Remarks by Executive Vice-President Virkkunen and Commissioner Kubilius on a new financial instrument to support the European defence industry

Executive Vice-President Virkkunen

Today we adopted a proposal for a Regulation introducing a new financial instrument to support the European defence industry: the Programme for agile and rapid defence innovation, ‘or AGILE,' for short.

I want to start by thanking my very good colleague, Andrius. Our cooperation on this file has been incredibly smooth and, fittingly, very agile.

The war in Ukraine has taught us that for the European defence industry to become more competitive, we must be faster in our innovation, combining disruptive technologies such as AI, quantum, robotics and cyber to our warfare.

That is why the European Commission has encouraged the Member States to use at least 10% of armament procurement budgets to emerging and disruptive technologies.

New emerging technologies shape modern warfare. European defence industry has been fragmented and the message we get from the SME's and start-ups is that they often face difficulties when they try to get their foot to the door in defence procurement.

Up until now, the EU has done great work in defence R&D. However, as also highlighted in the EU Defence Industry Transformation Roadmap, we have not been as successful as we want to be when it comes to speed, risk-taking and supporting defence industry SME's and start-ups.

That is where AGILE comes in. AGILE, a regulation proposal, is our new €115 million funding tool. It is a pilot project lasting year 2027. Its purpose is to take disruptive defence tech out of the lab and onto the field at record speed.

AGILE will support between 20 and 30 projects, and we are stepping up to cover 100% of the eligible costs.

It will be fully aligned with the most pressing needs of EU Member States, and will ensure that European defence is not just innovative, but ready to respond to any threat. We want to take SME's and start-ups onboard to build needed military capabilities.

AGILE is the missing piece of the puzzle that helps defence solutions reach the market. It fits right in with our existing programs like the European Defence Fund.

For the Commission, this is not just a policy – it is a strategic priority.

Just last week we adopted another landmark proposal for European startups – the 28^th regime. We want to make things easier for people with good ideas, and that is what we are also doing with our pilot project Agile.

The world is changing, the threats are changing, and we are committed to ensuring European defence is ready to respond.

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Commissioner Kubilius 

Wars and battlefields are changing. Militaries need new tech, speedy deliveries, very competitive prices. That is why the transformation of defence industry is our strategic priority. That is what the EU Defence Industry Transformation Roadmap of 2025 November 19th was about. The Agile program comes from that Roadmap.

Today about 70-80% of defence procurement in EU countries (notably large defence spenders) is primarily directed at the top ten largest contractors (large established companies). This contrasts with the US, where less than 40% is directed at the top ten.

Usually those large companies are developing ‘haute couture' production in defence. It takes long time, it seeks technological excellence, and the products are really expensive. Such production comes in small numbers and it is really difficult to quickly surge such a production.

At the moment, we have EU instruments to support ‘haute couture' production in defence, like European Defence Fund. The procedures of the Fund to approve the projects also are ‘haute couture': they are procedurally very detailed and take long time.

Today we need to be ready to win the wars of tomorrow, not just to fight the wars of yesterday. In between tomorrow and yesterday we need to be ready to fight the wars of today. Be able to adapt very quickly, to ramp up production immediately. In general we need to be smarter and quicker than our adversaries.

That is why we need more innovative SMEs and startups, both from the defence and civilian sector, to help us accelerate our defence readiness.

We need more disruptive and low-cost solutions for our armed forces. SMEs and startups can help if we ‘boost' them with speedy support and simple rules.

That is why we need to create financial instruments to support not only ‘haute couture' projects, but also ‘good enough' projects: disruptive, able to scale up in a speedy way from startup level to industrial level and to produce massive amounts of cheaper products, responding to the need of modern frontline.

That is why we are proposing the Agile program as a ‘booster' for innovative SMEs and scaleups.

The goal of Agile ambition and speed.

Speed on administration side decision making: 4 months. Speed on industry side - delivery of disruptive technologies and products: lead time 6-12 months or less.

Agile ambition the Program will establish a fast-track process for evaluation of applications. The Commission will award grants from 1 up to €5 million for European SMEs within a 4-month period. This is an unbelievable speed for EU bureaucracy and decision making.

Which means that we should accept a higher level of risk-taking on our side (preliminary evaluation: self-declaration from applicants on ownership control).

AGILE will be open to single entities from EU Member States, Norway and Ukraine. The focus will be in principle on New Defence players (SMEs, including startups and scaleups that meet that definition, and including from the civil sector). Creation of consortia is also possible.

Agile also will create possibilities for Inducement intervention: by allowing participation of New Defence actors established in third countries, provided they relocate to an eligible country.

The Programme will provide financial support to companies by covering up to 100% of eligible costs of selected projects.

Agile is a programme limited in time and in financial resources. Because for 2027 we shall be able to use only €115 million for this program. That is all we were able to find available in our current budgets of EDIP, EDF and Space program till 2028.

We would be very happy to use much more for EDIP and AGILE till 2028, but it is for Member States to decide.

Since we are able to use only €115 million for 2027, we can expect that only 20-30 European SMEs will be able to enjoy the benefits of the Agile programme in 2027.

The number is limited, but if we shall manage to assist those companies to become a new European ‘Helsing SE' or ‘Frankenburg Technologies' and meet the evolving needs of European militaries, that would be a great success for the Agile programme. 20 new successful disruptors in the European defence landscape - that would be great! That would be a great ‘booster' for our defence.

We hope that Agile will demonstrate its success in the one short year of 2027. It will be a good opportunity to test Agile, in order to continue it with much bigger financial resources during the next MFF period from 2028 to 2035.

And we hope that success of the Agile programme will inspire individual Member States to go for the establishment of similar national Agile programs. Some countries have some similar programmes, but Agile is the most ambitious in terms of speed and size of awards.

We need to remember that Member States, if they implement NATO pledges by 2035, they will have the possibility to spend 50-100 times more for defence, than we will spend on the EU level through the next MFF. It means Member States can make the Agile agenda 100 times more powerful than we shall be able to do at EU level.

Let us make Agile a new symbol of European defence!