EU Approval of Common Defense Projects and Ukraine's Participation: Institutionalizing European Strategic Autonomy and South Korea's Response
Executive Summary
On September 28, the Council of the European Union approved joint projects in five priority areas—including drones/anti-drones, maritime defense, space, and air defense—and allocated €1.5 billion from the European Defence Industry Programme (EDIP) fund. Amid the dual pressures of declining trust in the US security commitment and intergovernmental fragmentation, this signal marks the EU's shift from individual national budgeting toward bloc-level joint procurement. The structure in which Ukraine participates in most projects, such as DECODER and IMSD, elevates Ukraine from a mere recipient of aid to a partner in the European defense industrial ecosystem, aligning with the bilateral cooperation of the UK and Finland. While the EU's 'buy European' preference restricts the South Korean defense industry's direct participation at the EU institutional level, procurement by individual member states like Poland and the Baltic states, along with cooperation on Ukraine's combat data, remain viable pathways. Rather than waiting for a single EU window, South Korea should adopt a two-track strategy that combines engagement at the individual state or consortium level with bilateral cooperation with Ukraine.
I. Situation Analysis
EU Approval of Common Defense Projects and Ukraine's Participation: Situation Analysis
1. Background and Progress
In July, the European Commission proposed a joint investment plan to fill capability gaps in five areas: air defense, maritime security, space, drones/anti-drones, and eastern flank security [1]. This proposal stemmed from the recognition that individual member states increasing their respective defense budgets would struggle to overcome duplicative spending and fragmented procurement structures. In a system of 27 member states, defense policy remains a domain dominated by the principle of intergovernmentalism. A previous EAI report on European defense industry trends pointed out that "while the political integration of the EU and NATO remains at a rhetorical level, a structure where cooperation at the individual state and corporate levels takes precedence is highly likely to persist in the future" [3]. The approval of these five projects should be viewed as an attempt to place an institutional brake on this fragmented structure.
Two pressures acted simultaneously in the background. One is the defense burden-sharing pressure from the Trump administration. EAI's internal analysis had already diagnosed that NATO has entered a transitional phase, shifting from a US-centric single axis to a US-Europe dual-axis system [3]. The other is the spread of the drone warfare paradigm proven on the Ukrainian battlefield. The lesson that conventional forces alone cannot deliver decisive results has spread to defense startup ecosystems across Europe, including the Baltic states [3]. As these two trends converged, the EU pivoted toward building a bloc-level joint procurement system rather than merely strengthening individual national capabilities.
2. Current Situation
On September 28, the Council of the EU gave final approval to projects in five priority areas, including DECODER (drone and anti-drone systems) and IMSD (integrated maritime defense system) [1][4]. These projects became eligible for funding through the €1.5 billion European Defence Industry Programme (EDIP) [4]. The Austrian media outlet Die Presse described DECODER as a program supporting member states in deploying, operating, and countering drones, and IMSD as an integrated defense system addressing threats on the high seas and seabed [6]. The remaining three projects were allocated to space, eastern flank protection, and air and missile defense [1][4].
The Kyiv Independent highlighted in its headline that Ukraine would participate in "most of the projects" [1]. This indicates that Ukrainian local media view this decision not merely as an internal EU defense industry adjustment, but as an issue directly linked to their country's path toward EU integration. Indeed, around the same time, the EU finalized financial support related to Ukraine. On September 23, EU ambassadors confirmed that Ukraine had completed ten reforms, proceeding with the disbursement of €3 billion under the Ukraine Facility [9][15]. On September 25, €6.6 billion from the European Peace Facility (EPF), which had been blocked for three years due to Hungary's opposition, was finally released [8][13][14]. The concentration of joint defense investments, reform-linked financial support, and the release of military aid funds in the same week is no coincidence; it reflects the EU's broader shift toward transitioning Ukraine from a 'recipient of aid' to a 'partner in the defense industrial ecosystem.'
This trend is also evident at the bilateral level. On September 23 in New York, President Zelenskyy and Finnish President Stubb signed a drone deal for the co-production of defense materiel [10]. Finnish Prime Minister Orpo stated, "Ukraine has developed its defense capabilities and defense industry, and Finland has things to learn" [10]. The UK also opened up Ukrainian battlefield data to up to 12 British companies to develop AI drone swarm models [11]. There is a clear pattern of Ukraine's combat data and production know-how diffusing into the defense ecosystems of the EU and neighboring countries.
However, it is also necessary to recognize that procurement cooperation within the EU is not entirely smooth. Another EAI analysis pointed out that during the informal meeting of EU defense ministers held around the same time, no progress was made on supporting Ukraine's air defense network, particularly regarding the acquisition of Patriot systems [5]. High Representative Kallas acknowledged that increased defense investment does not immediately translate into results, and member states were reluctant to release interceptors, citing their own national security [5]. This presents a dual reality where institutional progress, represented by the approval of the five priority projects, coexists with stagnation in the actual allocation of military assets.
3. Key Actor Analysis
The Council of the EU and the European Commissionare the institutional architects of this initiative. The five areas proposed by the Commission in July focus on high-cost, high-tech domains where individual national budgets struggle to achieve economies of scale—namely, drone interceptor systems, seabed infrastructure defense, and space assets [1][4]. While the €1.5 billion EDIP fund is modest in size, it carries symbolic weight by establishing a precedent for the EU directly injecting financial resources into defense procurement.
Ukraineis positioning itself not as a mere beneficiary but as a technology provider in this framework. Its participation in most of the projects, the drone co-production agreement with Finland, and the opening of battlefield data to the UK all demonstrate that Ukraine is serving as a conduit for injecting combat-proven drone and anti-drone expertise into the European defense ecosystem [1][10][11]. For the Ukrainian government, this represents a de facto industrial integration path running parallel to EU accession negotiations, as well as a security linkage channel that can endure even after the war ends.
Individual Member Stateshave heterogeneous interests. While even traditionally neutral countries like Ireland are shifting toward expanding defense investment [5], this coexists with the self-prioritizing attitudes of member states reluctant to release interceptor stockpiles [5]. Having blocked the release of EPF funds for three years [13][14], Hungary remains a variable that could re-emerge as a veto player at any time regarding Ukraine-related budgets and defense industrial cooperation.
The United Statesis not a direct actor but provides the background conditions for this decision. The Trump administration's pressure on defense burden-sharing and the depletion of US Patriot stockpiles in Europe due to the conflict involving Iran [5] are exogenous factors that have compelled the EU to accelerate securing its own air defense and interception capabilities.
4. Key Issues
The core issue of this initiative is the gap between institutional approval and actual implementation. While designating the five priority areas and linking them to the EDIP fund represent clear progress, the stagnation in acquiring Patriot systems during the same period [5] shows that joint procurement systems cannot resolve the political obstacles to actual asset allocation. Another issue is Ukraine's status. The structure in which Ukraine, a non-member state, participates in most of the projects [1] suggests that EU defense industrial integration is expanding beyond member state borders; however, how this will be institutionally linked to Ukraine's EU accession negotiations or security guarantee discussions remains unclear. Finally, the 'buy European' preference remains a point that simultaneously presents market access opportunities and constraints for non-EU defense firms, particularly South Korean companies that have built a strong track record in countries like Poland.
II. In-Depth Analysis
EU Approval of Common Defense Projects and Ukraine's Participation: In-Depth Analysis
1. Root Cause Analysis
The primary cause of this approval is the rapid shift in security threat perceptions. As Russia's invasion of Ukraine enters its fourth year, European nations have begun to treat the possibility of a full-scale conventional war as a realistic variable once again. However, the more direct trigger is the declining credibility of the US security commitment. EAI's previous analysis diagnosed that NATO has entered a 'transitional phase from a US-centric single axis to a US-Europe dual axis' [3]. This is not merely rhetorical. In fact, in the wake of the conflict involving Iran, US Patriot stockpiles in Europe reached a state 'beyond critical,' and even High Representative Kallas admitted at the defense ministers' meeting in Ireland that increased defense investment does not guarantee immediate results [5]. As reliance on US assets reached its physical limits, the EU redefined building its own procurement system not as an option, but as an imperative.
The second cause is the inefficiency of the financial structure. Under the current system where 27 member states individually budget for defense, weapon systems with identical functions are frequently developed in duplicate. Defense News explicitly stated that the purpose of these five projects is to 'encourage cooperation in defense spending and prevent duplication within the 27-nation bloc' [4]. This shows that while the EU still treats defense as a matter of sovereignty, it is adopting a dual approach aimed at securing economies of scale through joint procurement at the industrial policy level.
The third cause is the value of Ukraine's combat data. Ukraine is the only European country that has defended against Russian drone and missile attacks in real time for over three years. The UK Ministry of Defence announced measures allowing up to 12 British companies to access Ukraine's combat data to develop AI drone swarm models [11]. Finland also signed a 'drone deal' with Ukraine in New York on September 23 for joint defense production [10]. Finnish Prime Minister Orpo assessed that 'Ukraine has developed its defense capabilities and defense industry to the point where we can learn from them' [10]. Ukraine's participation in EU-level joint projects is an institutional extension of these bilateral trends.
2. Structural Context
Politically, EU defense policy remains constrained by intergovernmentalism. EAI's previous analysis pointed out that 'due to the absence of a common EU procurement system and intergovernmental limitations, the pattern of cooperation taking shape first at the individual state and corporate levels is expected to persist' [5]. What the approval of these five projects symbolizes is a partial bypass of this intergovernmental structure. This is because, through the €1.5 billion EDIP fund, EU-level financial instruments—rather than individual national budgets—have been mobilized for defense industrial investment for the first time [4]. However, this fund size is close to symbolic compared to Europe's total defense spending. The actual binding force depends on how much each member state aligns its own defense budget with these priority areas.
Economically, the booming performance of defense companies supports this trend. According to EAI's analysis, the net profits of major European defense firms such as Indra, Thales, Leonardo, and Hensoldt increased by 25%, and new orders exceeded €83 billion [3]. This industrial foundation provided the EU with the capacity to link joint investment priorities to actual procurement programs. However, the same analysis pointed out that raw material supply chain bottlenecks, such as titanium and rare earths, act as structural constraints on expanding production capacity [3]. Projects with high dependency on electronic components and rare metals, such as drone and anti-drone systems, are highly likely to be significantly affected by these bottlenecks.
In terms of the security architecture, the shift in Ukraine's status is key. Despite being a non-EU member, Ukraine has been placed in a unique position to participate in most of the joint defense industrial projects [1]. This also intertwines with discussions on EU enlargement. In a session hosted by Bruegel, Ukraine's path to EU accession was directly discussed [Deleted Source]. In effect, defense industrial integration is functioning as a channel to incorporate Ukraine into the European security system ahead of political accession negotiations. Simultaneously, the EU streamlined its financial support system for Ukraine. The disbursement of €3 billion under the Ukraine Facility following the confirmation of completed reforms on September 23 [9][15], and the release of €6.6 billion from the European Peace Facility (EPF) bypassing Hungary's opposition on September 25 [8][13][14], both occurred in the same week. The simultaneous alignment of these three tracks—joint defense industrial projects, reform-linked funds, and military aid funds—demonstrates a structural shift in which the EU is redefining Ukraine from an aid recipient to a defense industrial partner. However, internal Ukrainian perspectives on this financial flow are not uniformly positive. The Kyiv Independent reported that Ukrainian experts raised criticisms regarding the EU's €3 billion disbursement proceeding alongside 'anti-reform' measures in the judicial sector [15]. Even as defense industrial cooperation deepens, tensions between the EU and Ukraine over reform implementation persist independently.
3. Historical Precedents and Comparative Cases
Attempts to establish EU-level joint defense industrial funds are not new. Although the European Defence Fund (EDF) has been operational since 2021, it differs in nature from these five EDIP-based projects in terms of scale and binding force. While the EDF focused on supporting multinational consortia in the research and development phase, this initiative represents a step forward by designating priority areas aimed at actual procurement and deployment. However, as EAI's previous diagnosis pointed out, the history of European defense integration has been a repetition of the pattern where 'political integration remains at a rhetorical level, while cooperation at the individual state and corporate levels takes precedence' [3]. Precedents such as the Freya missile defense project or the Destinus consortium also materialized as multilateral cooperation in the form of a 'coalition of the willing' rather than integrated procurement at the EU level [3][5].
Ukraine's mode of participation can be compared to Cold War-era cases where the Western bloc integrated non-member partners into its defense industrial supply chain. However, the uniqueness of the Ukrainian case lies in the fact that the country is not a mere recipient of aid, but also serves as a provider possessing combat data and proven production capabilities. The UK's access to AI drone swarm data [11] and the drone co-production agreement with Finland [10] demonstrate that Ukraine is transitioning from a 'supported battlefield' to an 'industrial partner exporting technology.' This is a pattern that has not appeared clearly in any past non-member partnerships.
Hungary's three-year blockage and the eventual release of the EPF funds [8][13][14] reconfirmed the vulnerability of the unanimity rule in EU foreign and security policy decision-making. This serves as a precedent suggesting that individual member states could repeatedly exercise their veto power in future funding allocation processes for joint defense industrial projects.
4. Key Variables Shaping Future Developments
The first variable is the actual pace of disbursement of the €1.5 billion EDIP fund [4]. Approval is a necessary, but not sufficient, condition for fund allocation. Based on experience with the European Defence Fund, significant administrative delays are likely to occur before actual contracts are signed.
The second variable is whether raw material supply chain issues can be resolved. If bottlenecks in titanium and rare earths persist, expanding production for electronics- and precision-component-intensive projects like DECODER (drone/anti-drone systems) or IMSD (integrated maritime defense system) will be constrained [3]. Conversely, this could serve as an entry opportunity for non-EU firms that can offer alternative supply lines.
The third variable is the speed of linkage between Ukraine's path to EU integration and its participation in the defense industry. The key is whether the current trend—where the Ukraine Facility funds [9], the release of EPF [8][13][14], and participation in joint defense industrial projects [1] proceed simultaneously—will be sustained, or whether it will stagnate again due to political vetoes by individual member states, as seen in the case of Hungary.
The fourth variable is the level of the US security commitment. As the Patriot stockpile shortage [5] prolongs or pressure on defense burden-sharing from the Trump administration intensifies, the EU's incentive to upgrade these five projects from symbolic measures to substantive alternative capabilities will grow. Conversely, if the US security commitment stabilizes, member states' incentives to participate in joint procurement may weaken.
III. Recommended Responses
EU Approval of Common Defense Projects and Ukraine's Participation: Comprehensive Assessment and Recommended Responses
1. Comprehensive Assessment and Recommended Responses
This approval marks a milestone where European defense integration has transitioned from political rhetoric to the stage of financial execution. Actual funding, namely the €1.5 billion EDIP fund, has been allocated to five priority areas [4]. However, this amount is modest compared to Europe's overall defense spending. As EAI's previous analysis pointed out, 'due to the absence of a common EU procurement system and intergovernmental limitations, the pattern of cooperation taking shape first at the individual state and corporate levels' is highly likely to persist even after this approval [5]. Therefore, rather than waiting for a single window at the EU institutional level, South Korea's response should focus on preemptively targeting already established contact points at the individual state or consortium level.
There are three key assessments. First, a structure in which Ukraine participates in most projects, including DECODER and IMSD, is becoming entrenched [1]. This trend elevates Ukraine from an aid recipient to a partner in the European defense industrial ecosystem, with the UK's sharing of Ukrainian battlefield data [11] and Finland's drone deal [10] on the same trajectory. If South Korea joins this trend late in terms of Ukraine's reconstruction and defense cooperation, it will lose its voice in the process of shaping technology standards based on combat data. Second, the EU's 'buy European' preference acts as a structural constraint on the South Korean defense industry. Because the EDIP funding itself is designed to prioritize EU/EEA-based firms, direct participation by South Korean companies at the EU institutional level is institutionally restricted. Third, despite this, procurement by individual member states such as Poland and the Baltic states, along with multilateral industrial projects like the Destinus consortium, remain open pathways [5]. A two-track strategy that separates the Council of the EU's decisions from individual member states' procurement is required.
2. Short-, Medium-, and Long-Term Action Plans
Short-Term (3–6 Months): The Ministry of National Defense and the Defense Acquisition Program Administration (DAPA) must monitor the process of finalizing detailed implementation regulations (technical requirements, eligibility criteria) for both the DECODER (drone/anti-drone) and IMSD (maritime/seabed defense) projects. As reported by the Austrian media outlet Die Presse, IMSD aims to establish an integrated system to counter threats on the high seas and seabed [6]. South Korea needs to explore the possibility of South Korean companies with export track records in seabed cable protection technology and anti-drone interceptor systems (such as Hanwha and LIG Nex1) participating in EDIP sub-consortia. Simultaneously, a separate defense cooperation channel with Ukraine should be opened. It is worth prioritizing the review of a bilateral MOU that combines Ukraine's combat data with South Korea's mass-production capabilities, similar to Finland's drone deal [10].
Medium-Term (6 Months–2 Years): Focus should be placed on individual national procurement lines, centered on Poland and the Baltic states. Previous EAI analysis pointed out that Poland is leading the rearmament discourse [3]. Leveraging the track record of cooperation on K2 tanks and K9 self-propelled howitzers in Poland, South Korea can seek sub-partner status if Poland participates in the air and missile defense project among the five priority areas. Furthermore, by tracking which companies and consortia are actually allocated EDIP funds, South Korea needs to pave the way for its integration into the parts and materials supply chains of EU-based firms in the form of non-finished goods.
Long-Term (2–5 Years): Options to institutionalize the IP4 (South Korea, Japan, Australia, New Zealand)-EU defense industrial cooperation framework should be examined. The current EU common defense projects have established a precedent for non-member state participation through Ukraine. This could serve as a reference model for future discussions on the limited participation of IP4 nations. However, considering that Ukraine's participation within the EU is tied to its accession process, South Korea's rationale for participation must be framed separately based on different grounds, such as maritime security information sharing and alignment of anti-drone technical standards.
3. Monitoring Indicators and Trigger Points
First, the timing of actual contract signings for the EDIP fund and the list of participating companies serve as primary observation indicators. The concrete intensity of the 'buy European' principle's application will be revealed here. Second, whether Ukraine's scope of participation in the five projects expands or is restricted in specific areas (such as sensitive fields like air and missile defense) serves as a trigger point. This is highly likely to be linked to the pace of progress in Ukraine's EU accession negotiations [Deleted Source]. Third, it is necessary to verify whether the disbursement of the €6.6 billion EPF and the conditions for the €3 billion Ukraine Facility proceed independently of these defense industrial projects or are integrated into a single package [8][9][13][14]. Fourth, the pattern of vetoes exercised by individual member states, such as Hungary, must be continuously tracked. There is a precedent where the release of EPF funds was delayed for three years due to Hungary's opposition [14]. Fifth, the ratio of national budget alignment with these five priority areas in the defense budgeting of Poland and the Baltic states is a key indicator showing the substantive intensity of implementation.
4. Summary and Conclusion
While the Council of the EU's approval is a decision that propels European defense integration into the phase of financial execution, cooperation at the individual state and corporate levels is highly likely to remain the primary path of implementation due to the intergovernmental structure. In this framework, Ukraine is shifting from an aid recipient to a defense industrial partner, supported by bilateral cooperation cases with the UK and Finland [10][11]. Rather than seeking direct participation at the EU institutional level, South Korea should adopt a diversified strategy that combines procurement by individual states like Poland and the Baltic states, multilateral consortia, and separate bilateral cooperation with Ukraine. The disbursement details of the EDIP fund and whether Ukraine's scope of participation expands are the most critical observation variables over the next six months.
References
[1] [Kyiv Independent] EU approves major defense projects plan, with Ukraine featuring prominently
[2] [Turan News Agency] Aİ müdafiə sənayesini gücləndirir: bu, Azərbaycan üçün nə deməkdir?
[4] [Defense News] EU nails down five defense priority areas to channel common spending
[6] [Die Presse] EU beschließt erste gemeinsame Rüstungsprojekte [premium]
[7] [EU Trade Defence] EU Trade and economic security policy website
[8] [Kyiv Independent] EU defense fund unblocked, and with it new support for Ukraine
[9] [Kyiv Independent] EU ambassadors clear 3 billion euros for Ukraine after Kyiv passes reforms
[10] [Ukrainska Pravda] Україна і Фінляндія підписали Drone Deal
[12] [ERR News] Euroopa Liit jagab laiali 6,6 miljardit eurot Ukraina abiga seotud fondist
[13] [VnExpress] EU 'cởi trói' gói viện trợ 7,5 tỷ USD cho Ukraine
[14] [South China Morning Post] EU to release US$7.5 billion linked to Ukraine military aid
[16] [DW (Deutsche Welle)] EU to condemn war in Ukraine at G20 even if Putin attends
[17] [LRT] ES valstybės narės susitarė dėl 6,6 mlrd. eurų iš Europos taikos priemonės panaudojimo
[19] [Defense News] Europe’s push to reduce US reliance is reshaping the defense space market
*This text is an AI translation of an original written in Korean. Some translations or nuances may be inaccurate.
This report is an in-depth analysis planned by an EAI researcher, grounded in sophisticated AI-assisted research, and finalized by the EAI researcher.
How can I help you?