EU Approves Five Joint Defense Priority Projects and Institutionalizes Ukraine's Participation: Response Strategies for Middle Powers
Executive Summary
On September 28, the Council of the European Union approved five joint defense projects—air defense, maritime defense, space, counter-drone, and eastern flank protection—qualifying them for funding under the €1.5 billion European Defence Industry Programme (EDIP). Amid the dual pressures of the Trump administration's defense burden-sharing demands and Russia's posture for a protracted war, this decision marks an institutional watershed as the EU transitions from individual member-state procurement to bloc-wide joint procurement. Ukraine has been integrated as a participating nation in several projects, including Freyja, shifting its status from a mere recipient of aid to a joint planning partner. While the EU's preference for intra-regional procurement structurally limits the direct entry of South Korea's defense industry (K-defense), bilateral and consortium channels with Poland, the Baltic states, and Ukraine remain open. Rather than waiting for a single window in Brussels, South Korea should prioritize a parallel approach targeting individual member states and Ukraine.
I. Analysis of the Current Situation
EU Approval of Five Joint Defense Priority Projects and the Institutionalization of Ukraine's Participation: Analysis of the Current Situation
1. Background and Progress
In July, the European Commission proposed a joint investment plan in five areas: air defense, maritime security, space, drone/counter-drone, and eastern flank security [3]. The underlying concern was clear: simply having the 27 member states increase their individual defense budgets would inevitably lead to redundant spending and fragmented procurement [3]. EU defense policy remains a domain dominated by the principle of intergovernmentalism [3], meaning that reconciling the diverse interests of member states is no easy task.
Two distinct pressures drove this proposal. The first was the Trump administration's pressure regarding defense burden-sharing [3]. Within the EU, there is a widely shared assessment that NATO has entered a transitional phase, moving from a US-centric single-axis system to a dual-axis system shared between the US and Europe [7]. The second pressure is the protracted war in Ukraine. Russia has reportedly planned to increase its 2027 defense budget by 27% compared to the previous year, which is being interpreted as a signal that Moscow has no intention of ending the war [14]. Amid this heightened perception of threat, European defense companies have already seen their earnings and order backlogs surge. Major firms such as Indra, Thales, Leonardo, and Hensoldt saw their net profits rise by 25%, with new orders exceeding €83 billion [7]. In Poland, Prime Minister Donald Tusk has pledged to build "Europe's largest" army—a direct consequence of its geopolitical position bordering Russia, which has accelerated its threat perception [7].
2. Current Status
On September 28, the Council of the European Union gave its final approval to the five projects: DECODER (drone/counter-drone), IMSD (maritime defense), space, air defense, and eastern flank protection [1][5]. These projects have qualified for funding under the €1.5 billion European Defence Industry Programme (EDIP) [1][8]. The German media outlet Die Presse explained that DECODER supports member states in building and operating drones, while IMSD is an integrated defense system designed to counter threats on the high seas and seabed [8]. In her State of the Union address on September 16, Commission President Ursula von der Leyen mentioned "Freyja," an anti-ballistic missile defense project jointly pursued with Ukraine. This indicates that integration is progressing at the level of concrete projects rather than remaining mere rhetoric [2].
Around the same time, the EU made moves on other tracks regarding support for Ukraine. On September 25, the Political and Security Committee agreed to disburse a €6.6 billion military aid package through the European Peace Facility (EPF), an issue that had been stalled for three years due to Hungary's opposition [10]. On September 24, the EU also approved a €3 billion loan under the Ukraine Facility. However, this decision has faced criticism for being linked to a regression in Ukraine's judicial reforms. The Kyiv Independent, citing Ukrainian experts, pointed out that this was a reward for "anti-reform" [13]. On the same day, September 28, EU defense ministers discussed whether to establish a NATO-style emergency response mechanism to counter Russia's "hybrid attacks" [16]. This shows that the EU's institutionalization efforts are proceeding simultaneously in both defense procurement and security governance.
3. Key Actors and Positions
The European Commission and the Council of the European Unionserve as the institutional architects of procurement integration. Their intention to transition individual national budgeting into bloc-wide joint procurement is clear [1][3]. Commission President von der Leyen's specific mention of Freyja is read as a political message aimed at symbolically cementing integration with Ukraine [2].
Ukraineis transitioning from a recipient of aid to a partner in the European defense industrial ecosystem. The Kyiv Independent reported that Ukraine is participating in most of the five projects [5]. Poland has proposed establishing a production base for Patriot systems on Polish territory for Ukraine, which has secured manufacturing licenses from the United States [15]. This indicates that bilateral industrial integration is running parallel to EU joint projects. However, within Ukraine, criticism has also emerged that the conditions of the EU's financial support turn a blind eye to the regression of judicial reforms [13]. The expansion of aid and domestic governance issues remain deeply intertwined.
Poland and the Baltic Statesand other eastern flank border states are the actors that feel the threat from Russia most directly. Poland is pushing to relax rules of engagement for intercepting drones and missiles [18], and is actively seeking to host local Patriot production [15]. The inclusion of eastern flank protection in the five priority areas can be seen as a direct reflection of these countries' demands.
Russiais signaling its readiness for a protracted war by increasing its 2027 defense budget by 27% [14]. The institutionalization of the EU's joint defense simultaneously serves as a response to Russia's military buildup.
The United Statesis not a direct party to this decision, but the Trump administration's pressure regarding defense burden-sharing has acted as a background variable driving the EU's autonomous moves [3][7]. The EU's transition to a joint procurement system needs to be understood within the framework of NATO's transition to a US-Europe dual-axis system [7].
4. Key Issues
First, in terms of EU trends, this approval represents a substantive institutional change in foreign and defense policy. The approval of the five projects and the allocation of EDIP funds operate not as a mere declaration but as a binding financial mechanism [1][3]. Second, regarding regional dynamics and conflict, the institutionalization of Ukraine's participation serves to pre-configure the outline of post-war reconstruction and defense cooperation. The Freyja project is highly likely to serve as a testing ground for the Ukraine-EU defense industrial linkage that will persist even after the war ends [2][5]. Third, in terms of alliances and multilateral security, the key issue is whether the EU's transition to an autonomous procurement system is a complement or an alternative to the NATO-centric security architecture. The fact that the EU is internally considering a NATO-style hybrid response mechanism [16] suggests that the center of gravity in security governance is partially shifting toward the EU. However, given that the principle of intergovernmentalism remains the foundation of defense policy [3], it is difficult to definitively conclude that this approval will immediately lead to supranational integration. The pattern of cooperation at the individual state and corporate levels preceding EU-wide integration is likely to persist [7].
II. In-Depth Analysis
EU Approval of Five Joint Defense Priority Projects and the Institutionalization of Ukraine's Participation: In-Depth Analysis
1. Root Cause Analysis
At the root of this approval lies the chronic inefficiency of the EU's defense procurement structure. Under a system where 27 member states draw up individual budgets, the redundant development of identical items is repeated. Procurement unit costs have also remained high, failing to leverage economies of scale. Previous EAI analysis defined this structure as a "domain dominated by the principle of intergovernmentalism" [3], meaning that decision-making power over defense policy remains in national capitals rather than in Brussels. The European Commission's proposal in July was driven by the assessment that this inefficiency could no longer be left unaddressed [3].
The immediate trigger is the security credibility gap originating from the United States. An assessment is shared within the EU that NATO has entered a "transitional phase, moving from a US-centric single-axis system to a US-Europe dual-axis system" [7]. The Trump administration's pressure regarding defense burden-sharing went beyond merely demanding that European nations increase their defense spending; it shook the very assumption that the US would intervene swiftly in a crisis. This decline in trust provided the EU with an incentive to channel individual national military buildups into bloc-wide joint procurement.
The second pillar is Russia's posture for a protracted war. Russia has reportedly planned to increase its 2027 defense budget by 27% compared to the previous year, leading to interpretations that Moscow has no intention of negotiating an end to the war [14]. The fact that EU defense ministers discussed establishing a NATO-style emergency response mechanism to counter Russia's "hybrid attacks" on the same day, September 28, is also linked to this perception of a protracted conflict [16]. The consensus that the threat will not be resolved in the short term has lowered the political costs of joint procurement.
2. Structural Context
Political Structure: EU defense policy is a domain where the principle of unanimity and member-state sovereignty operate strongly. The fact that these five projects, despite being labeled "joint procurement," opted for a method of coordinating each member state's participation and cost-sharing ratio reflects this limitation. The case of Hungary blocking the EPF aid package for three years demonstrates the political vulnerability of this structure [10]. Under the unanimity rule, a veto by a small number of member states can delay the entire decision-making process. The choice of an indirect approach for the approval of these five projects—namely, "designating priorities" and "granting eligibility for EDIP funding"—can be read as an institutional design intended to bypass this veto risk.
Economic Structure: European industry surveys repeatedly point out that the defense supply chain is vulnerable to raw material bottlenecks, such as titanium and rare earth elements [4]. Even in a boom period where major companies like Indra, Thales, Leonardo, and Hensoldt saw their net profits rise by 25% and new orders exceed €83 billion [7], expanding production capacity remains hindered by raw material supply constraints. The €1.5 billion in EDIP funding is also an industrial policy intervention aimed at easing this bottleneck. At the same time, the preference for intra-regional procurement structurally restricts the participation of suppliers from outside the EU.
Security Structure: The institutionalization of Ukraine's participation signifies a shift in status rather than a mere expansion of aid. The Freyja project mentioned by Commission President von der Leyen is an anti-ballistic missile defense initiative jointly pursued with Ukraine [2]. The structure in which Ukraine participates in most of the new projects, such as DECODER and IMSD, implies an intention to import combat-proven data and drone warfare experience accumulated on the battlefield back into the EU defense industrial ecosystem. Poland's proposal to host a Patriot production base on its territory following Ukraine's acquisition of US manufacturing licenses [15] demonstrates that the combination of combat experience and production capability is already underway at the bilateral level.
3. Historical Precedents and Comparison with Similar Cases
This is not the EU's first attempt at joint procurement. Multinational weapons programs, such as the Eurofighter and the A400M, have existed in the past. However, these were mostly limited to bilateral or multilateral agreements among a small number of member states, and there were few instances where they were integrated with a funding framework at the EU institutional level. The linkage with EDIP in this instance represents a qualitative shift. It stands on a different institutional footing because it was approved by the Council of the European Union, a co-legislative body, rather than being a mere agreement among individual member states [1].
The mechanism for reimbursing weapons procurement costs through the EPF in the early stages of the war in Ukraine showed a similar trajectory of institutionalization. It was a structure where the EU partially reimbursed member states for the costs of weapons they had individually provided to Ukraine [10]. The approval of these five projects goes a step beyond this reimbursement-centered aid, shifting toward involving Ukraine from the production and development stages. This can be viewed as a step-by-step deepening, transitioning from a recipient of aid to a partner.
The contrast with NATO's past experience is stark. While NATO prioritized political declarations and operational integration, it left defense procurement itself to the national sovereignty of its member states. In contrast, what the EU is attempting here is an approach that institutionalizes commonality starting from the procurement stage. Previous EAI analysis diagnosed that "while the political integration of the EU and NATO remains at the level of declarations, a structure where cooperation at the individual state and corporate levels takes precedence is highly likely to persist in the future" [3][7]. It is still too early to tell whether these five projects can actually change this structure. The approval is merely a "granting of eligibility," and actual joint production contracts and budget execution must go through separate stages.
4. Key Variables Shaping Future Developments
The first is the political sustainability of adjacent aid tracks, such as the EPF and the Ukraine Facility. Criticisms have already been raised that the €3 billion loan under the Ukraine Facility is linked to a regression in judicial reforms [13]. If such controversies recur, fatigue regarding overall support for Ukraine could accumulate within the EU. This is a variable that will also affect the scope of Ukraine's participation in joint defense projects.
The second is the potential recurrence of Hungary-style vetoes. The precedent of EPF aid being delayed for three years due to Hungary's opposition [10] suggests that similar political delays could recur during the actual budget execution phase of these five projects. As long as the unanimity structure remains in place, this risk will persist.
The third is the speed at which raw material supply chain constraints are resolved. If supply bottlenecks for critical raw materials like titanium and rare earth elements persist [4], the actual expansion of production capacity could be delayed despite the injection of EDIP funds. This is a variable directly linked to the implications of this issue for the South Korean defense industry, as it could present opportunities for extra-regional suppliers, including South Korea, to propose alternative supply lines [7].
The fourth is the actual trajectory of the US security commitment. Depending on whether the Trump administration's policies remain at the level of defense burden-sharing pressure or lead to a substantive reduction in engagement, the speed and intensity of the EU's joint procurement efforts could vary. How quickly NATO's transition to a US-Europe dual-axis system actually progresses [7] remains a fundamental variable shaping the momentum behind the EU's pursuit of defense autonomy at the bloc level.
III. Recommended Response Strategies
EU Approval of Five Joint Defense Priority Projects and the Institutionalization of Ukraine's Participation: Comprehensive Response Strategies
1. Comprehensive Assessment and Recommended Response Strategies
The Council of the European Union's decision on September 28 is not a mere declaration but an institutional shift accompanied by budget allocation authority [1][5]. The core fact is that the five projects—DECODER, IMSD, space, air defense, and eastern flank protection—have qualified for €1.5 billion in EDIP funding [1][8]. Prioritization tied to a budget is fundamentally different from political rhetoric. It creates incentives for member states to align their actual procurement plans with this framework.
The implications for South Korea are twofold. First, the EU-wide joint procurement system has a strong protectionist character favoring regional industries. The intra-regional procurement preference attached to EDIP funds structurally limits the direct participation of South Korea's defense industry (K-defense) in EU institutions. Second, despite this, bilateral channels with individual member states and Ukraine remain open. Poland's proposal to host Patriot production facilities on its territory illustrates this [15]. This indicates that the practical entry points are individual state and consortium-level contact points, rather than a single window in Brussels.
The recommended response strategy is a dual-track approach that prioritizes "bilateral engagement with individual states and Ukraine" over "waiting for EU institutional channels." The EU's preference for intra-regional procurement is unlikely to ease in the short term. The realistic path for South Korea lies not in Brussels, but in Warsaw, Vilnius, Helsinki, and Kyiv.
2. Short-Term Action Plan (3–6 Months)
The Ministry of National Defense and the Defense Acquisition Program Administration (DAPA) should prioritize reviewing individual channels with procurement authorities in Poland and the Baltic states. Poland is leading European rearmament, pledging to build "Europe's largest" army [7]. Countries that are actively seeking to expand their domestic production base, as seen in Poland's proposal to host Patriot production facilities [15], are highly likely to be receptive to proposals for local joint ventures or licensed production with South Korean companies.
Channels for cooperation on combat data with Ukraine should also be fleshed out during this period. With a structure where Ukraine participates in most projects, including DECODER, IMSD, and Freyja [2][5], it is emerging as a key accumulator of combat data on drone and counter-drone warfare. This data is an area that can be shared through bilateral agreements without going through EU institutions. The Ministry of Foreign Affairs and the Ministry of National Defense need to explore the possibility of signing a memorandum of understanding (MOU) on technological cooperation with Ukraine's Ministry of Defence and defense procurement agency.
Contact points regarding raw material supply chains should also be pursued in parallel. In a situation where bottlenecks in critical raw materials like titanium and rare earth elements are pointed out as structural constraints on expanding European defense production capacity [4], there is room for South Korean companies to approach as alternative suppliers or processing technology providers. A proposal for supply chain cooperation at the level of the Ministry of Trade, Industry and Energy (MOTIE) should be prepared during this period.
3. Medium-Term Action Plan (6 Months–2 Years)
The design process for the second phase of EDIP or subsequent funding programs must be continuously monitored. The €1.5 billion scale has a strong character of an initial pilot. The key will be how the conditions for the participation of non-EU suppliers are set in future discussions on expanding the funding scale and revising procurement regulations. The EU-related division of the Ministry of Foreign Affairs should establish a regular consultation channel with the European Commission's Directorate-General for Defence Industry and Space (DEFIS) to identify regulatory changes early on.
Consortium participation models also need to be fleshed out during this period. A structure where an intra-regional EU company acts as the prime contractor and a South Korean company participates as a subcontractor or component supplier is a realistic way to bypass the intra-regional procurement preference. Establishing joint ventures or negotiating technology licensing with European companies in the air defense and drone sectors (such as Thales, Indra, Leonardo, and Hensoldt) should be set as a medium-term task [7].
The progress of joint Ukraine-Europe missile defense projects, such as the Freyja project, must also be tracked [2]. If this project proceeds successfully, it could serve as a reference model for South Korea's future discussions on exporting missile defense systems and technological cooperation.
4. Long-Term Action Plan (2 Years or More)
Once the EU's joint defense procurement system enters a mature stage, South Korea should seek indirect linkage through the NATO-IP4 (South Korea, Japan, Australia, and New Zealand) cooperation framework. Considering the assessment that NATO is in a transitional phase from a US-centric single axis to a US-Europe dual axis [7], the strengthening of the EU's independent defense capabilities is highly likely to lead to an increased voice for the European side within the NATO framework. In this case, strengthening South Korea's partnership with NATO could serve as an indirect route to accessing the EU defense industry ecosystem.
Cooperation on Ukraine's reconstruction and defense must also be maintained as a long-term task. In the process of reconstructing Ukraine's defense industry after the war, opportunities may open up for South Korean companies to participate through production facility investments or technology transfers. However, the timing of this remains fluid depending on the war situation and post-war scenarios.
5. Monitoring Indicators and Trigger Points
The following indicators should be monitored on a quarterly basis:
The announcement of the budget size and participation conditions for the second phase of EDIP. Whether the regional procurement ratio requirements are relaxed or tightened is a key variable in determining accessibility for non-EU suppliers.
Changes in the positions of member states capable of exercising veto power, such as Hungary. There is a precedent where the European Peace Facility (EPF) support package was delayed for three years due to Hungary's opposition [10]. Similar political deadlocks could recur during the implementation of EDIP.
Ukraine's domestic governance risks. There is a case where the disbursement of loans under the Ukraine Facility was criticized due to its linkage with controversies over backsliding in judicial reform [13]. A decline in Ukraine's institutional credibility is a trigger that could fuel skepticism regarding the sustainability of support within the EU.
The pace of Russia's military buildup. Russia's plan to increase its 2027 defense budget by 27% [14] is a factor that solidifies threat perceptions within the EU. If this trend continues, the pace of strengthening the EU's joint procurement system is expected to accelerate. Conversely, if post-war negotiations begin in earnest, the possibility that the political momentum for joint defense projects will weaken cannot be ruled out.
Trends in the competition to attract production bases among Poland and the Baltic states. Whether cases like the proposal to host Patriot production facilities [15] spread to other countries is a leading indicator for assessing opportunities for South Korean companies to enter individual countries.
6. Summary and Conclusion
The EU Council's approval of the five priority projects represents an institutional shift accompanied by the tangible incentive of EDIP funding [1][5]. The declining credibility of the US security commitment and Russia's posture for a protracted war served as the background accelerating this transition [7][14]. The institutionalization of Ukraine's participation signifies an elevation in its status from a recipient of aid to a partner in the European defense industry ecosystem [2][5].
The implication for South Korea is that while direct entry routes at the EU institutional level are narrowing, bilateral channels with individual member states and Ukraine remain open. As shown by Poland's proposal to host production facilities [15], practical cooperation is highly likely to materialize first in the capitals of member states rather than in Brussels. Rather than waiting for the formation of a single EU window, the South Korean government and companies must now implement a decentralized integration strategy that simultaneously pursues contact points with individual countries and consortia alongside bilateral cooperation with Ukraine.
References
[1] [Defense News] EU nails down five defense priority areas to channel common spending
[4] [Roland Berger - Automotive] Building resilience in Europe's aerospace & defense supply chains
[5] [Kyiv Independent] EU approves major defense projects plan, with Ukraine featuring prominently
[6] [Turan News Agency] EU strengthens defense industry: what does this mean for Azerbaijan?
[8] [Die Presse] EU approves first joint defense projects [premium]
[9] [Bruegel] Session 1a: Europe's digital sovereignty: lessons from China's AI quest
[10] [VnExpress] EU 'releases' $7.5 billion aid package for Ukraine
[11] [Bruegel] Session 6b: Can Europe become more ‘Schumpeterian’ and how?
[12] [ERR News] European Union distributes 6.6 billion euros from fund related to Ukraine aid
[16] [Hürriyet Daily News] EU debates need for NATO-style response to Russia ‘hybrid attacks’
[18] [Kyiv Independent] Poland to ease rules for shooting down drones, missiles entering from Russia
[20] [ERR News] EU countries promise support to Ukraine from billions of the peace facility
[21] [Defense News] Ukraine’s deadly AI training platform for drone tech opens to UK companies
*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.
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