Committee on Security and Defence Ordinary meeting
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SEDE European Parliament
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Francois Xicheng Wu
Thank you. The honorable Marie Aniesz Strach-Zimmermann, chair of the committee on security and defense. Honorable members of the SEDA committee, ladies and gentlemen. Good morning. Good.
Morning.
Francois Xicheng Wu
To return to Brussels and exchange views with the SEDA committee on development across the Taiwan Strait and on Taiwan Europe cooperation. This.
Speaker 4
It is an important moment to strengthen dialogue between China and Taiwan and Europe.
Francois Xicheng Wu
And the insightful visit this March. And, I thank chair Strecker Zimmerman for your vision and the leadership in making the first official say the delegation to Taiwan possible. The visit carried a great significance and sent a clear and powerful message. Taiwan's security is not a distant, regional issue. It is directly relevant to Europe's own security.
Amid growing challenge to the rule-based international order, our partnership is essential. Ladies and gentlemen, the challenge we face today is not merely one of competition. It is one of a systemic transformation. China is acting as a revisionist power. It is not seeking to operate within the existing rule-based system.
Speaker 4
It is seeking to reshape it fundamentally. Its objective is to create a new international environment in which access, participation, and rights are increasingly determined not by rule but by political alignment with Beijing. This is what I refer to as a construction of a new normal, a gradual but deliberate redefinition of what is considered acceptable behavior in international relations. This ambition is already visible across three interconnected domains. First, in the realm of international participation, we are witnessing the erosion of genuine multilateralism.
Speaker 5
China is effectively introducing a form of political gatekeeping, a system in which participation in international organization is subject to prior approval. Institutions that were designed to be inclusive and universal,
Speaker 4
Such as the World Health Organization, are increasingly influenced by political considerations imposed by Beijing, China. Taiwan remains excluded from this mechanism despite its proven capacity to contribute to the global public goods. This is not simply a matter of fairness. It is a matter of systemic integrity. When participation is conditioned on political acceptance by a single actor, multilateralism is no longer multilateral.
It becomes selected, contingent, and ultimately fragile. Second,
Speaker 6
is seeking to reinterpret the maritime norm in ways that undermine international law. The Taiwan Strait is widely recognized as an international waterway, yet Beijing is advancing the claim that foreign vessels must obtain its consent to transit. Naval vessels from multiple countries now face increasing harassment, monitoring and intimidation when operating in these waters. This is not accidental. It is strategic.
Speaker 4
China is attempting to normalize the idea that international waters can be treated as domestic space. If such claims are accepted or even passively tolerated, the consequences will extend far beyond the Taiwan Strait. They will affect every major maritime corridor in the world. Third, and most alarmingly, we are witnessing the expansion of this logic into the domain of civil aviation. This is unprecedented in peacetime.
Speaker 5
During a recent visit by president Lai Xingde to Africa, several countries, including Mauritius, Seychelles, and Madagascar, abruptly withdrew overflight permission for his charter aircraft under intense political pressure from Beijing. This represent a dangerous precedent. It signals that even civilian transit riders can be politicized and denied, not on the basis of safety or regulation, but as an instrument of geopolitical cohesion. If this trend continues, the neutrality of global aviation systems will be compromised, and the reliability of international travel will be undermined. Ladies and gentlemen, a world in which one country can determine who participates, who sails, and who flies is not a rules-based order.
Speaker 4
It is a system of controlled access, one that erodes sovereignty, weakens institution, and replaces law with power. In light of this growing challenge, Taiwan is responding with determination. We have increased our defense spending to 3.3% of GDP in 2026, demonstrating our complete commitment to self defense. At the same time, we are strengthening the whole of society resilience, enhancing civil defense, crisis preparedness, and infrastructure protection. Security is not only about military capability.
It is about social readiness. Taiwan is at the center of critical maritime routes, sustaining global trade and the supply chain. Over 60,000 container ships pass through in annually, far exceeding the 20,000 ships of Panama or Suez. A disruption in the Taiwan Strait would have immediate global repercussions. Moreover, China's expanding military presence reaching toward Japan, Australia, and beyond highlights the global and expanding nature of the challenge.
Speaker 5
As NATO's secretary general, Mark Hoot, has emphasized, the security of the Indo-Pacific and Europe are increasingly interconnected. Taiwan fully shares this assessment. Taiwan and Europe are bound not only by shared values, but by a shared responsibility and the interest to preserve peace and stability in the region. The next step is to turn that responsibility into action. This includes strengthening defense industrial partnership, protecting critical undersea infrastructure, countering hybrid threats, and safeguarding freedom of navigation.
Together, deceive and we. The question is not whether the international order will change, it is how it will change and who will shape it. The challenge we face is systemic, and the response must be collective. Peace and the stability across the Taiwan Strait are not a regional concern. They are a global public good. Defending them is not only Taiwan's responsibility, it is a shared responsibility, and Taiwan stands ready to work with Europe to uphold the principle that have sustained peace and prosperity for decades.
Speaker 4
After all, defending Taiwan is defending the international order. Thank you very much for your attention.
Marie-Agnes Strack-Zimmermann
Thank you very much, Deputy Minister. I will now give the floor to members for a first round of questions, starting with colleagues that participate in the mission. And we start with Nicolas Pasquale de la Parte from the EPP. The floor is yours for two minutes.
Nicolás Pascual de la Parte
Thank you very much, Madam Chair, and thank you very much, Deputy Minister, for your assessment and your remarks that I share very much. First of all, I wanted to convey my gratitude for the welcome that you delivered to us on the occasion of our visit to your country some weeks ago. I think that I can speak on behalf of everybody if I say that we were treated in the best possible way, and we felt ourselves at home. Thank you very much for your warm welcome. I think that obliges us to repeat the visit in the future.
Speaker 8
Concerning the points that you have raised, Petit Meisser, I cannot agree more. I think that peace and stability across the region is a public good that we have to preserve, and we have to maintain. And we know that now China is showing more assertiveness either in the South China Sea and the East China Sea with artificial islands, with revindications which are not sustained by international law, and especially where you have said the maritime international law, the UNCLOS regulation has to be preserved and abided by China, by everybody. I think that there, Taiwan has a very good role to play. And you can count on our support of the European Union and of my party in order to maintain the UNCLOS maritime international law and the free navigation through the Strait of Taiwan.
Addition to this, I think that we have to make clear that the only way to keep these DPs and stabilities is to abide by the international law concerning as well Taiwan. And here, I want, I know it is not our policy, but I want to reiterate, we're in favor of the status quo, and we cannot accept any unilateral change based on force and not based on mutual dialogue or mutual agreement. This is our position, and it will continue to be. On that, you can count on our unwavering support. And, again, thank you very much.
Speaker 5
Yeah. Thank you so much for your support, and especially you are mentioning the freedom of navigation in Taiwan Street. Again, I think the principal question is not to assist or to help Taiwan. We do have a common natural interest in the region. That is the stability and the status quo.
And it concerns the European interest very strongly. So hoping, we can do more to defend this stability in the region. But also, because Taiwan shares the common value with you, with European country, and we need to think about what kind of future we want to have. Taiwan is a model of the Chinese-speaking nation. So a democratic, Chinese-speaking nation, I think, corresponds also very strongly to the war that we are imagining here.
So, again, thank you for your support and hoping we can do more to defend the status quo and to defend also your national interest in the region. That is the Taiwan Strait.
Yes.
Speaker 10
Now much like my dear colleague, Nicholas De La Parte, I would like to thank all of the Taiwanese authorities for their hospitality during our mission a few weeks ago, and for giving us the chance to see the important reality that we have at the moment. I was looking at some data just a few days ago on May 2. The Chinese army carried out an incursion, a naval incursion, and also by air 29 aircraft, six naval vessels, and they were flying around the Taiwanese airspace. What I would like to ask you about is the current situation and how it is evolving. We're seeing that there is a permanent coercive model that is being installed.
And this is an old way of operating that China, rather China has, and has done this in different conflicts. It basically wants to make public opinion nor it wants this to become normalized in public opinion. So China is trying to redefine the international status quo through this diplomatic pressure that it is exerting on an ongoing basis. They're trying to impact the narrative. And, basically, this, of course, relates to UN resolution 2758.
So I'd like to ask you what scenario Taiwan thinks is more likely: a conventional invasion or perhaps a coercive, legally ambiguous movement, which is something perhaps which we are seeing at the moment. And once again, I'd like to thank you for being here and for answering our questions.
Speaker 5
Thank you very much. First, the 27 58 resolution in the nation in the United Nation doesn't mention at all Taiwan. So it's a Chinese normal status debate. The second thing, of course, we are afraid that China may conquer Taiwan in using a military way. But I think, China is still hoping to force Taiwan to surrender without making military action.
So in some way, they are intimidating Taiwan. So last year, for example, we have more than 5,000 Chinese military air fighters to make incursion in our I eighties. Way, they are trying to convince there is this kind of narrative trying to make you believe that Taiwan is part of China. So, we have this question, this debate of one China principle or one China policy. But, again, Taiwan is a sovereign country.
We still have 12 countries that recognize us. We are not part of China. So we need to avoid sending any kind of message to accept or to consider Taiwan as a part of China. Just think about Hong Kong. Hong Kong in 2019, before 2019, was still protected by an international treaty signed between Beijing and London.
But China, later, in 2019, destroyed the democracy of Hong Kong. It's because the world accept that Hong Kong is part of China. If we accept that Taiwan becomes part of China, then it immediately becomes a domestic problem of China, and we will have no way to intervene in this region. So, again, we of course, China claim that Taiwan is a very, is a core interest of China. But I believe Taiwan also is a core interest of the world, of Japan, of Europe, of the US, and of the international community.
So let us sit down to discuss the situation, to maintain the status quo. A negotiation between Taiwan and China cannot be accepted by a precondition. This precondition very often is referred by China to say that Taiwan needs, first of all, to accept that we are part of China, then we begin the negotiation. If we accept this precondition, then we have no more things to negotiate. So hoping that European country, your state European Union can continue to work with us, Japan, with all the countries in the region to defend your own niche own nation, increase the region, that is the status quo.
And if negotiation is possible, we cannot accept this precondition that Taiwan is part of China. Thank you.
Marie-Agnes Strack-Zimmermann
Thank you very much. And the next will be Martin. The floor is yours.
Speaker 13
Oh, thank you so much. I would like to ask start with a big thanks to the SADA secretariat and also the Taiwanese side for hosting us. And, Albert, you are there. You've made a really good job. Was one of the best-organized missions, I think.
Speaker 15
So thank you so much. I still remember what was said in the Ministry of Defence. We might have been attacked yesterday. Probably, we will have an attack tomorrow. So we are happy for every single day that there is a peace.
Speaker 13
It means that our deterrence works, and we need to strengthen it day by day. And I think this kind of mindset should also be adapted here in Europe. This culture of readiness in all society, in all of those society is something we could really learn from you. And this must be done not through the fear of panic, but in a smart, confident way and learning from experiences from both here in Europe and in Taiwan. I don't have a question for you.
I just want to thank you. Thank you.
Marie-Agnes Strack-Zimmermann
Thank you very much, Martins. Minister, it was really very important for us, and I think it's very important to see that the challenges, yes. Okay. But I thought yeah. Okay.
That the challenges are really the same like in Europe. I think this is a really big moment for us to realize what's going on. It was really, really interesting. So the next will be Pierre Romain. If you have a question or a comment, please, the floor is yours.
Thank.
Speaker 14
you. Now I wasn't lucky enough to take part in the mission, but I would have a question in reaction to the situation that you spoke about in terms of the activities of Beijing, i.e., limiting freedom both from a naval and an air approach. Now we've seen this course relates to civil aviation as well. Now taking control of these spaces where there should be freedom of navigation. Well, how do you think that new actions or new initiatives could be taken to reaffirm this freedom of navigation in the Strait of Taiwan, but also in your airspace? The naval missions for freedom of navigation, I mean, this is something that you should do more often?
Speaker 5
Is that enough? How do you see how we can really defend this freedom of navigation today? Thank you for your question. Now we often see war vessels in our waters, for instance, coming from Europe, France, Germany, etc., the Americans, the Japanese, Canadians, the Australians. And I think this sends an important message, an important message to China.
The Strait of Taiwan enjoys freedom of navigation. It is an international street, and China does not have the monopoly on this area. The Strait of Taiwan is one of the most important in the world. Now we've heard about Panama, Suez, etc. But there are more than 20,000 vessels passing these kinds of straits yearly, but in Taiwan, in the Strait of Taiwan, it's 60,000.
We have the war in Ukraine and Iran, and we should not have another war in the Strait of Taiwan. More than 95% of the most sophisticated semiconductors pass through the Strait of Taiwan. That means that if there's another war there, then that would impact the semiconductor supply chain. So I've repeated this several times. There is a European interest that the status quo is maintained in the region.
And it's not just about sending vessels to the straight, but we also must be very mindful of the language that we employ. We should not accept the narrative that Taiwan is part of China. If we're forced to talk about the one China approach, well, this is something that we should define, much as Germany did in the past. So China is important, but so is Taiwan when it comes to maintaining the international order, and that's something we must be very clear on. I think that through diplomacy, we still have space and air to maintain the international order moving forward.
Marie-Agnes Strack-Zimmermann
Thank you very much. And the next we, Melia. The floor is yours.
Speaker 16
Thank you, madam chair. Thank you, dear minister, for participating in our meeting today. I didn't participate in the trip, but I fully support from Finland. I'm a Finnish MEP, and I fully feel the situation living near the Rasa, how it feels when there's a narrative, historic narrative that you are part of them, not still an own existing country. And for me, it's definitely the basis of diplomacy, but also get us the knowledge, the information, all what is needed.
But what I want to ask is that, is there some forms of cooperation which we could enhance the maritime security at this moment and also in the future? And are there existing or potential mechanisms that could help build the confidence and prevent escalation in maritime domains when you look at that part? Thank you.
Speaker 5
Okay. Thank you. Certainly, we still have a lot of possibility to cooperate on a maritime issue. But I think it's much more between Taiwan and the European countries with Japan and the USA because it becomes more technical, and we don't have any precondition. The problem between Taiwan and China is that now for any discussion, they always put a precondition that Taiwan, first of all, needs to accept that we are part of China, then we go to political discussion or technical discussion or even immigration, other issue.
And that makes a problem for us. If we accept that we become part of China, then we immediately become a domestic problem. I just mentioned it several times. So, what we do hope now is hoping that with European countries, we use USA, with Japan. For example, now we have this problem of submarine cable that has been regularly, I mean, touched by this suspected vessel from China to try to destroy our external communication.
It happened in our region, but it also happened in your region. So maybe we can try to form a more this kind of commission, this type of technical cooperation to avoid this kind of destruction of the submarine cable, and this is very important in our modern life. So we need to create all this possibility to work on a technical issue, and I think you are mentioning a problem. I think we will be able to find a way to deal together.
Speaker 21
I was lucky enough to go to Taiwan in January. And I've got a question about what's happening in Ukraine, in Iran. Is China going to take advantage of this to assert control over Taiwan? Now we can talk about this kind of Anaconda strategy, slowly but surely strangling Taiwan. Now you stressed that Taiwan produces high-performing semiconductors, and it's one of the only countries that can do that.
Speaker 20
Silicon Valley is very dependent on those semiconductors. Furthermore, I'd like to know if you have any other relations with, for instance, Japan, Australia, New Zealand, that would allow you to offset the relations you have with the European Union?
Thank.
Speaker 5
Thank you for your question. I think that Chinese strategy is to try to strangle Taiwan, but I wouldn't say that it's painless, because it is quite painful. What's happening in the Strait of Taiwan? Well, they send about 100 planes every day to carry out air incursions, and we really feel this. So we try to do our utmost.
We work with you. We try to bolster economic cooperation. So that is why we really insisted on cutting out this mission in Swaziland. Now I mentioned the issue of semiconductors, and we control 95% of the most sophisticated semiconductors, but they're not only made in Taiwan. This is a result of excellent cooperation between Taiwan and Europe, including France and Germany.
The semiconductors that we produce in Taiwan is one square centimeter in which we have over a million different chips. But if we have the SMR, without the support of the Netherlands, for instance, we wouldn't be able to do this. If it were not for the technology of the Sizer Group in Germany, we wouldn't do this. Air Liquide has also increased investment in Taiwan. So as you see, this is a really international cooperation, and this is the basis on which we must continue.
Now Xi Jinping won't be there forever. So, for instance, we heard that they don't want German dogs going to China. They only want Chinese dogs, and then they want to export those Chinese dogs throughout the world. So this is just an example of how China wants to impact the trade balance throughout the world. So our approach to this international corporation is a successful one, and we think that that is the avenue that we should continue going down.
So we have lots of orders for the next few years for our semiconductors. The order books are full. So we're gonna continue working like that. International cooperation is essential. Taiwan is essential.
I think we have to continue to defend that, and we must try to counter this model that China is trying to impose, because China is not going to be able to block everything. And if we work together, we will do our best.
Speaker 22
Good morning, everybody. Deputy minister, it's a pleasure to welcome you at the SADA committee. I had a chance to participate in the mission organized by Michael Galler at the beginning of the year for the EPP Group. So during our stay in Taipei, there was a very hot debate within the parliament on the increasing defense spending. So could you elaborate a little bit on this?
What's the outcome of this discussion? And the second issue I would like to ask you is about the Taiwan US relations. We in Europe, in the EU, we can feel this paradigm shift which is taking place across the ocean. So could you confirm that the relation with The US as a partner of Taiwan is stable? And, also, you can depend on arms sales and the military support as it was before.
Thank you very much.
Speaker 5
Thank you very much. Okay. You are totally right. We do have a problem in Taiwan concerning the arms procurement. The government have very strong will to increase, even in the near future, to increase our budget of defender to five percent.
But the position leading by the KMT is not agreed about it. It is very shocking for us because the KMT in the past, you know, is a party of Chiang Kai-shek. And KMT, of the Chinese Communist Party. But we fear that now, they do have some kind of cooperation and trying to stop our own procurement. But, at the same time, you can find also inside the KMT, they do have a split.
The chairwoman, the leader, of course, of the party, is against the procurement. But those, you know, at the end of this year, we will have a very important local election. And those candidates, that now are running a campaign to be elected mayor, in general, they are all for, I mean, like, they have a position that is similar to the government to really continue the ARM procurement. So I we I have the reason to hope that in the future, I think we can achieve this ARM procurement, but maybe in a different way. But at least, I think we do have a very strong consensus inside the Taiwan society that we need to buy more weapons.
And I think this proposition made by the government has more than 60% of support by the Taiwanese people. So I think the KMT will be obliged to change their position in the future. Considering the Taiwan US relation, I think it's in a very stable situation because what we are doing in Taiwan is really to try to increase the common interest that we are sharing with the US. The same thing that I try to do or those people in Taiwan that defend the repair, the Europe Taiwan region tries to do. Meaning that, it's not a question of helping Taiwan.
It's because the US have very strong interest in the region. Just imagine if US led China to control our semiconductor industry, what will be the future of this region? So, for me, I strongly believe this shared interest that we are having with The US, the investment of TSMC in Phoenix, in Arizona, is the biggest foreign investment that The US never have. The same thing happening also in Europe, in Germany, in Dresden. This is the biggest broad investment that Germany never have.
So, I think in doing so, Taiwan is trying to make a closer our relation with the US, with Europe, with Japan, with Australia, with Canada, and hoping that the international community, again, can consider the stability, the democracy of the region, the status quo as a very strong national interest, then you will do everything you consider important to do to try to maintain the status quo. And I think, for the moment, it is the best way. We cannot wait until war occur. We cannot wait until China decides to conquer Taiwan. Then say, oh, what can we do to defend our nation's interest?
I still believe the mark the diplomacy secure corrective security is the best way to defend this piece of the region and our common interest for the future.
Thank you very much.
Thank you.
Marie-Agnes Strack-Zimmermann
It was really very important, and it's a great pleasure that you Yeah. Are here. Ambassador, we know each other very well from Germany. He speaks fluently German and not only normal, really literature and everything. It's really.
Yeah. It's
English speaking. We are very European.
Thank you. Thank you.
Marie-Agnes Strack-Zimmermann
Minister and ambassador, that you join us. It's a great honor, and it was the first time for you to be here.
To be here. Yeah.
Thank you.
Speaker 32
Okay. Thank you very much. Thank you, Margaret. I have something for you. Yeah.
Speaker 36
It's also brand your hand like that, easily. Like that. Yes. Thank you. Thank you very much.
Speaker 27
This is really interesting. Yeah. And so we have five minutes for all shaking hands. Good morning. Good morning, girls.
Nice to meet you.
Speaker 26
One wonderful. So coming from Taiwan to Canada, yeah. The warm up is very important relationships.
Speaker 28
Yeah. No. It's really yesterday, I was in Switzerland. They were also very Colleagues, please take a seat. So we move on from Taiwan to Canada.
Marie-Agnes Strack-Zimmermann
And for our next item, we will focus on Canada and in particular on our security defense partnership, but also as a briefing ahead of our forthcoming CDA mission. For this exchange of views, we have the pleasure to welcome Nicolas Brosseau, Ambassador of Canada to the Kingdom of Belgium and of Luxembourg. So first of all, Ambassador, welcome. Over the past years, Canada and the EU have continuously strengthened their relationship, including through the signing last year of a security and defense partnership. This really strategic tailored made framework aims jointly at addressing geopolitical instability, including Russia's war against Ukraine, and deepening cooperations across several areas, including crisis management, defense industry, collaboration, hybrid threats, and military mobility.
Furthermore, Canada is the first country outside Europe that has requested joining the EU Security Action of Europe, SAFE. I would like to kindly remind the colleagues that we will vote on this agreement later today during our joint meeting with ITRE, as it requires the consent of the European Parliament. Ambassador, we would be grateful if you could give us the latest on the security and defense partnership, notably ahead of the security and defense dialogue scheduled on 21st May in Brussels. We would also be grateful if you could brief us on Canada's priorities in the field of security and defense, including on the recently presented Canadian defense industrial strategy. So the floor is yours for 12 minutes.
Thank you, madam.
Nicolas Brosseau
Now, Madam Chair. It's a real pleasure to be here today. My speech is about twelve minutes, a little bit broader than the time you proposed, but I am sure we'll have the opportunity to dig into all those issues in the Q and A where we can have a more free flowing discussion. So, again, a big thank you for the opportunity to meet with you today ahead of your trip to Canada later this month, and we greatly value your committee's engagement, and particularly this visit. And we see your visit as an important opportunity to deepen our security and defense cooperation at a time of growing strategic uncertainty.
Speaker 30
And this moment is also marked by renewed political engagement from Canada towards Europe. And just last week, Prime Minister Carney appointed the Honorable John Jonathan Wilkinson, a multiple-time federal cabinet minister, as Canada's new ambassador designate to the European Union. Mister Wilkinson will be arriving in the coming months, and his appointment underscores the priority Canada places on its relationship with the EU and on sustained high-level engagement across our institutions. That renewed commitment has been demonstrated at the highest level. And if you follow the news, I'm sure you all do, just two days ago, the prime minister participated in the EPC summit in Yerevan.
Nicolas Brosseau
First time a non-European leader was invited to join the EPC. And on that occasion, he held substantive discussion with both president of the EU on deepening our cooperation and particularly in security and defense, and we'll come to this, paving the way for the next Canada-EU summit, which will take place in Canada in 2026. Prime minister also met with president Mazzola, where they discussed democratic resilience and the importance of parliamentary diplomacy, and president Mazzola also extended an informal invitation to address the European parliament in the near future. Taken together, these exchanges underscore both the maturity of the Canada-EU partnership and our shared strategic outlook as transatlantic partners. And the broader international context makes this cooperation all the more necessary.
Speaker 30
The global security environment is more demanding and more complex than at any point in recent decades, and the rule based international order is under strained pressure. Hybrid threats, cyber defense, and foreign manipulation continue to challenge democratic institutions. And, of course, Russia's war of aggression against Ukraine remains the central threat to European and transatlantic security. And in the Middle East, the widening conflict and severe humanitarian suffering are further destabilizing an already fragile international landscape. So, taken together, these challenges reinforce a simple but critical truth.
Close coordination among partners who shared the same values and commitment to international law has rarely been more important. Canada.
Nicolas Brosseau
and the European Union has long been natural partners. We share common values, but we also share our risks and responsibilities emanating from that relationship. During the summit in June 2025, we launched two strategies. First of all, the partnership, the new strategic partnership between the EU and Canada for the future. And also, secondly, a partnership with regard to security and defense.
So the relationship between Canada and the EU needs to be more focused on specific tangible outcomes. It needs to be more solid. Last autumn, we had a new nominated representative of the Canadian Prime Minister to represent our country in Europe. And what we need to do is ensure that we now implement all the commitments that we set out. The representative, Jonathan, will actually meet you tomorrow together with the Affect Committee, and we're very much looking forward to fostering that partnership.
We will also be following work carried out in the European Parliament and recently on the EU-Canada report. And we know that Canada is a solid, trustworthy partner that is also interested in deepening our relationship with regard to supporting Ukraine. Canada supports your analysis of events, and we're looking very much forward to implementing our thoughts on turning them into facts, basically. When the Prime Minister met in Yerevan, representatives of Ukraine mentioned that there was going to be a priority boost of fund coming in, and also said that Canada was very committed to supporting Ukraine, more than 16,000,000,000 since the start of Russia's war of aggression. Beyond the financial aid that Canada is giving, we also want to boost support for Ukraine in terms of unifiers, in terms of defense, and want to make sure that there are, well, there are more 40,000,000 forces or troops in Ukraine, which were going to help to be trained by Canada and by Canada's support.
So I think there is a lot of sustainable support that we can bring in, in addition to the European support. Also, have two PESCO projects, military mobility, which will facilitate fast deployment of forces of allied forces, and also logistic platforms, which will help operational programs. These commitments mean that we have long-term contributions to defense in Europe and also to reinforce the rule of law and bring support to all our partners, and that includes security and defense. And in the same spirit of close coordination, recent decisions taken by the European Union in terms of the 20th sanctions package against Russia and also support for Ukraine mean that we are seeing a lot of commitment, and the same applies to our side of things. We're also reinforcing our sanctions package, and we want to make sure that we are doing all we can to limit Russia's defense capabilities.
We also support you the Ukraine support loan. You can count on us as a partner. We are also looking at how Canadian defense capabilities, with the help of Europe, can come to the aid of Ukraine. We have joint production agreements that we're focusing on, and we can see that enhanced cooperation is very fruitful. We are attached to the rule of law, and we have to take a pragmatic approach to policies.
There are platforms that we have launched, and we want to reinforce the democratic resilience of Ukraine and also help partners who are subject to pressure. We also are interested in president Van der Leyen's announcement of a new EU security with regard to the 2026 horizon. We also want to make sure that we have a stable region, so we are doing all we can to aid it. Some of the most significant developments over the recent years was the conclusion of an agreement allowing Canada to participate in the Security Action for Europe instrument, SAFE. We are very grateful for the trust that the European Union is placing in us in opening this mechanism to Canada.
SAFE offers a stable framework for businesses to collaborate and ensure that Ukraine gets all the defense support it needs. And this applies to Canadian and European businesses. Nondiscriminating access to the markets and 80% of contracts reserved for Canada, which is unprecedented. Canada is committed directly now, side by side with Europe, and we will bring in all our expertise that we can to ensure that there is a rapid impact. This is part of the new defense industry strategy in Canada.
We are building our defense base, and we are diversifying our partners, and we are reinforcing our strategic autonomy. We are mobilizing all our defense system for research and development and small businesses, exports, supply chains being securitized, and we have very ambitious aims, which we are achieving. We are also looking at new tools to reinforce industrial resilience from a collective point of view. And we've got to work very closely together to ensure that we are, we can face up to the situation that we have now. We want to create the European Resilience Bank, which means that the chair will actually be in Canada.
There will be branches in Lithuania and other countries as well. We want to make sure that supply chains are supportive, particularly for European and Canadian small businesses. This is a complement to the European instruments such as SIF and the European Defense Fund. So I'd also like to say something about the principle of detection, deterrence, and response in the North. We have an alert system, improved mobility system, adapted infrastructure, and we also recognize and are grateful for Europe's support on fighting hybrid attacks, dual use aspects.
We're working very closely together with the member states of the EU to reinforce NATO, and we appreciate the increase in support from European countries to NATO projects as well. Also, Greenland, last week, I had an exchange with Gedi Katainen, who is the special representative, and we talked about the strategies that we could implement here. The Arctic countries have got to be at the heart of any security approach in that region if it's going to be realistic, if it's going to work. With regard to Ukraine, of course, we talked about this, and NATO will be a very strong component. Canada is at the head of the NATO brigade in Latvia, in Lithuania, I'm sorry.
And we intend to continue to focus on that. We are increasing our funding and support for investments to ensure that our defense capacities are modernized, and that we reinvest in Canadian infrastructure. I'd like to conclude by saying that as Prime Minister Carney said at the EPC Summit in Yerevan, although Canada is diversifying its international relations, we are looking towards our partners and allies in Europe, first and foremost. We have been sharing the same values for many years now, and we need a strong partnership between Canada and Europe that will bring more stability, more security, and more prosperity on both sides of the Atlantic. Thank you.
Marie-Agnes Strack-Zimmermann
No. Bad. I can join the really good Lennings. Great. So thank you very much, Ambassador.
I will now give the floor to the members for a first round of questions. Starting with the coordinators for two minutes each, and we start with Nicolas Pascal de la Parte from the EPP. The floor is yours.
Nicolás Pascual de la Parte
Thank you, Madam Chair. Thank you, Ambassador, for your reading out the wonderful situation, the state of play of our relationship between Canada and the European Union. I think that we are in, if not the basic one, one of our best moments of bilateral relations. Thanks to your vision of the governance and our vision. I think that would visit to Canada kind of come more timely because now we have the chance of going through all these items and the topics of common interest.
I think that our agendas were prepared in order to touch upon the points that you have raised, and especially those related to security and defense, obviously. In principle, we have this partnership, which is one of the most complete and comprehensive security partnerships that we have with our country. We can enrich this partnership. That's why we go there in order to see how we can reach, in practical terms, in operational terms, these partnerships. You have said already that you are participating, and it's right, in PESCO, in military mobility, also in the SAFE program. And you are giving an example to another country, which probably will be knocking at the door if there is a second program, SAFE II.
And I think that they are looking at you, how you are performing in SAFE, and you will be a reference for other like-minded countries. Our reason with Canada is very important for many reasons. We had no time to go across all of them because you have a fascist to the Atlantic, to the Pacific, and to the Arctic, to the three Hosseins. And one of our long-standing wishes here in the European Union was to have a status of observer in the Arctic Council. We know that now it's not operational because it has been blocked by Russia.
But perhaps for the future, you could consider if the European Union should have a kind of this status as an observer. We are talking as well with our Danish friends for that particular purpose. But it would be good for you also to look into that. Again, let's have a good trip, and let's go into the deepening and strengthening of our partnership in all the items that you have touched upon, especially in our common help to Ukraine. I wanted to raise this at the end in order to show my gratitude how Canada is contributing substantially to our fight, to support the fight of our friends in Ukraine.
Thank you very much.
Thank you very much.
Speaker 30
Thank you very much. A couple of points. Regarding the Arctic, we have submitted a robust contribution to the strategy. We were invited to do so. And I'm pleased to tell you that in that contribution, we are supportive of the EU becoming an observer to the Arctic Council.
So that is something, I think we all value now, more cooperation in the Arctic in general and the EU as an important contribution to make, and I said so to Mister Katainen when I met with him a week ago. On contribution to the security in general, we, I forgot to mention that we are also looking at an arrangement with the EDA. It's piloted by a ministry of defense, and that will open the door to more cooperation in some PESCO projects because some need to have an EDA administrative arrangement. And, I should say that, you might have seen that at PDAC, the big mining show in Toronto this year, the EIB assigned a letter of intent with the government of Canada to negotiate a framework agreement to be able to invest in critical raw material in Canada, which is a major advancement because this will allow us to work together on critical raw material, which is also the basis of many things we need to build together in terms of defense and the defense industry. So this is, I think, very promising.
Thank you.
Marie-Agnes Strack-Zimmermann
Thank you very much. And the next will be Tobias. He is not only a member of SEEDE. He's also standing rapporteur for Canada. The floor is yours.
Tobias Cremer
Yes. Thank you very much, Ambassador, for coming, Jean Nicolas. It's fantastic to see you here again. Thank you for these very positive remarks, which remind us that when all over in the news, we are talking about somewhat more volatile transatlantic relations, that's only half of the story, whereas the other part of the transatlantic relations is perhaps better than they've ever been at the moment. And that is really thanks to the close relationship we have with Canada, where we share not just the same values, but increasingly the same interests.
And it was very good news that the prime minister was in Yerevan and really put this signal there that we want to move from words. And in this respect, the report has been very clear. And once again, I want to emphasize the large majority with which it was adopted. It's not often that we can agree in the European Parliament with such large majorities on things, but on our deepening relationship with Canada, we can, and that's very positive news. But now we want to move to the actions.
So I have a couple of really quite concrete questions. One is really talking about the defense industry. I unfortunately won't be able to come to this visit this time, but I will actually be flying to Toronto tomorrow morning and have some of my own conversations. But I'd be really intrigued on your view how the cooperation is going forward, especially when we go down the supply chain, talking to small and medium Canadian enterprises, how they cooperate on the one hand with the integration that they have with the US market, but also how they are looking into Europe, especially as the US market is having its own problem given the war in Iran and the supply issues that they are encountering there, and where you see things going from there. And the second question is, really also on the coordination on a political level when it comes to security and defense issues.
In some ways, the Iran war could have been a case study of a Euro Canadian reflex where Europe has been trying to come with a common model, common language. And I'd just be very intrigued where you see the cooperation going there, how Europe and Canada, where you see the Canadian vision of that conflict and cooperation with the European Union liberating the Strait Of Hormuz and really cooperating on that as a case study of middle powers taking the initiatives? Thank you.
Speaker 30
Thank you so much, Obiash, and I wish you a very good trip to Toronto. Hopefully, the weather will be good. I mean, it's not snowing anymore. We're good. I'm very fortunate.
I should have said that. I came with a few staff here, of course, but next to me is one of the people who wrote the defense industrial strategy, Rebecca Hall, who comes from our ministry of defense. So I'll, I might ask her to add a few things. But I would say, first and foremost, we need to rebuild our own industry, and that strategy is about this. It's about rebuilding our capacities, but also partnering where it makes sense and partnering with trusted partners.
And for that, the EU is very much at the center of what we want to accomplish, and that's why we joined SAFE. And by joining SAFE, we knew that because the calendar was a little bit complicated and negotiation dragged a little bit in the fall, SAFE one, we'll see what we get for results, but that was not the idea was not just safe one. It's that to demonstrate that we're a credible and trusted partner for the European Union, that we want to do more things with you, and we want to build things with Europe. And so that's why we're also looking at negotiating with the commission on the ninety billion for Ukraine, because we see a value of having Canadian contributing to this and helping our Ukrainian partners and friends. But beyond that, there will be other funding mechanisms on both sides of the Atlantic that will allow us to build together.
And when I say that, I say for the whole supply chain. That's why I spoke about critical raw material, at the beginning. And so, I think the more integration there is, the better. We're not decoupling from the US. That's not the idea, but we're certainly diversifying, and that includes trade in general.
Speaker 39
I don't know, Rebecca, if you want to say something because you wrote it.
Rebecca Hall
Thank you very much. I yes. I would just say, of course, we have lots of small and medium-sized businesses, but that's a strength. We have niche expertise, and we're looking to integrate them into the European prime supply chains because we see that as being mutually reinforcing and strengthening the Transatlantic supply chain. We also have designated sovereign capabilities for the first time.
So those are priority investment areas for the government of Canada to enhance our strategic autonomy and reduce our supply chain vulnerabilities. And we're hoping to partner with key allies in those areas as well. So we would really like to see Europeans bring their strength to Canada, and Canadians bring our strength to Europe, so we just continue to drive that relationship forward to the degree that we can. Thank you.
Marie-Agnes Strack-Zimmermann
Sounds really good. So, Pierre Romain, the floor is yours.
Madame présidente.
Speaker 14
Thank you very much, ambassador. Thank you very much for being here today. I've been thinking about things, and I'd like to hear what you think. Namely, there is a bit of a paradox at the moment between the EU and Canada linked, of course, to the attitude of the new American administration, where there's a very specific geographical position involved in that. And there's an imbalance perhaps so that Canada doesn't maybe want to find itself purely face to face with the EU.
So is that why Canada is looking outside and coming to Yerevan, for example, to the EPC summit. That's important. So the idea would be to accentuate more the relationship with the EU, but they from the European side, though, for some months, we've had this desire to better protect the European Union, to set out a more European defense strategy, and there's mention of a European pillar within NATO. So I'm not suggesting that there should be putting on the brakes of any defense strategy. But there's a slight paradox because there's the specificity of Europe and its own identity, but Canada wants to diversify and deepen its relationship.
But as we, in the European side, even though we have current partnerships, we have a lot going down the line of more focusing on our European identity. How do you compensate for that dichotomy?
Nicolas Brosseau
I think that Europe and Canada have a similar problem. We've got to re-establish ourselves. We've got to reestablish our supply chains, and our defense industry has to tackle this in an intelligent manner and has to make sure that what we're not doing is creating a situation that is tantamount to protectionism. So it's at the same time the need to set out a new path for our industries, but also the need to cooperate together as medium powers. That's more than that.
But we need to, if you look at it individually, we are medium powers, let's say. We can join forces and be a stronger power. But what we need is to consider these issues. It's not a mutually exclusive situation. We all have an interest in working together and moving in the same direction to boost our defense systems.
That's this Atlantic pillar that includes Canada, of course, but also our Asian partners. We need to think about Korea, Japan. They are important countries that share the same values as we do and can have a useful input in this common defense architecture. So I would say that the temptation towards protectionism is something that is very risky indeed in the sense that, I mean, I would prefer to focus on cooperation between all our countries that share the same values and the same objectives or similar objectives when it comes to defense. Thank you.
Marie-Agnes Strack-Zimmermann
Thank you very much. The next will be Pedras from Warning News.
Vicius Ostovichis
Thank you, chair. Ambassador, most welcome to the Security and Defense Committee of the European Parliament. Indeed, but most important, I mean, the spirit of partnership, understanding, and the same reading of the security threats situation. We have more than enough in today's world. I do appreciate and welcome Canada's decision to join SAFE.
Well, still it's a kind of a financial instrument in this regard. But my question goes to your side. Is there any cooperation between Canada's respective institution and European defense agency. Are there any plans from your side, I mean, to establish more standing and effective cooperation partnership with the European Defense Agency, which is increasingly more competent and having more kind of mandate-based functions in developing pan-European, alright, I mean, defense capacity spectrum, products, and services. I think it could be a very interesting move towards this, I mean, increasing our cooperation.
And indeed, ambassador, we are looking forward. I mean, once the visit will come to Canada to establish standing relations with our colleagues in the Canadian parliament and to have them in person, to have, I mean, political ties more between the political groups. And I think, this kind of friendship and partnership is very important in today's world, which is still based a lot on fragmentation, and we need kind of integration among partners. Thank you.
Speaker 30
Thank you so much. Yes. Absolutely. I think exchange between the two parliaments are really fundamental. Parliamentary diplomacy plays an incredible positive role and has played that role for years in our relationship.
So we really welcome more exchanges between the two parliament. As I said, we're hoping that prime minister Cardi can address European parliament in the coming months or year. I hope sooner rather than later. On the EDA, yes, indeed. The our department of defense, I mean, I had a preliminary conversation with General Denk about a year ago where we decided that it would make sense to work on an administrative arrangement between the EDA and our ministry of defense.
This is ongoing. I'm hopeful we can conclude that by the next summit. We'll see. It's ambitious. It depends on the pillar we're working on.
And as you know, there are some areas that are more difficult to negotiate than others, but I think we see it, a, as essential and, b, very important also to join, as I said a little bit earlier, a certain PESCO project that requires such an arrangement with the EDA. So it's in our common interest, and it's also one of the goals of our security and defense partnership that we agreed on at the last summit. Rebecca, anything you wanna add on that?
Rebecca Hall
We see it as being very important. And, actually, we have cleared the first hurdle in terms of doing the analysis and responding to the questionnaire, and we're getting ready to submit that to the FDA. And they've advised us that this is a priority for them, and they intend to accelerate negotiations. And so we are very hopeful that by the end of next summer, we might be able to actually come to the arrangement. I would also nod that we're very interested in participating in some of these more ad hoc capability coalitions as well.
We just think getting in at the very beginning of the conversation, so we can discuss requirements at the same time, helps us further integrate our defense industry and position them for success in a partnership. Because if we're looking towards getting the same capabilities, then we're able to refine those requirements in a collaborative way. Thank you very much.
Speaker 13
Thank you. As a member of the European Parliament for Latvia, I would like to express my gratitude to Canada for your presence in Latvia. This year, we more than 1,000 new troops will arrive in Latvia, reaching the full brigade capacity, and this is a really remarkable result. So you already contribute to the security of Europe, security of Latvia. And thank you so much for that.
And colleagues, if you're ever in Latvia, please visit the new Canadian military base. This base was built in two years from the stretch, reaching full operational capacity, and this is really admirable result. My question is, you mentioned the investment bank who plans to open branches here in Europe to support Canadian companies. I was just, you know, listening in translation, so maybe I misled what this is about. So could you please elaborate a bit more on this?
Thank you.
Speaker 30
You're talking about the DSRB. Right? The Defense Security Resilience Bank? Yeah. Okay.
So the DSRB idea was around for a few years. And I think after the Davos summit and the visit of prime minister Frieden from Luxembourg to Canada, the two prime ministers agreed that we both face the same issues of a gap of financing of our SMEs. Banks have a hard time lending to defend SMEs, which are absolutely fundamental in the ecosystem. Primes have no problem accessing money. So there is a need to guarantee loan to banks, commercial banks, so that they can lend to SMEs so that we can build, rebuild our value chains in the defense sector.
So, Canada and Luxembourg took the lead in creating this new bank, which will be headquartered in Canada with an antenna in Luxembourg and Latvia and Romania, among other countries that were at the table of the negotiation, which concluded last week, will have antenna. So the idea is this bank will lend to commercial banks that are in the country's member of the DSRB. DSRB is open to all EU countries to join. They've now finished the negotiation of the charter. They will be around to see who wants to join.
The bank will be capitalized at 100,000,000,000 with 20,000,000,000 of capital committed and the rest callable, $8,080,000,000,000 callable. And the idea is to have a triple A bank that will land at triple A rates, which is to the advantage of many of our country's SMEs and banks, and we'll secure those loans. So it's really the core business of the bank will be to support SMEs in the defense sector, but writ large, not exclusive to Kinetic or something like that.
Marie-Agnes Strack-Zimmermann
So thank you very much. So now, Michal Czaba, the floor is yours.
Speaker 22
Good afternoon, Mr. Ambassador. I'm Mikhail Cerba from Poland, and my country will sign tomorrow the safe instrument agreement with the commission. So and, also, we are very happy, and we encourage Canada to join our common projects. So we are living in a volatile security environment. And, of course, the EU invests in security and defense partnerships.
I'm pleased to inform you that in February, the parliament adopted a report of our committee. I was a reporter for this on EU SDPs, setting a new path towards partnerships aiming at creating a common sphere, spheres of common interest. My question will be on SAFE because you mentioned this issue, but could you elaborate a little bit what is the main interest of your country in this program? So especially, what kind of projects you are interested in or you want to cooperate on based on defense industrial capacity and supply chain. So what kind of defense procurement are you especially interested in and you want to count on us?
Thank you.
Speaker 30
Let me start with some general comment, and then I'll pass it to you, Rebecca, so you, I think, have you brought your hand into SAFE. First of all, I would like to say, and, again, a big thank you to the European Union and the parliament for SAFE. I think it's a real success, and having us as part of it opens doors to even more collaboration. I think indeed we are looking in particular at Poland and Latvia for a certain joint project under SAFE one. We'll see whether there will be a safe two or other mechanism of some sort that we can continue to join.
And I'll let Rebecca elaborate on the latest on the projects.
Rebecca Hall
Thank you very much, ambassador. I would say that this is still very predecisional, which means it's actually with our minister right now. He is considering what we will be doing. But in terms of SAFE and our overarching objectives, we see this as absolutely critical to shoring up and deepening our defense industrial relationships. Poland is number one on our list.
Really, it helps support our strategic partnership agreement that we already have. It also confirms Canada's position as the lead nation for MSPO in September, which we are looking forward to. I know that there are lots of conversations underway, and there are some Canadian companies who have done a tremendous job in taking on colonization and creating factories in Gdansk, for example, in Kitato, yeah. Kitavitski. And there's lots of opportunities there, and we're looking to collaborate with Poland by helping to shape that relationship on the ground between Polish industry and Canadian industry.
And we do have some really excellent examples with Galvian, for example. We're hopeful with Ultra and a couple of others that were recently at the industry day held by our embassy in March. Lastly, I think I would just say that for Canada, we've not taken this approach to procurement before. This is a very new world for us. We often have very lengthy competitions, and we only signed the safe bilateral agreement two months ago, which hasn't given us a lot of time to determine how best to apply it within a Canadian context.
But what I would say is that we're very excited about the prospect of getting capabilities to the Canadian Armed Forces by December 2030, because that timeline is much faster than the types of timelines that we usually encounter within our procurement system. And so we're really looking at it with an eye to getting capabilities that we need on the ground, maybe not desperately, but, you know, with a maximum speed for the Canadian Armed Forces and to do that collaboratively with Poland. And, again, we're in conversations with Latvia as well, and I hope that helps. Thank you.
Thank you very much, Jose.
Speaker 10
Thank you. I'll be speaking in Spanish. I'm a member of the parliamentary delegation to Canada, and I have to acknowledge the fact that the last time we were there, we received information about surveys or polls in which many Canadians said they wanted to be part of the EU. So there seems to be this willingness to participate and to take part in the European decision-making process. I think that this transatlantic relationship between Canada and the European Union is very important.
I have two questions. One in the Arctic. Canada claims the Northwestern passage as its own waters, but there isn't a real operative monitoring system that is independent of Washington. So this vision that you have looking to 2030. So if there is a hybrid operation in the Arctic territory or if The United States were to carry out actions, I mean, how would you respond to this?
And focusing on the United States, it's true that the Trump administration is exerting pressure on Canada. I mean, asking for $61,000,000 for the Golden Dome, this US anti-missile system. And, really, it's calling into question the NORA architecture. I would like to ask you if Washington decided to make its cooperation in Nora conditional on something. I mean, does Canada have a plan b?
Of course, your relations with the EU are improving, but, I mean, we must not forget that the defense system is really led by the US. And, unfortunately, the administration is quite so. I'm just wondering what vision Canada has in the face of the new threats and the new situation, and how it's evolving. Thank you.
Speaker 30
I don't want to speculate on Canada-US relation, obviously. I prefer to focus on Canada, EU. The only thing I would say is for the Arctic, we are really investing heavily in the Arctic, including in the defense of the Arctic, and I think that is something that needed to be done for a long time. We, it's a great part of the effort that we will be doing in the coming years, and it includes also infrastructures, which is part, obviously, of the 1.5 or the 5%, as you all know. So I think this is really key.
It's also very key for us to work hand in hand with the indigenous population in Northern Earth that lives in that region, that populate that region. This is something I think that we've learned in recent years is an important part of this whole reconciliation process Canada has undertaken in the last ten years or even more. And then we see it as absolutely central on how we will further develop the Arctic, both in terms of its security and economic security. So that ranges from energy to kinetic defense of the Arctic. I'll stop there.
Is there anything you want to add on the Arctic side?
Rebecca Hall
Thank you for your questions. I would just say that mil cooperation between Canada and The United States remains absolutely excellent. Great communication, great collaboration. Nothing has changed. And then I would also say that NORAD is a binational command, and it is not US-controlled.
The commander of NORAD, who was actually just in Brussels yesterday, reports directly to our prime minister as well as to the US president. So we have no concerns with the Americans taking any action that we would not see. And then lastly, I would just say as well, in 2022, the government invested over 30,000,000,000 Canadian dollars into the NORAD modernization project. So what we're doing there is enhancing our domain awareness. We have the Arctic over the horizon radar, which is going to be in Southern Canada, but it will be looking north, and then there will be polar over the horizon radar, as well as an extensive set of new sensors from space on the ground and subsurface as well.
So we are taking our national defense very seriously, and we're definitely strengthening our defenses in the north. Thank you.
Marie-Agnes Strack-Zimmermann
Thank you very much. And last but not least, Christophe Gomard.
Speaker 21
Thank you very much, ambassador, for your presence. I'm delighted that cooperation is getting closer between the EU and Canada. My first question has to do with SAFE. Now participation is an excellent thing, but the Canadian defense industry is very closely tied to the US defense industry. Now I'm in favor of the European presidents, so we're working with you.
But if we work with you, we're working with the Americans. And given that relations are somewhat tense now, I wouldn't like European money funding the American defense industry. This might seem to be paradoxical, but they may well. I'd like to know whether about US purchases of EU defense production. Secondly, on cooperation, EU Canada, how far do you think we can go in the space area, this which is the future? Thank you very much.
Nicolas Brosseau
Let me start with space. There's prospects for extensive cooperation on satellites, and we've had discussions with Luxembourg, for example, but not only also France, Germany, and so on. We're developing new launch capacities in Nova Scotia, which could be used for European satellites as well. So there's a lot of possibilities opening up, and our agencies are working closely together and have been for some time on SAFE. The basis of our new defense industrial strategy is in building sovereign Canadian capabilities independent of others, but with key partners in Europe.
It is indeed true, as you say, in the past, our defense industry has been quite small and very closely tied in with the U. S. Defense industry, but that's not the objective in our defense strategy now. Within this new strategy, cooperation with Europe is important. For example, the bomber developed with our German partners and Saab.
Then in niche areas as well, the Canadian defense industry is developing. Would you like to add something?
Nicolas Brosseau
that's the way to look this, and that's why our relations with the EU are so important.
Marie-Agnes Strack-Zimmermann
Thank you very much. It's really interesting and so important. And, you know, we have already a discussion about the European Union to open it for Canada, to write again history.
Thank you so much.
Marie-Agnes Strack-Zimmermann
It's really important, and it's really interesting also for other countries to see how close we are. And it's a very big and important sign for everybody. You know what I mean.
Speaker 30
And you do know that the prime minister has very ambitious great ambition for this relationship. So I think, you know, it will only grow in coming years, and we will get more and more closer on all aspects. So I wish you a very good trip to Canada. Yes. And if we can be of any help to support this visit, of course, we will work with your delegation in Ottawa.
Marie-Agnes Strack-Zimmermann
You always you could help. And maybe we have ten minutes left, and then we could already need your support. Absolutely. So thank you very much. We have just a short break, and then we will continue with the, sorry?
Speaker 43
Yeah. With this Ukraine support loan. So thank you very much, Ambassador. Thank you very much. Today, it's really so, colleagues, we continue.
Marie-Agnes Strack-Zimmermann
Please take a seat. The next item on our agenda will focus on the defense pillar of the Ukraine support loan. For this item, we have the pleasure to welcome Harald Rutas, Deputy Director General of DG DEFIS at the European Commission. Last month, the council finally unblocked the implementing. Sorry, colleagues, maybe okay, thank you very much. For this, I guess, last month, the council finally unblocked the implementing decision necessary to start disbursing the much-needed loan to support Ukraine's most urgent budgetary defense needs due to Russia's continued war of aggression.
As you all know, this loan is divided into two pillars: €30,000,000,000 to macro financial and budgetary support, €60,000,000,000 to support Ukraine's defense industrial capacities and procurement of defense products, as well as building closer links with the European defense technology, technological and industrial base. So during this exchange of use, we will only focus on the defense pillar of the Ukraine support loan. And Mr. Rutas, we would be grateful if you could explain the next step in the implementation of the defense pillar and what will be the priority areas to bolster Ukraine's military and defense industrial capacities. We would also be interested in knowing if any derogations have been requested by and granted to Ukraine regarding the use of this loan.
So the floor is yours for 12 minutes, and then I'm sure there are questions. Please, the floor is yours.
Harald Rutas
Dear chair, dear members, ladies and gentlemen, very happy to be with you and to be able to focus on this Ukraine support loan instrument here briefly. Indeed, as you said, the instrument has been deblocked recently and now is going forward very fast in its implementation. Indeed, there are two parts to this instrument. The one part, which is a support for the overall functioning of Ukraine, and then a bigger part is voted to the defense leg of the Ukraine support loan. We think it's a historic achievement that has been achieved, really something special to see that, we are for the first time ever through enhanced cooperation giving support to a country at war, and that we are really now backing loans from the union budget.
Anne Rutten
Through the Ukraine support loan, we will provide, so around 60,000,000,000 to the defense pillar. And, we have not been waiting for the final unblocking because, in fact, the regulation that is dealing with the defense side was already approved earlier on, and we could start to work ahead already until the unblocking was there. And indeed, we have approved on the commission side a first product schedule, as it is called, through a meeting with our expert group and the committee of member states, which is devoted to drones and counter drone systems, for a volume of around 6,000,000,000 out of the 60,000,000,000. And that decision, by the commission, is now going to be implemented in practice because we are working towards the disbursement. And so here, we are still, let's say, going through a number of administrative steps such as the signature of the loan agreement with Ukraine, which is still outstanding, and the putting into place of this special dedicated account, the bank account that is also ongoing.
Speaker 44
And these all will allow that the money will start flowing in the beginning of end of May, June. We are, of course, then having still an amount available for 2026 and 2027. So if you see the billion and you split it over the two years, EUR30 billion amongst each year approximately, with the first EUR6 billion gone to drones and counter-drones, then there is still an amount which is more than about EUR22 billion left, which we now will have to put into place as quickly as possible. We are going to try to do that with the support of all member states and Ukrainian counterparts, and focus on the systems that they need. I mean, it is very clear that regulation says that Ukraine has to come forward with a request for product schedules and that we will assess those together with the member states, approve them, and then make, of course, the money available.
Anne Rutten
The systems that Ukraine is focusing on, and there's no secret here, I think, are very well known to all of you. So drones and counter drones, there will certainly be a second product schedule necessary above the $6,000,000,000. And particularly, as Ukraine is also developing, for instance, things like deep strike drones, etcetera. Then there is a well-known component on ammunition, which is needed also in the new warfare. Still, a part of that is dedicated also to ammunition, a smaller part only. And then there are two other, let's say, product schedules that we expect and that have been publicly also, let's say, made clear to all, which are missiles, deep strike missiles, and air defense.
Speaker 48
And in particular, this last, of course, product schedule is one that is really needed in Ukraine right now. You are aware of what is happening over the last days in Ukraine. Air defense is the area that also still needs to be ramped up very fast. So these four areas, we are expecting product schedules for. We are waiting that Ukraine will come forward during the month of May with these product schedules to the Commission and the member states.
Anne Rutten
And then we'll have a debate as foreseen by the regulation and the expert group. And when needed, we go then to the committee if that would be. You are aware that we have a regulation which foresees primarily to procure from Ukraine and EU defense base, but that there is the possibility in the cascade to also go outside of the EU when needed. But that is a clear cascade, which is in the regulation in article thirteen five, which foresees such a way of working. It should reinforce the cooperation between Ukrainian and EU defense bases.
It should thereby also enhance, I would say, the investments in the longer term for the future so that these can grow together and that is more, let's say, common procurement, also more standardization across, and that we thereby deliver for Ukraine. I think, dear Chair, that I will leave it at this, let's say, here at this moment in time. Thank you.
Marie-Agnes Strack-Zimmermann
Thank you very much. So now I give the floor to members for a first round of questions, starting with the coordinators for two minutes. So, Nicolas.
Nicolás Pascual de la Parte
Thank you, Marcia. Thank you very much for your reading out of this Ukraine support loan that has been disbursed. I have a couple of questions. First of all, is that we know that this EUR 90,000,000,000 loan was only two thirds of the real budgetary needs of the Ukrainians, while the other one third of 35,000 million euros was supposed to be covered by the members of the G7. Do you have any kind of coordination with our colleagues of the G7, or are they doing their own job without any consultation or coordination with us?
This is the first question. The second one is, what kind of mechanisms of surveillance we have in order to ensure the European preference that you have raised, which is very important for us? We know that there is an exception provided for in this loan to acquire non-European products if necessary. But what kind of surveillance or control system do we have? And third question, given the real success, the recent success of the SAFE program, which was exhausted after a few weeks, can you see on the horizon a SAFE II program?
Are you already talking about that? Because I am listening, that it could be a possibility. Thank you very much.
Anne Rutten
Thank you, Miss Pascal. But very happy to reply, indeed, the USL Ukraine support loan is not, let's say, covering the entire needs of Ukraine. And, we are always stressing that this loan should be additional to the other efforts that are made. Efforts that are made, for instance, in the framework of Pearl, in the cooperation between bilateral support and NATO to Ukraine. And we are having indeed coordination mechanisms so that there is no, let's say, overlap or competition between the instruments, and that there is good coordination and cooperation.
For instance, we work very closely together with, of course, our external action service that is always in the meetings with us. And that is guaranteeing that, for instance, the Ukraine support group that they have, the UDCG, that they are informed of what is happening under the UASL and vice versa, and that there is an optimization of this, let's say, additionality that we would like to achieve. So, I can just confirm that this is happening in real time. We are also having regular meetings with NATO. We're also having regular bilateral meetings with member states that are providing certain schemes of bilateral support.
The mechanism of surveillance of the EU preference is embedded in the regulation. So in order to go to the cascade and to go outside of the EU, one first needs to observe what can be procured within Ukraine, the EU, and the EFTA states. And there is only the possibility to go outside if certain criteria are met. Therefore, there needs to be, for instance, a higher volume that cannot be met by the EDTIB or a speed that cannot be met by the EDTIB. We cannot leave, of course, Ukraine unprotected.
So if Ukraine has certain needs where we need to go outside of the, let's say, this framework of Ukraine and EU, then the mechanism is there. But it will be tightly observed through the mechanism of Article 13-5. And the member states will have a view also that they can then confirm that these products are available or not available. And this mechanism, we will see over the coming months working in practice, and I will be happily reporting back to you in the future sessions. On the SAFE program, indeed, this month, we'll see the signatures as of this week, in fact, of the SAFE loans happening over the coming weeks in accordance with also the national prerogatives because certain SAFE programs will need to go to a national parliament, for instance, so they are not all on the same date.
We are signing them as they come. And we will see thereby the deployment of these €150,000,000 over the coming months. There will be a smaller little envelope which will not be used due to, let's say, the work of member states' national plans. We will have to define what will happen to this little remainder of SAFE one. SAFE two is not, let's say, at a study phase at this moment in time because we first need to deliver on SAFE one.
And if we see that it works indeed very well, and I hope that we can report to this house soon because we will have a first yearly report coming, and we'll happily come to you, missus chair, to present that yearly report so that you can see how SAFE has been delivering, and then we can see if there is need. Of course, all the, let's say, developments which are going around us would stimulate at least the debate about SAFE 2, and our president has mentioned it once in a public appearance. We will see at a moment in time when the, also the framework which is around us, the wider framework will be getting more clear. Thank you.
Tobias Cremer
Thank you very much. And I'm very glad that we have this €90,000,000,000. It's desperately needed, as you mentioned, because in some ways, this is not about bureaucracy and fulfilling the criteria in Ukraine. They are fighting right now also for our security. So it's good that we moved ahead with that. I have two questions, though, quite concrete.
One is that when the council finally agreed to have the €90,000,000,000, it was very clearly said that at the same time, there should be steps made to look into how the Russian frozen assets can be used in future to, if necessary, pay for this debt. And I would be very intrigued to see, to hear from your assessment how much they are making good on that promise. How far are we in these concrete plans? And the second question is also with regards to the derogations, because I think it's very good that we have these derogations because Ukraine needs the means to defend itself now, and it's very good that they have clear criteria. But from what we've been hearing so far is that the member states have been, on the one hand, very reluctant in granting derogations even where it's very clear that some products or some parts in the supply chains are not even produced in Europe.
So it's clear and still they want more bureaucracy, more information from the Ukrainians. And then on the other hand, member states have been very reluctant to actually give the information of what they can produce in the industry. And I'd be very much intrigued to hear what you can also do from the commission side to push the member states to be clearer on what are the barriers to allow procurement from the derogations when it's clear that we can't be producing. And on the other side, what are the barriers to saying very clearly this is what we can produce, and this is what we can deliver because we cannot wait and Ukraine cannot wait for that in the long run, especially as we are seeing that even external procurement is becoming more difficult, as for instance, the Americans have used up most of their air defense missiles, etcetera. So that would be my question: how can we move the pressure to the member states to actually do what they have said that they would be doing and do so quickly?
Anne Rutten
Thank you, Mr. Kremer. And to these two questions, I think, are very valid as well. The Russian frozen assets have been the object of debate since last year, when the first proposal was really going to that solution. We saw that it could not be unblocked at the end of last year, and the commission then acted very swiftly in order to find this solution through the Ukraine support loan. We fully agree, think, and we all concur in this room that we couldn't wait any longer.
And the commission made a proposal within two weeks. It was agreed in record time. We were immediately starting also on our side in defence, putting into action of that agreement on the regulation on the UASL, not waiting for the final turnaround on the MFF proposal. So indeed, we are simply into delivery, not into long talks. The long talks on the Russian frozen assets will come again.
I cannot predict this. This is not at my pay grade, and I think that nobody can really predict where this discussion will be going. What is really crucial to all of us is that we help out Ukraine in the short run. And this is what we are doing. And the first, let's say, product schedule on drones and counter drones, everybody was agreeing that the delivery thereof could only be done through the Ukrainian industrial base.
There was simply not the capacity of production within the EU. The second one on drones and counter drones, there could be capacities in the EU, meanwhile. And so I expect that the second one will be more mixed. But in the first one, we have, of course, also to respect the regulation. And as there are quite a number of components which do not come out of Ukraine, but which Ukraine buys from third countries, we even need to vote on the delegation within the first schedule.
This was not a vote like it's coming from other countries. There were components coming from third countries. I can tell you there was no problem. All member states understood, and we could vote in one go. So there is no bureaucracy here.
If we go to the second round now with these four product schedules that I told you, I expect that the debate will be more intense, in particular with air defense. You are aware of the situation. Products nowadays also come from within Ukraine. They are developing their own air defense. Clearly, within Europe, we have a lot of products in all the different ranges of air defense: short range, mid range, long range.
So we need to be very careful together with our Ukrainian counterparts that we put together a product schedule that would reply to the ambition of this regulation to jointly develop the Ukrainian and EU defense bases, and only in the exception go outside. I expect that it will be necessary because there will perhaps not be sufficient production yet. But we are working hard in DG DEFIS to also ramp up production. That's what we do under the EDIP program. That's also what we can do with the Ukraine support instrument under EDIP.
And so we hope that in the future, we are developing in the right direction, that we become more independent in Europe and that we do not have to order from third countries. But I expect that we will have to mix, because we cannot leave Ukraine undefended. So there will be a mix, and there will be some products, possibly. Again, this is not, let's say, what we decide. Ukraine will put forward the schedules.
We, together with the member states, the expert group, and the committee, will assess what Ukraine will really be requesting. And in this way, we hope to develop it. And it's certainly not going to be bureaucratic. It is rather to be pragmatic and to find solutions very quickly. Thank you.
Marie-Agnes Strack-Zimmermann
Thank you very much for the ECR, Alexander. Please. The floor is yours.
Alexander
Yeah. Thanks, chair. So first of all, the ECR welcomes that, the 90,000,000,000 alone is finally unblocked, and we appreciate that now we are moving fast towards the implementation of this 60,000,000,000 part for defense. I do have two questions related to the implementation. First, you mentioned the drones and anti-drones rightly.
Speaker 50
My question is about the ammunition, because it was another area which was broadly used. So whether you expect the ammunition to be delivered to Ukraine? And secondly, you know, I do not like to contaminate our debates with the domestic political masses, but I think here it needs some kind of clarification because the newly appointed Czech government has applied the policy. You know, they did not block the loan like Hungary, but together with Slovakia, they said that they are not going to guarantee the loan despite our strong criticism at home because we see this as not very responsible policy making. So prime minister now was meeting president Zelenskyy in Yerevan a couple of days ago, and he's talking at least to our domestic audience, I mean, the Czech guy, that they are planning to use this 90 or 60 billions for the ammunition delivery.
And the fact is that both Czech Republic and Slovakia as the producers of the ammunition were very instrumental in the past in the various initiatives. So here is my question. Where are we? What can we expect? Whether you can clarify what we can expect.
Sorry for, you know, doing this, but I think for the matter of clarification, it's important. Thank you.
Anne Rutten
Thank you for these questions. On ammunition, it's very clear that Europe has the capacity in this area, fortunately, because we have been having the ASAP program in the past for ramping up the production of 155 ammunition. And we see that the ramp-up of the production did work out well. So we have nowadays in Europe a production that can meet the needs. We will perhaps have to prioritize some of the production for Ukraine.
So there will be some measures to be taken. But we believe that this is possible on the ammunition side. And Ukraine, of course, is in particular demanding certain pieces of ammunition. There are those pieces which are not necessary anymore because the warfare has changed. So they need extended range because of this, let's say, type of warfare that we see now.
But we can be delivering on those. The Czech initiative, as it was called, has been very instrumental over the past to help Ukraine. And, we will have the schedule from Ukraine, possibly referring to it, but it will have to respect the regulation. I mean, the regulation is very clear that we have to have the cascade, so it can only be ammunition in the first place coming from Ukraine or the EU, the EDTIB, and only thereafter from outside. And in that way, we would be also assessing anything that would be done from this Czech or Slovak, industrial basis.
There is one thing that I think is very clear and that you are aware of. Of course, Hungary, Slovakia, and Czech Republic are not supporting the loan as such, but the industrial bases are not excluded because we have to be very pragmatic. We need to be able to help Ukraine in order to be able to defend itself. And, we will see in the schedule that will be put forward in how far these will be taken into account or not. It's too early to tell you, and we will see what will be happening.
But I think that I have been very clear in my reply, and this is the way how things lie at the moment. We'll see very soon what will be in the schedule proposed. Thank you.
Michael Gahler
Thank you. My question goes in a direction concerning the cascade that you referred to, which is well in regulation. But my question is, what is the timeline that the cascade affords? And is it not delaying things? And my precise thing is when it comes to the production of Ukrainian drones, they need Chinese components, and everybody knows it.
So how long does it take the cascade to accept it? I mean, it's the practice already. They use it, they need it, and there is nothing available on the European Union side in our area. So what can that then de facto become a theoretical discussion and be bypassed in practical terms? That's the one thing.
Speaker 53
And the other, I hear that the first 5,600,000,000 has been approved already, and they asked for a second thing. What can we expect when that will then be paid out? Thank you.
Anne Rutten
Thank you, Mr. Galar. The timeline for the cascade is very practical. We have already gone through it the first time when Ukraine was proposing this first schedule on drones and counter drones. As there were components, as you said, coming out of China, we had to ask for the approval of the committee to allow that. But as all member states were aware that there was no other possibility than that, it was, of course, in sync with the regulation and, thereby, could be approved in full confidence by the member states.
So this has happened the first time. We are observing and, of course, also in all discussions, in all other instruments that we are having, we are trying to reduce the dependency on Chinese products, batteries, motorization, navigation tools, etcetera. And this is happening over time in quite, let's say, a meaningful way, where the first, let's say, drone generations in Ukraine were 85% dependent on outside components. We are now going towards less than 50% dependency. And we are quite sure that in one or two years, we will be below the threshold of 35% dependency.
So this is moving in the right direction, also through EU components mainly. So if there are future schedules, we will be able to report to you in the future. We expect 4 of them. And I do expect that the cascade mechanism will have to be called in again. But as I said also in previous replies to mister Kremer, this is going to be very pragmatic.
I mean, there is no choice. I expect that, of course, in 2027, for the 30,000,000,000, we will have evolved, and there will be more offer, and there will be, again, another discussion. But we will always respect the regulation and deliver in that way. Thank you.
Pedraz.
Vicius Ostovichis
Thank you, chair. I have two points, Mr. Rutten. Firstly, knowing that, indeed, defense I mean, military situation is very tense and Ukraine needs now. I mean, probably more than it might need in future. So to what extent is this principle one twelve, one six?
Because, I mean, now we are in the midst of '26. But can we presume that this principle will not be applied? I mean, Ukraine might request as much as possible, maybe two thirds in the first two months of, let's say, June, July for '26 and fewer things for later of this year. The same in '27. I mean, the more in the beginning, and less for the rest of the year.
I mean, can this principle be or will be applied? And my second point, let's presume the situation which occurs. As 27 member states, for example, place a proposal for drones for Ukraine within this loan, but there are 24 who provided a guarantee. Will there be any preferential kind of category if the drone is the same color, is the same distance to fly, same mechanics made? I mean, sorry to say, but those countries guaranteeing. And if the country from a member state guarantor comes with the same proposals.
And Hungary, which is not a guarantor, but providing the same proposal, will be any preference from that one with a guarantor kind of attribution.
Anne Rutten
So, Vicius, thank you very much for your questions. On the balance between 2026 and 2027, we have this financial strategy that has been agreed now with Ukraine, and it foresees that we have an equal split between the two years now initially starting. Of course, you will see some front-loading very clearly. So the €30,000,000,000 I expect to rather go now already out fully in June, possibly, to be confirmed, of course. Why?
Because it also takes time afterwards for Ukraine to procure and get all the products it needs. So, there is a logical and understandable front loading of the 30,000,000,000. Of course, then also comes the question, what do we do with the 30,000,000,000 in 2027? And I could just expect that also in 2027, you're going to see the same front-loading. There could be even a question beyond, as you are also suggesting.
Perhaps there should be some front loading even from '27 to '26, because of the time of procuring. So I think that question will come. It's not there yet. Ukraine would have to revise its financing strategy. There would have to be a number of steps taken, and then it only can happen.
But it is not excluded as such. I think we will have to see over time. With regard to the guaranteeing countries and the products that will be requested, I mean, will come forward with its schedules and will ask. And Ukraine can, of course, make such a discrimination on their side if they wish to do so. We need to respect the regulation.
The regulation foresees that the industrial base of the 27 member states is included, just as the one also of Norway and Ukraine, in the first part of the cascade. So we are not there to steer from our side, but I think that Ukraine can steer from their side, of course, in the way that they will order the products. But pragmatism will perhaps also prevail, because we also need to be able to be realistic and to see how the necessary products can be available for Ukraine. So we'll see over time whether that will have a bearing on the schedules. I cannot predict this, Mr.
Ostovichis, at this moment.
Marie-Agnes Strack-Zimmermann
Thank you very much. Any other questions? No. Thank you. Not now.
I'm sure we have a lot of questions, but it sounds definitely better than a few weeks ago. So thank you very much for your time, and we are really looking forward to that you come regularly to us to tell us what's going on and that everybody has a possibility to ask a question. Thank you very much, sir.
Thank you.
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