Defence and space

What this area covers

Capability programmes and the money behind them, the primes and the suppliers underneath them, launch and the ground segment, secure connectivity, and joint procurement across member states.

Space sits here rather than under infrastructure because in Europe the strategic space programmes are defence programmes with civil users attached.

Why ESA is read as a third party

One boundary is worth stating before anything else. The European Space Agency is not an EU body. It is an intergovernmental organisation with 23 members including Norway, Switzerland and the United Kingdom, funded by those members, and the EU pays it to run specific programmes such as Galileo and parts of Copernicus.

ESA documents are read here as third-party sources, not as EU primary sources. In this subject that distinction matters more than it sounds.

The instruments

This is the one area where European content is a binding condition rather than an aspiration.

SAFE and EDIP

SAFE, Council Regulation (EU) 2025/1106, lends €150bn against a hard rule at Article 16(10): the cost of components originating outside the Union, the EEA EFTA States and Ukraine may not exceed 35% of the estimated cost of the components of the end product. Read the other way round, it is a 65% European floor by cost.

EDIP, Regulation (EU) 2025/2643, carries the same ceiling at Recital 27. Both also require recipients to be established and to have their executive management in the Union, in associated countries or in Ukraine, and not to be under the control of a non-associated third country.

AGILE

AGILE reached political agreement on 15 July 2026 and is expected to run from 1 January 2027. It is small at €115m and carries the same delivery restriction.

The budget is not the interesting part. The restriction is, because AGILE is aimed at startups and SMEs rather than at incumbents, and it is shaping the market those firms will sell into.

The recurring shape

Money with a content rule attached reaches European suppliers. That is the whole finding, and it is why this area ran ▲ 6 ▼ 1 in issue.zero while policy and law ran net minus one.

What moved

IRIS² moved from agreement to signed implementation, expanded to 348 satellites with a dedicated defence, security and emergency layer, and pulled forward to 2029, with Poland putting €656m of its own budget in alongside Hungary and Spain.

SAFE money actually moved, Greece drawing €118.2m after Poland drew €6.6bn in May. The Commission proposed the first five European Defence Projects of Common Interest.

The EU and Ukraine launched a drone alliance with nine companies from each side, in the one category where European primes are furthest behind and Ukrainian firms are furthest ahead.

The counterweight

What happens when the requirement is urgent and no European product exists: NATO's procurement agency awarded Raytheon a Patriot interceptor contract for Poland in the same month.

The limit of the rule itself

It is not small. Article 16(10) turns on the cost share of components, and the Regulation nowhere defines what a component is. A boundary that decides whether a purchase qualifies is left to be drawn in the contract.