European Union Member States officially approved a new programme offering up to €150 billion in favourable loans for joint defence investments on Tuesday.
The programme, named SAFE, aims to provide financing to Member States wishing to invest collaboratively in the defence sector, addressing vulnerabilities in European defence.
Eligible investments include areas like ammunition, missiles, artillery, drones, air defence systems, critical infrastructure protection, military mobility, and cyber defence.
To enhance the interoperability of national armies within Europe, SAFE mandates joint procurement procedures involving at least two participating countries.
Due to the urgent need for substantial defence investments, single member state purchases will also temporarily qualify for favourable loans.
The initiative seeks to bolster the European defence industry by capping costs for components sourced from third countries, such as the United States, at 35% of the final product’s cost.
SAFE is accessible to third countries with defence agreements with the EU, allowing them to participate in tenders. This includes the United Kingdom and Ukraine, with the possibility of procuring from the Ukrainian defence industry.
Introduced by the European Commission in late March, SAFE is part of a broader strategy to reinforce European defence.
Interested Member States can submit initial national plans within six months for Commission evaluation, which hopes to offer preliminary funding—up to 15% of the loan—this year.
The regulation received near unanimous approval, with only Hungary abstaining.
