An Israeli state-owned defense company is benefiting from millions in European defense funding, despite its direct involvement in the Gaza conflict. Investigations by Investigate Europe and Reporters United reveal that Greece-based Intracom Defense—acquired in May 2023 by Israel Aerospace Industries (IAI)—has received at least €15 million from the European Defence Fund (EDF).
The EDF was created to bolster EU military capabilities by funding innovation within the bloc. However, a legal clause in Article 9 of the EDF regulation allows non-EU ownership if certain guarantees are provided. These guarantees are approved by the host country—in this case, Greece—and are supposed to ensure sensitive information remains protected. Despite IAI owning 100% of Intracom’s voting rights, the Greek company is still eligible for EDF projects.
Intracom Defense is now involved in 15 EDF projects, seven of which were awarded after its acquisition by IAI and the October 2023 escalation in Gaza. One major project, Actus—a €59 million four-year drone program—lists Intracom as the lead coordinator, with €42 million funded by the EU and co-funding from seven European defense ministries.
IAI is well known for manufacturing Heron drones, which the Israeli military has deployed in Gaza. This link raises concern among MEPs and human rights groups. “If you were to accept the logic of the EDF as a European programme, entities controlled by a third country… should be excluded from funding,” said MEP Marc Botenga.
The European Commission maintains that Intracom meets eligibility through Greece’s guarantees, though the contents of those guarantees are not public. A Commission spokesperson said evaluations are based on ethics and legal compliance, and not political events. But critics argue the self-certification process is too weak for defense projects with humanitarian implications.
Amnesty International’s Aymeric Elluin criticized the partnership: “On the one hand, we have a state [France] that denounces violations of international law and, on the other, it is prepared to collaborate with a company that is owned by the Israeli state.”
Human rights groups, including the European Network Against Arms Trade, say this loophole shows how Europe’s defense policy lacks moral safeguards. “It’s a form of support, extremely dramatic and problematic,” said Laetitia Sedou of the network.
IAI did not respond to interview requests. Intracom Defense insists it complies fully with Greek and EU laws, claiming its participation in EDF projects is legal. But financial records show that while based in Greece, 94.5% of its shares and all voting rights belong to IAI.
Despite calls from some EU nations—like France, Sweden, and Belgium—to reassess EU-Israel relations, defense collaborations through EDF continue. Norway, also a project co-funder, stated it expects no involvement in international law violations but deferred responsibility for EDF oversight to the European Commission.
While there is no proof that EDF-funded drone technology is being used in Gaza, there is little oversight to prevent it either. EU regulations require ethical assessments and compliance with human rights laws, but they rely on self-reporting and anonymous panels of experts.
“The EDF regulation is extremely weak on ethics and transparency,” Botenga said. “Self-certification in this sector is obviously insufficient at best, a joke at worst.”
This revelation highlights a fundamental tension: the EU’s desire to scale up defense capabilities while maintaining ethical standards amid geopolitical conflicts. As long as loopholes like Article 9 remain, questions about EU complicity in global military operations will persist.
