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European Commission presents Defence Omnibus proposal
On Tuesday, 17 June, the European Commission unveiled a sweeping package of proposals aimed at dramatically speeding up investment in Europe’s defence industry. In response to the urgent security challenges posed by the ongoing war in Ukraine, the Commission has proposed the “Defence Readiness Omnibus.” This initiative seeks to minimise bureaucracy, clarify regulations for investors, and enhance Europe’s ability to develop the necessary military capabilities. The move signals a significant push from Brussels to ensure the European Union, and its member states can effectively deter threats and prepare for potential high-intensity conflicts.
The proposals come as leaders across the bloc warn that Europe must rapidly scale up its manufacturing of weapons and equipment. As Russia’s war in Ukraine enters its third year, the initiative seeks to adapt the EU’s peacetime regulatory framework for a more dangerous world. As Henna Virkkunen, the Commission’s Executive Vice-President: stated: “We are sending a clear political signal: Europe is serious about defence and creating credible preparedness. We are cutting through bureaucracy to help Member States and industry act faster, invest smarter, and strengthen our collective deterrence.”
Slashing red tape
A central pillar of the Commission’s plan is a direct cut on the bureaucracy that can hamper vital defence projects. Currently, gaining the necessary permits for new defence infrastructure, such as a munitions factory, can take several years. These ambitious proposals aim to slash this timeframe to just 60 days by introducing a fast-track permitting system.
Further measures are designed to simplify procedures within the European Defence Fund (EDF), the EU’s programme for funding collaborative defence research and development. The changes will reduce the administrative burden on companies applying for funds and will also make it easier for Ukrainian defence firms to participate. The goal, as described by Valdis Dombrovskis, Commissioner for Economy and Productivity, is to “unleash Europe’s overwhelming economic heft, by breaking down internal barriers, cutting red tape and clarifying the rules, so that a truly European defence industrial and technological capacity can be ramped up quickly, efficiently and effectively.”
Unlocking Investment and Easing Rules
Beyond cutting red tape, the proposals tackle a significant hurdle for the defence sector: access to finance. For years, some banks and investment funds have been wary of the arms industry, partly due to concerns about reputational risk and compliance with ESG standards.
To address this issue, the Commission will issue clear guidance affirming that investments in defence companies align with ESG principles, except for those firms that manufacture weapons prohibited under international conventions, such as landmines. This clarification aims to dispel what officials describe as “persistent misconceptions” and to promote private investment.
Furthermore, the EU will revise its approach to assessing mergers and acquisitions in the defence sector. Under the new proposals, mergers that are deemed to enhance the EU’s “defence readiness” will be viewed more favorably by competition regulators.
Conclusions
The Commission’s proposals represent a clear and decisive shift in the EU’s approach to defence. The overarching aim is to build a robust, responsive, and innovative European defence technological and industrial base that can meet the demands of the current geopolitical landscape. By simplifying regulations, encouraging joint procurement between member states, and making it easier for investors to back the sector, Brussels hopes to turn its strategic ambitions into tangible military capability.
The European Parliament and the Council will now negotiate this legislation. While debates are anticipated, the path forward is clear. Europe is taking significant steps to strengthen its defences and ensure it has the industrial capacity to maintain peace by preparing for the potential of conflict.
EU leaders meet President Trump at G7 summit
From 15-17 June, G7 leaders – Canada, France, Germany, Italy, Japan, the UK and the U.S. – convened in Kananaskis, Canada for the 2025 G7 Summit. The agenda covered a range of pressing global issues, including the ongoing crisis in the Middle East, the conflict in Ukraine, and escalating tensions between China and Taiwan. Collectively, the G7 represents 44% of GDP but only 10% of the world’s population.
Additionally, the Summit took place amid increasing U.S. trade tensions. Each EU leader held bilateral talks with President Trump, aiming to reset relations with the United States. Their statements revealed a unified push for stability and fairness.
European Commission President Ursula von der Leyen, shared, “The G7 Summit is an opportunity for good and deep talks between partners. I discussed with President Trump critical issues, from Ukraine to trade. On trade, we instructed our teams to accelerate their work to strike a good and fair deal.”
French President Emmanuel Macron confirmed; “With Trump, we discussed the shared interest of the United States and Europe in stabilising our trade relations and promoting growth and employment in each of our countries.”
Italian Prime Minister Giorgia Meloni declared: “During the G7, I had a bilateral meeting with the President of the United States…We also addressed the issue of economic relations between the EU and the U.S., reiterating the importance of strengthening transatlantic cooperation.”
German Chancellor Friedrich Merz shared: “The G7 is an unbeatable group – responsible for 44 per cent of the global economy. To keep it that way and to achieve stronger growth again, we must do our homework: strengthen trade, reduce tariffs, and remain attractive to markets.”
U.S. President Donald Trump left the meeting early, citing the Middle East as the reason for his departure.
From the Summit, it was clear that the EU is in favour of accelerating EU-U.S. trade negotiations and is proactively seeking a structured, rules-based framework to stabilise transatlantic trade tensions. This position was reinforced by the statements from France, Germany, and Italy, showing a unified approach from the EU.
However, just hours after the Summit, U.S. President Trump publicly criticised the EU for failing to present a favourable trade offer, stating: “We’re talking, but I don’t feel that they’re offering a fair deal yet.” Additionally, Trump’s early departure from the Summit showcases the U.S. President’s unpredictability in light of escalating global tensions. The U.S. remains an unstable negotiating partner, with a stable agreement being far from assured.
The ongoing EU-U.S. trade discussions are reaching a pivotal point, with the 9 July tariff pause deadline soon approaching. It is expected that a short-term temporary compromise will be reached to allow more time for discussions. With Member States needing to agree on the final deal, EU unity in the negotiations is essential.
National Economic Dialogue: Medium-Term budgetary planning against a rapidly changing global backdrop
On Monday, 16 June, the annual National Economic Dialogue (NED) took place at Dublin Castle, framed under the theme: “Medium-term budgetary planning against a rapidly changing global backdrop”. The eventbrought together a wide range of representatives from charities, environmental groups, businesses, unions and the academic community, as well as members of the Cabinet and the Select Committee on Budgetary Oversight. The aim was to inform Budget 2026 and support the development of a new Medium-Term Fiscal Plan. Discussions were held in themed breakout sessions, each chaired by a government minister.
Key themes
Minister Paschal Donohoe repeatedly underscored the theme of rising economic uncertainty, describing the short-term outlook as “clouded in uncertainty.” Notably, the U.S. Federal Reserve downgraded its economic growth projections this week, a concerning development given that the U.S. is Ireland’s largest export market. He emphasised the importance of investing strategically in infrastructure and public services while adhering to EU fiscal rules and strengthening Ireland’s economic resilience for the future.
Despite global risks, domestic challenges were at the forefront of the discussions. Minister for Public Expenditure Jack Chambers emphasised a targeted focus on infrastructure delivery, highlighting the ongoing review of the National Development Plan alongside efforts by the newly established Infrastructure Taskforce to identify and address barriers to implementation.
Climate policy featured prominently, with an emphasis on scaling up investments in renewables, energy security, and emission reductions. While most agreed on the direction, environmental groups called for faster action. Ireland’s dependence on imported fossil fuels should be highlighted amid geopolitical instability. Wael Sawan, the CEO of Shell Plc, warned this week that unresolved tensions in the Middle East could lead to spikes in energy prices, increased inflation, and threats to economic stability.
Furthermore, Minister for Enterprise Peter Burke underscored the need to boost productivity, drive innovation, and maintain stable investment flows. Stakeholders echoed these priorities, emphasising the importance of tax and regulatory certainty to retain talent and attract business. The urgency of these issues was reinforced this week by the release of the latest competitiveness rankings from the International Institute for Management Development (IMD), which saw Ireland fall three places amid signs of strain in productivity and investment flows.
Next Steps
Attention now turns to July, when the government will publish the Summer Economic Statement, outlining the fiscal parameters that will shape Budget 2026. At the same time, the countdown continues toward the EU-US tariff deadline, creating a challenging environment for framing October’s budget.
Compliments of Vulcan Consulting – a member of the EACCNY