveness.

The European Defense Industry Program thus represents a turning point in European security policy. It combines industrial, technological and strategic dimensions into a coherent approach that enables Europe to master the challenges of the 21st century. For logistics companies and SMEs, it opens up new horizons of cooperation and innovation, while at the same time it contributes to strengthening European security and sovereignty. The successful implementation of Edip will significantly depend on how well it is to harmonize the various national interests and to develop a real European defense culture.

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