With €7.3bn allocated for defence research and capability development through 2027, the European Defence Fund is reshaping how Europe develops military technologies, strengthens industrial cooperation, and responds to a rapidly shifting security landscape.
Europe’s defence landscape is undergoing a quiet but significant transformation. At the centre of that shift is the European Defence Fund (EDF), the European Union’s flagship programme designed to finance collaborative military research and development across the bloc.
Established to strengthen Europe’s defence technological and industrial base, the EDF provides funding for multinational projects developing next-generation military capabilities. Its goal is not only technological innovation but also greater cooperation between European defence industries and armed forces.
The programme runs from 2021 to 2027 with a total budget of roughly €7.3bn, making it one of the most substantial collective defence research initiatives ever launched in Europe.
For decades, defence development across Europe was fragmented, with national programmes often duplicating efforts or producing systems that struggled to operate together. The EDF aims to address those inefficiencies by encouraging countries to design and build critical military technologies jointly.
The result is an effort that blends industrial policy, security strategy, and technological research into a single funding mechanism.
What the European Defence Fund is designed to do
The European Defence Fund supports multinational projects that develop advanced defence technologies and equipment. Funding focuses primarily on collaborative initiatives involving companies, research organisations, and governments from multiple European countries.
The programme operates across the entire research and development pipeline, from early-stage exploration of new technologies to the development of operational defence capabilities.
Broadly, the EDF finances two main types of activity:
Collaborative defence research, covering early technological exploration and concept development
Capability development, supporting the design and testing of concrete defence systems that may later enter production
Of the fund’s €7.3 billion budget, approximately €2.7bn is earmarked for research activities, while around €5.3bn supports capability development projects. These development programmes typically complement national investments, thereby amplifying EU funding to support existing defence initiatives.
In many cases, the EDF provides grants that can cover up to 100% of eligible research costs, depending on the nature of the project. Development projects may receive lower percentages but can benefit from incentive bonuses, particularly when they involve small and medium-sized enterprises (SMEs), mid-sized companies, or projects linked to Permanent Structured Cooperation (PESCO) initiatives.
The European Commission manages the programme directly, though in certain cases, project administration can be delegated to specialised organisations.
How the programme is structured
Each year, the Commission publishes a work programme outlining funding priorities and specific calls for proposals.
These work programmes are organised across 34 thematic and cross-cutting categories, covering the full range of military domains and enabling technologies. Topics range from cyber defence and artificial intelligence to naval platforms and advanced sensors.
The priorities are aligned with defence capability needs identified by EU member states through the Common Security and Defence Policy (CSDP) framework. Much of the guidance comes from the Capability Development Plan (CDP), a strategic document identifying the most urgent capability gaps across European armed forces.
The annual work programmes are prepared in close consultation with national governments through the EDF Programme Committee. The European Defence Agency (EDA) and the European External Action Service (EEAS) also contribute to shaping priorities.
The aim is to ensure that EDF-funded projects respond to genuine operational requirements rather than purely technological curiosity.
The 2026 EDF Work Programme
In December 2025, the European Commission adopted the EDF Work Programme for 2026, allocating €1bn for new collaborative defence research and development initiatives.
The programme includes 31 call topics, grouped into several funding categories.
Seven thematic calls focus on specific technology areas, while three non-thematic calls allow applicants to propose projects addressing emerging defence needs. Additional actions target specific threats and technological challenges.
One initiative focuses on developing countermeasures against hypersonic glide vehicles, reflecting growing concerns about advanced missile technologies capable of travelling at extreme speeds and manoeuvering unpredictably.
The programme also includes two initiatives linked to the EU Alliance for defence medical countermeasures, reflecting lessons learned from recent crises about the need for rapid medical response capabilities in military contexts.
Major defence capabilities receive half the budget
Around half of the €1bn budget will support collaborative development of large-scale defence capabilities.
Among the systems targeted for development are:
A European endo-atmospheric interceptor, designed to defend against advanced missile threats
A next-generation main battle tank
A multiple rocket launcher system
A semi-autonomous naval vessel
These projects aim to strengthen Europe’s strategic autonomy by reducing its dependence on external suppliers for critical military systems.
At the same time, collaborative development helps ensure that equipment designed by different European countries can operate together effectively during joint missions.
Investment in future military technologies
Roughly one quarter of the 2026 EDF budget is dedicated to emerging technologies likely to shape the future of warfare.
These include research areas such as:
Quantum-secured communication networks
Electronic warfare technologies
Multi-domain operational cloud infrastructure
Advanced energy systems for military platforms
Such technologies may not immediately translate into deployable equipment but are considered essential for maintaining technological competitiveness in the decades ahead.
In parallel, another quarter of the funding is allocated to the EU Defence Innovation Scheme (EUDIS), which supports breakthrough innovations and smaller technology players entering the defence sector.
Within this envelope, around €60m is reserved for disruptive technologies, while another €60m supports open calls targeted at SMEs.
Why Europe is increasing defence spending and capabilities
The expansion of programmes like the European Defence Fund reflects a broader shift in Europe’s security environment.
For much of the post–Cold War period, many European governments reduced defence budgets, prioritising economic integration and social spending. Military procurement slowed, and national armed forces shrank.
Over the past decade, however, geopolitical conditions have changed dramatically. Several factors have driven renewed attention to defence investment.
Russia’s war in Ukraine
The most immediate catalyst has been Russia’s full-scale invasion of Ukraine in 2022, which fundamentally altered Europe’s perception of security threats.
The conflict demonstrated the scale of conventional warfare that could return to the European continent and exposed weaknesses in ammunition stockpiles, logistics capacity, and military readiness across many EU countries.
European governments have since committed to rebuilding military capabilities and expanding defence industrial production.
Strategic competition between major powers
Global strategic competition is intensifying. The military modernisation of countries such as China, alongside ongoing tensions involving NATO and Russia, has reinforced concerns that Europe must be able to protect its interests in an increasingly unstable world.
Defence planners have also emphasised the growing importance of technologies such as artificial intelligence, cyber warfare, and space systems.
Developing these capabilities requires sustained research investment and cooperation between governments and industry.
Reducing fragmentation in European defence
Another motivation behind initiatives like the EDF is the long-standing fragmentation of Europe’s defence sector.
European countries collectively spend significant sums on defence, but the investment is often spread across many separate programmes.
For example, Europe operates far more types of military equipment than the United States, including numerous models of tanks, aircraft, and naval platforms.
This diversity increases costs and complicates interoperability between allied forces.
By financing joint development programmes, the European Union hopes to reduce duplication and encourage the creation of shared systems.
Strengthening Europe’s defence industry
The EDF also has an industrial dimension.
Europe possesses major defence companies and research institutions, but the sector faces intense global competition. Collaborative EU funding can help companies pool resources, accelerate development, and maintain technological leadership in areas such as aerospace, cyber defence, and autonomous systems.
This approach also aims to support smaller firms and innovative start-ups that might otherwise struggle to enter the defence market.
Innovation and the EU Defence Innovation Scheme
To encourage technological experimentation, the European Commission established EUDIS as part of the EDF.
The initiative is designed to help start-ups, research laboratories, and small companies navigate the defence sector and bring new technologies to market.
Defence innovation has historically been dominated by large contractors with long development cycles. EUDIS aims to broaden the ecosystem by supporting innovators at earlier stages of development.
The scheme offers funding and networking opportunities throughout the technology development process, from concept testing to demonstration and commercial scaling.
By lowering entry barriers, policymakers hope to stimulate breakthroughs in areas such as autonomous systems, advanced sensors, and cyber capabilities.
Opening the door for smaller players
Participation in EDF projects requires collaboration across borders.
Applicants must typically form a consortium involving at least three organisations from three EU member states or associated countries. Currently, Norway is the only associated country outside the EU participating in the programme.
For projects focused on disruptive technologies, smaller consortia can apply, requiring at least two entities from two participating countries. Eligibility rules also impose strict conditions regarding ownership and control.
Participating organisations must be based in the European Union or an associated country, with executive management structures located within the EU. Companies controlled by non-associated third countries generally cannot receive EDF funding, although exceptions may be granted under specific safeguards.
Entities from non-associated countries may participate in projects, but they do not receive funding and must comply with rules designed to protect European security interests.
Cascade funding and the MaJoR project
One mechanism intended to broaden participation is Financial Support to Third Parties (FSTP), commonly referred to as cascade funding.
Under this approach, organisations that receive EDF grants can redistribute part of their funding to smaller partners working on specific technological challenges.
This structure enables start-ups, niche technology providers, and research teams to contribute without joining large multinational consortia.
The MaJoR project provides an example of how the mechanism works.
Its first cascade sub-call runs from 28 January to 25 March 2026, seeking up to 30 innovators capable of developing technological solutions for defence challenges across land, air, and maritime domains.
Such initiatives are designed to inject new ideas and specialised expertise into large-scale defence projects.
Information events and industry engagement
To help organisations navigate the application process, the European Commission hosts regular EDF Info Days.
The next event is scheduled for 10–11 March 2026 in Brussels, with both in-person and online participation.
These sessions provide guidance on applying through the EU Funding & Tenders Portal, as well as networking opportunities for potential project partners.
The previous edition attracted more than 5,000 participants from across Europe and beyond, reflecting growing interest in the programme among defence companies, universities, and research institutes.
Europe’s role in global defence research
Since the EDF regulation came into force in 2021, the European Commission has committed nearly €6.5bn to defence research and development projects.
That level of investment positions the EU among the world’s largest public investors in defence innovation.
EDF-funded projects span a wide range of technological fields, including:
Artificial intelligence for military applications
Cyber defence technologies
Quantum communications
Biotechnology research
Electronic warfare systems
Drone and counter-drone technologies
Multi-domain combat cloud infrastructure
These projects collectively aim to enhance Europe’s ability to operate in increasingly complex military environments.
A long-term experiment in defence cooperation
The European Defence Fund represents a significant experiment in collective defence investment at the EU level.
Historically, defence policy remained largely within the control of national governments. The EDF does not replace national defence spending, but it introduces a new layer of coordination by encouraging countries to develop technologies and capabilities jointly.
Whether the programme ultimately transforms Europe’s defence landscape remains an open question.
What is clear, however, is that the scale of funding, the range of technologies involved, and the increasing urgency of Europe’s security challenges are pushing defence cooperation into territory that would have seemed unlikely just a decade ago.
As geopolitical tensions continue to shape policy priorities, the EDF is likely to remain a central instrument in Europe’s effort to modernise its defence capabilities while strengthening industrial collaboration across the continent.
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