What is the EDF Financial Toolbox?

The Commission Communication of 7 June 2017  ‘Launching the European Defence Fund’ announced the creation of an ad-hoc Committee comprising EU countries and other selected public sector bodies to develop a standardised set of Financial Toolbox instruments aimed at addressing financing challenges for collaborative development and procurement.

The Expert Group on the Financial Toolbox ('EGFT') includes EU country experts from the ministries of finance and defence, the European Defence Agency, OCCAR (Organisation for Joint Armament Co-operation), and the European Investment Bank Group. It is chaired by DG ECFIN and includes the representatives of other services and institutions, notably the European External Action Service.

The mandate of the EGFT was to:

• Evaluate how different models of cooperation, collective ownership and risk-sharing with private sector can deliver access to expensive capabilities on more advantageous terms for the participating MS
• Identify ways in which financial instruments, in the form of guarantees or other support, can be deployed as a fiscally efficient way to strengthen the resilience and strategic autonomy of the European defence sector

The EGFT met 5 times between January and July 2018. It provided a focal point for reflections on how to best use EU and national public finance to support multi-state defence collaboration and to strengthen the capacity of the defence supply-chain.

Documents

What is the outcome of the EGFT work?

The EGFT resulted in the publication of 3 deliverables:

• A mapping of all key policy processes that are involved in triggering or supporting multi-state defence capability acquisition (Deliverable 1)
• An evaluation of possible financial solutions for multi-state defence capability projects, and a method for matching against project characteristics (Deliverable  2)
• A ‘needs analysis’ for the deployment of financial instruments to address finance failures specific to the defence sector (Deliverable 3)

The documents have been drafted by DG ECFIN on the basis of the Expert Group work. The documents do not constitute policy positions that are binding on either the EU countries or the European Commission. Possible policy follow-up will be based on further considerations by the relevant bodies and institutions within their respective fields of competence.