• Posted 04-Nov-2019

Defence Research: Cooperative Financial Mechanism (CFM) Close to Confirmation

A final version of a Cooperative Financial Mechanism (CFM) between the EIB and the EU Defence Agency (EDA), has been sent to Member States for sign-off.

The CFM is an innovative programme launched by EDA with a view to facilitating the financing of collaborative defence capability and research projects between Member States. It is considered to be a front-runner to the new EU Defence Fund which will be launched as part of the next EU programming period from 2021-2027.

The CTM will be delivered in cooperation with the European Investment Bank (EIB) and will be structured around two pillars:

• the first will see the EIB establish bilateral framework loan agreements with Member States interested in financial support to set up and conduct the development of military technology. The EIB involvement is supported and facilitated by the EDA which will act as the ‘Facility Agent’ on behalf of EIB under its instructions and responsibility, serving as a primary point of contact between the EIB and the beneficiary country in the technical assessment of the feasibility of each project;
• the second pillar will provide a State-to-State support facility, structured as a system of reimbursable advances and deferred payments. It can be used to support any defence related project, in full compliance with national and European law. The facility is structured as a set of individual bank accounts which are opened and managed by the EDA under the control of the CFM participating Member States. Within that pillar, any CFM Member can submit a request for financial support to the CFM programme.

Research and Innovation projects in the area of defence would -potentially- be eligible under the second of these two pillars, with full criteria and rules for participation to be established once the CTM has been signed-off. The CTM is a voluntary arrangement and will enter into force when the last country having declared its intention to join signs a specific Programme Arrangement.

Further details regarding the CTM process are available on the EU Defence Agency website.

Source: UKRO