EUROPEAN COMMISSION

Brussels, 22.4.2025

COM(2025) 188 final

2025/0103(COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153, (EU) 2023/1525 and 2024/795, as regards incentivising defence-related investments in the EU budget to implement the ReArm Europe Plan

(Text with EEA relevance)

EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

The EDF amendment aims to enable cumulation of funding between the EDF and other Union programmes for the same action and introduces the possibility to transfer resources allocated to Member States under cohesion policy funds to the EDF. ASAP is also amended to enable for similar transfers from Member States and to extend the applicability of the Regulation beyond 30 June 2025.

The DEP amendment stresses the support to dual-use actions as a general and specific objective of the instrument and the possibility to use the budget flexibility to support additional well focused investments for the competitiveness and strategic autonomy of the EU.

The Horizon Europe programme amendment will enable support to technologies with potential dual-use applications under the European Innovation Council (EIC) Accelerator, as well as equity support for technologies with a focus on defence applications for scale-up. Unused amounts and potential returns from investments made by the EIC Fund during the pilot phase under Horizon 2020 should be made available in order to finance additional projects in dual use and defence benefitting from the amended scope.

The CEF programme amendment for the digital sector will enable the connected digital capacities required for the development of defence products and technologies, including connecting cloud, AI and AI Gigafactories.

•Consistency with existing policy provisions in the policy area

•Consistency with other Union policies

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

•Legal basis

•Subsidiarity (for non-exclusive competence)

•Proportionality

•Choice of the instrument

3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

•Ex-post evaluations/fitness checks of existing legislation

•Stakeholder consultations

•Collection and use of expertise

•Impact assessment

•Regulatory fitness and simplification

•Fundamental rights

4.BUDGETARY IMPLICATIONS

5.OTHER ELEMENTS

•Implementation plans and monitoring, evaluation and reporting arrangements

•Explanatory documents (for directives)

2025/0103 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153, (EU) 2023/1525 and 2024/795, as regards incentivising defence-related investments in the EU budget to implement the ReArm Europe Plan

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 114, 164, 172, 173, Article 175, third paragraph, Articles 176, 177 and 178,182 183, 188, 192(1) thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee 2 ,

Having regard to the opinion of the Committee of the Regions 3 ,

Acting in accordance with the ordinary legislative procedure,

Whereas:

(1)The unprecedented geopolitical instability and the rapid deterioration of regional and global threat levels require an urgent and significant step up of the Union spending on research and development, industrial capacity and development of infrastructures connected with security and defence. As identified in the Joint White Paper for European Defence Readiness 2030, the Union should do more to support the urgent need to increase European defence-related investments with the Union budget.

(2)The Strategic Technologies for Europe Platform (STEP) established by Regulation (EU) 2024/795 of the European Parliament and of the Council 4  is an initiative aimed at boosting Union competitiveness by mobilizing funds from 11 existing Union programmes towards critical technologies in 3 strategic sectors: digital technologies and deep tech innovation, clean and resource-efficient technologies, and biotechnologies. As such, it is a good vehicle to mobilise, in a coordinated and synergetic manner, Union resources towards defence, including key digital frontier technologies required for the development of defence products and technologies.

(3)While support to technologies having defence implications is possible today under the 3 existing strategic sectors identified in STEP, it appears necessary to increase the potentialities of development of research, industry and innovation in the defence area by setting out a fourth strategic sector in STEP focussed on defence technologies. This new strategic sector should ensure that the STEP incentives are used to increase Union funding in defence technologies and contribute to European competitiveness in line with STEP objectives. Defence technologies should be understood as those referred to in the Annex to Directive 2009/43/EC and include, in particular, technologies in the areas identified by the European Council on March 6th 2025, namely: air and missile defence, artillery systems, including deep precision strike capabilities, missiles and ammunition, drones and anti-drone systems, strategic enablers, including in relation to space and critical infrastructure protection, military mobility, cyber, artificial intelligence and electronic warfare. As regards artificial intelligence, AI Gigafactories should become key infrastructures to expand rapidly the power of AI in defence technologies.

(4)In addition, in order to optimise the capacity of the programmes covered by STEP to mobilize Union’s resources towards defence, it is necessary to clarify that these programmes can pursue objectives and activities that are related to improving the competitiveness of the European Defence Technological and Industrial basis (EDTIB) as well as research and development activities in the defence field.

(5)Horizon Europe established by Regulation (EU) 2021/695 of the European Parliament and of the Council 5 is the Union’s key funding programme for research and innovation. The European Innovation Council (EIC) Accelerator established by that Regulation provides support, in particular, for innovations with breakthrough potential and of a disruptive nature with scale-up potential that may be too risky for private investors. SMEs operating within the defence sector require financing for the commercialization of innovative products. However, these companies face higher barriers to access finance compared to SMEs in other sectors. Whereas the support to defence research and development is done through the European Defence Fund (EDF), which is a specific programme of Horizon Europe, it is appropriate to open the EIC Accelerator for actions with potential dual-use applications. Support to scale-up under the EIC Accelerator should also be extended to non-bankable SMEs, including start-ups and non-bankable small mid-caps, including entities which have already received support from the Accelerator carrying out breakthrough and disruptive non-bankable innovation with a focus on defence applications. This justifies a targeted exception to the principle set out in Article 7(1) of Regulation (EU) 2021/695 of the European Parliament and of the Council according to which research and innovation activities under Horizon Europe have an exclusive focus on civil applications while not undermining the objective of ensuring unnecessary duplications.

(6)Moreover, to ensure that appropriate resources are directed to the funding of dual use and defence projects under Horizon Europe it is appropriate to derogate to Article 212(3) of the Financial Regulation in order to ensure that repayments, including reimbursed advances, revenues and unused amounts net of fees and costs of EIC blended finance investment component of the EIC pilot under Horizon 2020 are not directed to the Union budget but reinvested in the EIC Fund in order to finance additional projects in dual use and defence benefitting from the amended scope . The timeframe set out in Article 212(3) of the Financial Regulation should also be adapted, by inserting a derogation, to allow for that possibility.

(7)The European Defence Fund (EDF) set out in Regulation (EU) 2021/697 of the European Parliament and of the Council 6 , is the leading programme for enhancing the competitiveness, innovation, efficiency and technological autonomy of the Union’s defence industry. The EDF also aims at supporting actions that are conducive to developing disruptive technologies for defence. In order to better address the specificities of such actions, such as their small scale or their need for a quick support, it is appropriate to simplify the procedures to decide on the support of these actions while in the same time framing the conditions for the decision on such a support in the work programme. .

(8)It is also necessary to exploit synergies between EDF and other Union programmes. To that purpose, it should be possible for Member States, European Union institutions, bodies and agencies, third countries, international financial institutions or other third parties to provide voluntary contributions to the Programme, as external assigned revenues. Voluntary transfers of resources allocated to Member States in shared management to the EDF and the combination of contributions from EDF with other Union programmes for specific actions should be possible, provided that the cumulative Union support does not exceed the total eligible costs of the action.

(9)The Digital Europe Programme (DEP) established by Regulation (EU) 2021/694 of the European Parliament and of the Council 7 aims to support and accelerate the digital transformation of the European economy, industry and society and to improve the competitiveness of Europe in the global digital economy. In this context, the programme should also aim at supporting, in particular, projects, services and competences with potential dual-use application under all its specific objectives. 

(10)To enhance technological sovereignty and competitiveness, the Union needs the computing, cloud and data infrastructures that AI leadership requires. As part of the AI Continent strategy, the AI factories and Gigafactories are essential for the Union to be able to compete on the global level and ensure its strategic autonomy and competitiveness in science, dual use research and in critical industrial sectors, including the defence industry. Such next-generation models require extensive connected computing infrastructure for breakthroughs in specific domains including defence. It is therefore appropriate to add, in the Specific Objective 1 – High Performance Computing of DEP, a supplementary operational objective dedicated to the deployment and operation of AI Factories and new generation of IA Gigafactories specialised in developing, training, and running the most complex, very large, AI models and applications, including hardware and software necessary for such deployment.

(11)In the specific Objective 5 of DEP – Deployment and Best Use of Digital Capacity and interoperability, it is also necessary to add, in the operational objective defined to support the public sector and areas of public interest, a reference to defence in order to clarify that the financial contribution of the Union under such an Objective can be extended to that sector.

(12)It is also necessary to adapt the eligibility rules that might be set out in the work programme of DEP so that it is possible to provide that legal entities established in associated countries and legal entities that are established in the Union but are controlled from third countries are not eligible to participate in all or some actions focused on technologies with dual-use potential under any specific objective. In such cases, calls for proposals and calls for tenders should be restricted to legal entities established or deemed to be established in Member States and controlled by Member States or by nationals of Member States.

(13)Regulation (EU) 2023/1525 of the European Parliament and of the Council supporting ammunition production (ASAP) 8  was adopted to financially support the urgent strengthening of the EDTIB responsiveness and ability to ensure the timely availability and supply of ground-to-ground and artillery ammunition as well as missiles. Voluntary transfers of resources allocated to Member States in shared management to the ASAP instrument as well as additional voluntary contributions from Member States or other relevant stakeholders should contribute to pursue the support to ramping up the Union’s manufacturing capacities beyond 30 June 2025. Regulation (EU) 2023/1525 should therefore be amended to introduce such a possibility. Since that Regulation has shown is usefulness to develop new production capacities of powder/propellant, explosives, shells, testing capacity, and missiles all across the Union, it is appropriate to ensure that its application is extended until 31 December 2026.

(14)The Connecting Europe Facility (CEF) set out in Regulation (EU) 2021/1153 of the European Parliament and of the Council, 9  aims to accelerate investment in the field of trans-European networks, enabling synergies between the transport, energy and digital sectors. In order to support the connected computing infrastructure required by defence products and technologies and beyond these areas, the objectives of the CEF digital sector within that Regulation should be extended to the deployment and provision of digital capacities such as cloud, AI and AI Gigafactories.

(15)Military mobility is also one of the objectives of the CEF programme. The Joint White Paper for European Defence Readiness 2030 recognised military mobility as an essential enabler for European security and defence and stressed the Union added-value in supporting dual-use infrastructure for mobility. The mid-term review of the European Regional Development Fund (ERDF) and the Cohesion Fund both established by Regulation (EU) 2021/1058 of the European Parliament and of the Council 10  introduced the possibility to invest in defence or dual use infrastructure to foster military mobility benefiting from a pre-financing of 30% of the amounts programmed and the possibility to apply a Union financing of up to 100%. In cases where Member States transfer resources allocated to them in shared management to CEF they should benefit from the same conditions on pre-financing and co-financing for dual-use transport infrastructure projects as introduced in the ERDF and Cohesion Fund. In such a case, these amounts should be reserved to projects developing the Military Mobility corridors as identified by the Member States in Military Requirements for Military Mobility within and beyond the Union as well as digital connectivity and capacities..

(16)Regulations (EU) 2021/694, (EU) 2021/695, (EU) 2021/697, (EU) 2021/1153, (EU) 2023/1525 and (EU) 2024/795 should therefore be amended accordingly. 

(17)Given the urgent need to enable crucial investments in defence in the context of pressing geopolitical challenges, this Regulation should enter into force on the day following that of its publication in the Official Journal of the European Union.

(18)Since the objective of this Regulation, namely to strengthen research and development activities in dual use and defence, improve the competitiveness of the Union’s defence industry and therefore contribute to the Union’s defence by refocusing investments of these critical priorities, cannot be sufficiently achieved by the Member States, but can rather be better achieved at Union level, the Union may adopt measures in accordance with the principle of subsidiarity as set out in Article 5 TEU. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary to achieve those objectives,

HAVE ADOPTED THIS REGULATION:

Article 1

Regulation (EU) 2021/694 [Digital Europe Programme] is amended as follows:

(1)in Article 3 (1), second subparagraph, the following point is added:

‘(c) support dual-use projects, services, competences and applications.’;

(2)in Article 4 (1) the following point is added:

‘(d) deploy and operate AI Factories and new generation AI Gigafactories specialised in developing, training, and running the most complex, very large, AI models and applications, including hardware and software necessary for such deployment.’;

(3)in Article 8 (1), point (a) is replaced by the following:

‘(a) support the public sector and areas of public interest, such as health and care, education, judiciary, customs, defence, transport, mobility, energy, environment, cultural and creative sectors, including relevant businesses established within the Union, to effectively deploy and access state-of-the-art digital technologies, such as HPC, quantum, AI and cybersecurity;’;

(4)in Article 12, paragraph 5 is replaced by the following:

‘5. The work programme may also provide that legal entities established in associated countries and legal entities that are established in the Union but are controlled from third countries are not eligible to participate in all or some actions under Specific Objective 3 for duly justified security reasons, and in actions focused on technologies with dual-use potential under any specific objective. In such cases, calls for proposals and calls for tenders shall be restricted to legal entities established or deemed to be established in Member States and controlled by Member States or by nationals of Member States. Such restrictions may be applied to access to the capacities deployed under such calls.’

Article 2

Regulation (EU) 2021/695 [Horizon Europe] is amended as follows:

(1)In Article 46, the following paragraph 4a is inserted:

‘4a. By derogation from Article 212(3) of the Financial Regulation, repayments including reimbursed advances, revenues and unused amounts net of fees and costs of EIC blended finance of the EIC pilot under Horizon 2020 shall be considered to be internal assigned revenues in accordance with Article 21(3), point (f) and Article 21(4) and (5) of the Financial Regulation and the time restriction of two years set out in the second subparagraph of Article 212(3) of the Financial Regulation shall apply as from [date of entry into force of this Regulation].’

(2)Article 48(1), second subparagraph is amended as follows:

(a) in point (a), the following sentence is added:

‘As an exception to Article 7(1), such support may include potential dual-use applications.’;

(b)in point (b) the following sentence is added:

‘As an exception to Article 7(1), such support may include potential dual-use applications.’;

(c) in point (c), the following sentence is added:

‘As an exception to Article 7(1), such support may include potential dual-use applications.’;

(d)in point (d), the following sentence is added:

‘As an exception to Article 7(1), such support may include innovation in critical technologies with focus on defence applications.’;

Article 3

Regulation (EU) 2021/697 [European Defence Fund] is amended as follows:

(1)Article 6 is replaced by the following:

‘Article 6

Support for disruptive technologies for defence

1.The Commission shall support actions that are conducive to developing disruptive technologies for defence in the areas of intervention defined in the work programmes referred to in Article 24.

2.The work programmes shall lay down the most appropriate forms of funding, selection and award criteria and procedures, and implementation for disruptive technologies for defence.’;

(2)the following Article is inserted:

‘Article 8a

Cumulative funding and transfers of resources

1.An action that has received a contribution from another Union programme may also receive a contribution under the Programme, provided that the contributions do not cover the same costs. The rules of the relevant Union programme shall apply to the corresponding contribution to the action. The support from the different Union programmes may be calculated on a pro-rata basis in accordance with the documents setting out the conditions for support.

2.Resources allocated to Member States under shared management may, at the request of the Member State concerned, be transferred to the Programme subject to the conditions set out in the relevant provisions of Regulation (EU) 2021/1060 for 2021-2027. The Commission shall implement those resources directly in accordance with point (a) of the first subparagraph of Article 62(1) of the Financial Regulation or indirectly in accordance with point (c) of that subparagraph. Such resources shall be used for the benefit of the Member State concerned.

Resources transferred in accordance to paragraph 2 of this Article may, by derogation from Article 13(2) of this Regulation, be used for the purpose of contributing to the funding of eligible actions under Article 10 of this Regulation up to 100 % of the eligible costs.

3.Where the Commission has not entered into a legal commitment under direct or indirect management for resources transferred in accordance with paragraph 3 and at the latest by 30 September 2027, the corresponding uncommitted resources may be transferred back to one or more respective source programmes, at the request of the Member State concerned, in accordance with the conditions set out in the relevant provisions of Regulation (EU) 2021/1060.

4.Member States, European Union institutions, bodies and agencies, third countries, international organisations, international financial institutions or other third parties, may provide additional financial contributions to the Programme. Such financial contributions shall constitute external assigned revenue within the meaning of Article 21(2), points (a), (d), or (e) or Article 21(5) of the Financial Regulation.’;

Article 4

Regulation (EU) 2021/1153 [Connecting Europe Facility]is amended as follows:

(1)Article 3(2) is amended as follows:

(c) point (c) is replaced by the following:

‘(c ) in the digital sector: to contribute to the development of projects of common interest relating to the deployment of and access to safe and secure very high capacity networks, including 5G systems, to the set-up and deployment of digital capacities such as cloud, AI and AI Gigafactories, to the increased resilience and capacity of digital backbone networks on Union territories by linking them to neighbouring territories, as well as to the digitalisation of transport and energy networks.’;

(2)in Article 8(4), the following point (f) is added:

‘(f) projects of common interest contributing to the set-up and deployment or significant upgrade of digital capacities, including cloud, AI and AI Gigafactories shall be prioritized according to the extent they significantly contribute to improve the performance, resilience and security of transport, energy and digital infrastructures that are critical for the implementation of the internal market.’;

(3)in Article 9(4), the following point (f) is added:

‘(f) actions supporting the set-up and deployment of digital capacities in cloud, AI and AI Gigafactories.’;

(4)in Article 15 (2), the following point (ba) is added:

‘(ba) Subject to the transfer of the necessary resources to the CEF in the context of the mid-term review of programmes supported by the European Regional Development Fund and Cohesion Fund [add legal reference to Regulation adopted pursuant to COM(2025)123, 2025/0084 (COD)], pursuant to Article 4(13), for works relating to the specific objectives referred to in Article 3(2), point (a)(ii), the following conditions apply:

(i)co-financing rates may be increased to a maximum of 100%;

(ii)actions are entitled to a pre-financing payment representing at least 30% of the amount allocated in the grant agreement;

(iii)actions shall be located on one or more of the four EU Priority Military Mobility Corridors identified by Member States in Annex II to the Military Requirements for Military Mobility within and beyond the Union, as adopted by the Council on [18 March 2025 and with reference ST 6728/25 ADD1] and shall comply with the infrastructure requirements as set out in Commission Implementing Regulation (EU) 2021/1328.

Article 5

Regulation (EU) 2023/1525 [ASAP] is amended as follows:

(1)in Article 6, the following paragraphs are inserted:

‘3a. Member States, Union institutions, bodies and agencies, third countries, international organisations, international financial institutions or other third parties, may provide additional financial contributions to the Instrument. Such financial contributions shall constitute external assigned revenue within the meaning of Article 21(2), points (a), (d) or (e), or Article 21(5) of the Financial Regulation.

3b. Resources allocated to Member States under shared management may, at the request of the Member States concerned, be transferred to the Instrument subject to the conditions set out in the relevant provisions of Regulation (EU) 2021/1060. The Commission shall implement those resources directly in accordance with Article 62(1), first subparagraph, point (a), of the Financial Regulation or indirectly in accordance with point (c) of that subparagraph. Such resources shall be used for the benefit of the Member State concerned.

3c. Resources transferred in accordance to paragraph 3b of this Article may, by derogation from Article 19c(6) of this Regulation, be used for the purpose of contributing to the funding of eligible actions under Article 13 of this Regulation up to 100 % of the eligible costs.

3d. Where the Commission has not entered into a legal commitment under direct or indirect management for resources transferred in accordance with paragraph 3 and at the latest by 30 September 2027, the corresponding uncommitted resources may be transferred back to one or more respective source programmes, at the request of the Member State concerned, in accordance with the conditions set out in the relevant provisions of Regulation (EU) 2021/1060.’

(2)in Article 24, the second paragraph is replaced by the following:

‘This Regulation shall apply until 31 December 2026. That shall not affect the continuation or modification of actions initiated pursuant to this Regulation or any actions necessary to protect the financial interests of the Union.’

Article 6

In Article 2(1), point (a) of Regulation (EU) 2024/795, [Strategic Technologies for Europe Platform (STEP)] the following point is added:

‘(iv)    defence technologies;’

Article 7

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in the Member States in accordance with the Treaties.

Done at Brussels,

LEGISLATIVE FINANCIAL AND DIGITAL STATEMENT

1.    FRAMEWORK OF THE PROPOSAL/INITIATIVE    3

1.1.    Title of the proposal/initiative    3

1.2.    Policy area(s) concerned    3

1.3.    Objective(s)    3

1.3.1.    General objective(s)    3

1.3.2.    Specific objective(s)    3

1.3.3.    Expected result(s) and impact    3

1.3.4.    Indicators of performance    3

1.4.    The proposal/initiative relates to:    4

1.5.    Grounds for the proposal/initiative    4

1.5.1.    Requirement(s) to be met in the short or long term including a detailed timeline for roll-out of the implementation of the initiative    4

1.5.2.    Added value of EU involvement (it may result from different factors, e.g. coordination gains, legal certainty, greater effectiveness or complementarities). For the purposes of this section 'added value of EU involvement' is the value resulting from EU action, that is additional to the value that would have been otherwise created by Member States alone.    4

1.5.3.    Lessons learned from similar experiences in the past    4

1.5.4.    Compatibility with the multiannual financial framework and possible synergies with other appropriate instruments    5

1.5.5.    Assessment of the different available financing options, including scope for redeployment    5

1.6.    Duration of the proposal/initiative and of its financial impact    6

1.7.    Method(s) of budget implementation planned    6

2.    MANAGEMENT MEASURES    8

2.1.    Monitoring and reporting rules    8

2.2.    Management and control system(s)    8

2.2.1.    Justification of the budget implementation method(s), the funding implementation mechanism(s), the payment modalities and the control strategy proposed    8

2.2.2.    Information concerning the risks identified and the internal control system(s) set up to mitigate them    8

2.2.3.    Estimation and justification of the cost-effectiveness of the controls (ratio between the control costs and the value of the related funds managed), and assessment of the expected levels of risk of error (at payment & at closure)    8

2.3.    Measures to prevent fraud and irregularities    9

3.    ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE    10

3.1.    Heading(s) of the multiannual financial framework and expenditure budget line(s) affected    10

3.2.    Estimated financial impact of the proposal on appropriations    12

3.2.1.    Summary of estimated impact on operational appropriations    12

3.2.1.1.    Appropriations from voted budget    12

3.2.1.2.    Appropriations from external assigned revenues    17

3.2.2.    Estimated output funded from operational appropriations    22

3.2.3.    Summary of estimated impact on administrative appropriations    24

3.2.3.1. Appropriations from voted budget    24

3.2.3.2.    Appropriations from external assigned revenues    24

3.2.3.3.    Total appropriations    24

3.2.4.    Estimated requirements of human resources    25

3.2.4.1.    Financed from voted budget    25

3.2.4.2.    Financed from external assigned revenues    26

3.2.4.3.    Total requirements of human resources    26

3.2.5.    Overview of estimated impact on digital technology-related investments    28

3.2.6.    Compatibility with the current multiannual financial framework    28

3.2.7.    Third-party contributions    28

3.3.    Estimated impact on revenue    29

4.    Digital dimensions    29

4.1.    Requirements of digital relevance    30

4.2.    Data    30

4.3.    Digital solutions    31

4.4.    Interoperability assessment    31

4.5.    Measures to support digital implementation    32

1.    FRAMEWORK OF THE PROPOSAL/INITIATIVE

1.1.    Title of the proposal/initiative

1.2.    Policy area(s) concerned 

1.3.    Objective(s)

1.3.1.    General objective(s)

1.3.2.    Specific objective(s)

1.3.3.    Expected result(s) and impact

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.

1.3.4.    Indicators of performance

Specify the indicators for monitoring progress and achievements.

1.4.    The proposal/initiative relates to: 

 a new action 

 a new action following a pilot project / preparatory action 11  

 the extension of an existing action 

 a merger or redirection of one or more actions towards another/a new action

1.5.    Grounds for the proposal/initiative 

1.5.1.    Requirement(s) to be met in the short or long term including a detailed timeline for roll-out of the implementation of the initiative

1.5.2.    Added value of EU involvement (it may result from different factors, e.g. coordination gains, legal certainty, greater effectiveness or complementarities). For the purposes of this section 'added value of EU involvement' is the value resulting from EU action, that is additional to the value that would have been otherwise created by Member States alone.

1.5.3.    Lessons learned from similar experiences in the past

1.5.4.    Compatibility with the multiannual financial framework and possible synergies with other appropriate instruments

1.5.5.    Assessment of the different available financing options, including scope for redeployment

1.6.    Duration of the proposal/initiative and of its financial impact

limited duration

– in effect from 04/2025 to 31/12/2028

– Financial impact from 2025 to 2027 for commitment appropriations and from 2025 to 2030 for payment appropriations.

 unlimited duration

–Implementation with a start-up period from YYYY to YYYY

–followed by full-scale operation.

1.7.    Method(s) of budget implementation planned 12  

 Direct management by the Commission

– by its departments, including by its staff in the Union delegations;

– by the executive agencies

 Shared management with the Member States

 Indirect management by entrusting budget implementation tasks to:

– third countries or the bodies they have designated

– international organisations and their agencies (to be specified)

– the European Investment Bank and the European Investment Fund

– bodies referred to in Articles 70 and 71 of the Financial Regulation

– public law bodies

– bodies governed by private law with a public service mission to the extent that they are provided with adequate financial guarantees

– bodies governed by the private law of a Member State that are entrusted with the implementation of a public-private partnership and that are provided with adequate financial guarantees

– bodies or persons entrusted with the implementation of specific actions in the common foreign and security policy pursuant to Title V of the Treaty on European Union, and identified in the relevant basic act

–bodies established in a Member State, governed by the private law of a Member State or Union law and eligible to be entrusted, in accordance with sector-specific rules, with the implementation of Union funds or budgetary guarantees, to the extent that such bodies are controlled by public law bodies or by bodies governed by private law with a public service mission, and are provided with adequate financial guarantees in the form of joint and several liability by the controlling bodies or equivalent financial guarantees and which may be, for each action, limited to the maximum amount of the Union support.

Comments

2.    MANAGEMENT MEASURES 

2.1.    Monitoring and reporting rules 

2.2.    Management and control system(s) 

2.2.1.    Justification of the budget implementation method(s), the funding implementation mechanism(s), the payment modalities and the control strategy proposed

2.2.2.    Information concerning the risks identified and the internal control system(s) set up to mitigate them

2.2.3.    Estimation and justification of the cost-effectiveness of the controls (ratio between the control costs and the value of the related funds managed), and assessment of the expected levels of risk of error (at payment & at closure) 

2.3.    Measures to prevent fraud and irregularities 

3.    ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE 

3.1.    Heading(s) of the multiannual financial framework and expenditure budget line(s) affected 

·Existing budget lines

In order of multiannual financial framework headings and budget lines.

3.2.    Estimated financial impact of the proposal on appropriations 

3.2.1.    Summary of estimated impact on operational appropriations 

–    The proposal/initiative does not require the use of operational appropriations

–    The proposal/initiative requires the use of operational appropriations, as explained below

3.2.1.1.    Appropriations from voted budget

EUR million (to three decimal places)

EUR million (to three decimal places)

EUR million (to three decimal places)

EUR million (to three decimal places)

3.2.3.    Summary of estimated impact on administrative appropriations 

–    The proposal/initiative does not require the use of appropriations of an administrative nature

–    The proposal/initiative requires the use of appropriations of an administrative nature, as explained below

3.2.3.1. Appropriations from voted budget

3.2.4.    Estimated requirements of human resources

–    The proposal/initiative does not require the use of human resources

–The proposal/initiative requires the use of human resources, as explained below

3.2.5.    Overview of estimated impact on digital technology-related investments

Compulsory: the best estimate of the digital technology-related investments entailed by the proposal/initiative should be included in the table below.

Exceptionally, when required for the implementation of the proposal/initiative, the appropriations under Heading 7 should be presented in the designated line.

The appropriations under Headings 1-6 should be reflected as “Policy IT expenditure on operational programmes”. This expenditure refers to the operational budget to be used to re-use/ buy/ develop IT platforms/ tools directly linked to the implementation of the initiative and their associated investments (e.g. licences, studies, data storage etc). The information provided in this table should be consistent with details presented under Section 4 “Digital dimensions”.

3.2.6.    Compatibility with the current multiannual financial framework 

The proposal/initiative:

–    can be fully financed through redeployment within the relevant heading of the multiannual financial framework (MFF)

3.2.7.    Third-party contributions 

The proposal/initiative:

    does not provide for co-financing by third parties.
3.3.    Estimated impact on revenue 

–    The proposal/initiative has no financial impact on revenue.

–    The proposal/initiative has the following financial impact:

–    on own resources

–    on other revenue

–    please indicate, if the revenue is assigned to expenditure lines

EUR million (to three decimal places)

–For assigned revenue, specify the budget expenditure line(s) affected.

–4.    Digital dimensions

4.1.    Requirements of digital relevance

(1)    The STEP Seal is the Sovereignty Seal defined in Regulation (EU) 2024/795

(2)    OJ C , , p. .

(3)    OJ C , , p. .

(4)    Regulation (EU) 2024/795 of the European Parliament and of the Council of 29 February 2024 establishing the Strategic Technologies for Europe Platform (STEP), and amending Directive 2003/87/EC and Regulations (EU) 2021/1058, (EU) 2021/1056, (EU) 2021/1057, (EU) No 1303/2013, (EU) No 223/2014, (EU) 2021/1060, (EU) 2021/523, (EU) 2021/695, (EU) 2021/697 and (EU) 2021/241 (OJ L, 2024/795, 29.2.2024, ELI: http://data.europa.eu/eli/reg/2024/795/oj )

(5)    Regulation (EU) 2021/695 of the European Parliament and of the Council of 28 April 2021 establishing Horizon Europe – the Framework Programme for Research and Innovation, laying down its rules for participation and dissemination, and repealing Regulations (EU) No 1290/2013 and (EU) No 1291/2013 (OJ L 170 12.5.2021, p. 1, ELI:  http://data.europa.eu/eli/reg/2021/695/2024-03-01 )

(6)    Regulation (EU) 2021/697 of the European Parliament and of the Council of 29 April 2021 establishing the European Defence Fund and repealing Regulation (EU) 2018/1092 (OJ L 170 12.5.2021, p. 149, ELI:  http://data.europa.eu/eli/reg/2021/697/2024-03-01 ).

(7)    Regulation (EU) 2021/694 of the European Parliament and of the Council of 29 April 2021 establishing the Digital Europe Programme and repealing Decision (EU) 2015/2240 (OJ L 166 11.5.2021, p. 1, ELI:  http://data.europa.eu/eli/reg/2021/694/2023-09-21 )

(8)    Regulation (EU) 2023/1525 of the European Parliament and of the Council of 20 July 2023 on supporting ammunition production (ASAP) (OJ L 185, 24.7.2023, p. 7–25, ELI:  http://data.europa.eu/eli/reg/2023/1525/oj )

(9)    Regulation (EU) 2021/1153 of the European Parliament and of the Council of 7 July 2021 establishing the Connecting Europe Facility and repealing Regulations (EU) No 1316/2013 and (EU) No 283/2014 (OJ L 249 14.7.2021, p. 38, ELI:  http://data.europa.eu/eli/reg/2021/1153/2024-07-18 )

(10)    Regulation (EU) 2021/1058 of the European Parliament and of the Council of 24 June 2021 on the European Regional Development Fund and on the Cohesion Fund (OJ L 231 30.6.2021, p. 60, ELI:  http://data.europa.eu/eli/reg/2021/1058/2024-12-24 )

(11)    As referred to in Article 58(2), point (a) or (b) of the Financial Regulation.

(12)    Details of budget implementation methods and references to the Financial Regulation may be found on the BUDGpedia site: https://myintracomm.ec.europa.eu/corp/budget/financial-rules/budget-implementation/Pages/implementation-methods.aspx .

(13)    Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations.

(14)    EFTA: European Free Trade Association.

(15)    Candidate countries and, where applicable, potential candidates from the Western Balkans.

(16)    Technical and/or administrative assistance and expenditure are not detailed but included in the overall amounts indicated under operational lines. They should roughly correspond to the same percentages compared to administrative lines as the one occurred in the 2021-2024 period.

(17)    Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research.

(18)    The necessary appropriations should be determined using the annual average cost figures available on the appropriate BUDGpedia webpage.

(19)    The necessary appropriations should be determined using the annual average cost figures available on the appropriate BUDGpedia webpage.

(20)    As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net amounts, i.e. gross amounts after deduction of 20% for collection costs.