Conclusions – 19 October 2017 III. SECURITY AND DEFENCE 13. The European Council recalls its June 2017 conclusions. It welcomes the significant progress made by Member States in preparing a Permanent Structured Cooperation (PESCO) notification with a common list of commitments, and on PESCO governance. It encourages those Member States in a position to do so to swiftly notify the Council and the High Representative of their intentions to participate in PESCO. This would allow for the launching of PESCO before the end of the year, with a view to swiftly implementing the commitments, including the launching of first projects. The European Council welcomes the work done so far by the co-legislators on the Commission’s proposal for a European Defence Industrial Development Programme (EDIDP). It calls for an agreement within the Council by the end of the year, with a view to concluding negotiations with the European Parliament as soon as possible so as to have the first capability projects identified by the Member States financed in 2019. 14. The European Council encourages Member States to develop flexible and sound financing mechanisms within the European Defence Fund, to allow for joint procurement of capabilities and/or their joint maintenance and as a way of improving access to cutting-edge capabilities. The objective is to deliver capabilities, ensure a competitive, innovative and balanced basis for Europe’s defence industry across the EU, including by cross border cooperation and participation of SMEs, and to contribute to greater European defence cooperation, by exploiting synergies and mobilising EU support in addition to Member States’ financing. European defence industrial development will also require EU support for SME and intermediate (mid-cap) investments in the area of security and defence. It encourages the EIB to examine further steps with a view to supporting investments in defence research and development activities. It welcomes the launch of the trial run of the Coordinated Annual Review on Defence (CARD) which should contribute to spur enhanced defence cooperation among Member States. EUCO 14/17 9 EN